The Supply of Medical Isotopes
An Economic Diagnosis and Possible Solutions
This report explores the main reasons behind the unreliable supply of Technetium-99m (Tc-99m) in health-care systems and policy options to address the issue. Tc-99m is used in 85% of nuclear medicine diagnostic scans performed worldwide – around 30 million patient examinations every year. These scans allow diagnoses of diseases in many parts of the human body, including the skeleton, heart and circulatory system, and the brain. Medical isotopes are subject to radioactive decay and have to be delivered just-in-time through a complex supply chain. However, ageing production facilities and a lack of investment have made the supply of Tc-99m unreliable. This report analyses the use and substitutability of Tc-99m in health care, health-care provider payment mechanisms for scans, and the structure of the supply chain. It concludes that the main reasons for unreliable supply are that production is not economically viable and that the structure of the supply chain prevents producers from charging prices that reflect the full costs of production and supply.
The Tc-99m supply chain is technically complex and characterised by market imperfections
Supply of Technetium‑99m (Tc‑99m) is a just-in-time activity requiring continuous production in a complicated and aging supply chain that combines a mix of governmental and commercial entities. Governments control the availability of enriched uranium required for medical isotope production and also largely control the regulatory framework and the legislation around health care provider payment for nuclear medicine diagnostic scans. The central steps of the supply chain, including processing and generator manufacturing are mainly commercial. Processors and generator manufacturers wield market power and market concentration has increased in these parts of the supply chain, while supply continues to be supported by some government funding of nuclear research reactors that perform irradiation and of some processors. The resulting inability by reactors to increase prices sufficiently for full cost recovery and insufficient outage reserve capacity at various steps of the supply chain leave security of supply vulnerable and the market economically unsustainable.
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