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The global nuclear medicine market is expected to grow at a CAGR of 5.9% during the forecast period, to reach USD 5.26 billion by 2023 from USD 3.95 billion in 2018. The key factors propelling the growth of this market are the increasing incidence and prevalence of cancer and cardiovascular diseases and initiatives to lessen the demand-supply gap of Mo-99. However, the short half-life of radiopharmaceuticals reduces their potential adoption, while hospital budget cuts and high equipment prices have made it difficult for a section of end users to depend on nuclear medicine. These factors are expected to hamper the growth of the nuclear medicine market during the forecast period.
Opportunities
Use of radiopharmaceuticals in neurological applications
Nuclear medicine is majorly used for diagnosing CVDs and cancers. The saturation of these markets has led a number of companies and stakeholders to focus on expanding the overall applications of radiopharmaceuticals.
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Organizations such as Avid Radiopharmaceuticals, Philogen S.p.A., and Siemens Molecular Imaging, Inc. are making significant investments for the approval of florbetapir F18 and F18-FDG for diagnosing AD; the I-131 monoclonal antibody for diagnosing brain and central nervous system tumors; and F-18 fluorothymidine for diagnosing brain tumors. With the expanding application areas of radiopharmaceuticals, their demand and uptake are expected to increase in the coming years. This also indicates an opportunity for players to expand their offerings and market shares by catering to the demand for radiopharmaceuticals in neurological applications in the coming years.
Challenges
Hospital budget cuts and high equipment prices
In the US, after the enactment of ObamaCare in March 2010, due to the Affordable Care Act (ACA), many hospitals decreased their budgets. For instance, the Florida government’s budget cuts for South Florida hospitals came to USD 160 million in 2017. Moreover, 44 urban hospitals in Denver are expected to face budget cuts ranging between USD 0.1 million to USD 20 million.
Similarly, hospital budgets in some European countries were reduced in the last couple of years, with further reductions expected in the coming years. In 2015, the French government also released guidance for hospitals in a bid to reduce overall spending by USD 3.2 billion (EUR 3 billion) over the next two years (2017) and equipment purchase, while encouraging equipment sharing between facilities.
Healthcare facilities that purchase expensive multimodal nuclear medicine equipment and radiotracers often depend on third-party payers (such as Medicare, Medicaid, or private health insurance plans) to avail reimbursement for costs incurred in the diagnostic, screening, and therapeutic procedures performed with these devices. However, continuous cuts in the reimbursement for nuclear imaging scans and increasing cost of radiotracers due to their limited availability are preventing imaging centers from investing in nuclear imaging modalities.
Moreover, owing to the high cost of nuclear medicine equipment, most hospitals in developing countries find this highly-sophisticated technology unaffordable. The average price of a PET system is around USD 1.5 million to USD 2.0 million. Due to the high cost of these systems and financial limitations, healthcare facilities such as small hospitals and diagnostic centers are reluctant to invest in nuclear medicine equipment.
Owing to budget and reimbursement cuts, most hospitals will not be able to afford the already-expensive imaging devices and may focus on lower-priced alternatives, such as refurbished devices or upgrades of existing devices. Therefore, budget constraints are expected to form the biggest challenge for this market.
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