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The primary rabies vaccination course comprises three rabies vaccines given over 3-4 weeks, on days 0, 7 and 21-28.This provides cover for a number of years but a booster should be given if travelling to a high risk area in the future (usually 5 years).The rabies vaccines used are NON-LIVE and therefore do not usually lead to flu-like or febrile illness.A pre-exposure course of rabies vaccinations means that if you are unlucky enough to be bitten or scratched by a suspected rabid animal, you will not need human rabies immunoglobulin (the antidote, known as HRIG).Rabies vaccine (Intradermal) costs just £30 per dose at TravelDoc™.The full course consists of three doses over 3-4 weeks.A booster is required after 5 years.The vaccine is not live and therefore does not make you unwell. It is very well tolerated.The vaccine does not go into the stomach (it goes into the arm like all other travel vaccines).


Know more: https://www.travel-doc.com/service/rabies/

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Dermaplaning is a physical exfoliation procedure in which the dead skin and vellus hair is removed. The treatment is carried out by using a small, sterile blade while holding the skin taut, swiping the blade in gentle upward motions.

Know more: https://www.regentstreetclinic.co.uk/dermaplaning/

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  • Over the past decade MedTech valuations  have outperformed the market without changing its business model
  • The healthcare ecosystem is rapidly changing and MedTech is facing significant headwinds which require change
  • MedTech’s future growth and value will be derived from data and smart analytics rather than manufacturing
  • MedTech leaders will be required to leverage both physical and digital assets

 

Increasing MedTech’s future growth and value
 
 
Over the past decade, the medical device (MedTech) industry has enjoyed relatively high valuations and outperformed broader market indices without changing its manufacturing business model. Some MedTech leaders suggest that because the industry’s product offerings are essential, demand for them is increasing as populations grow and age, so unlike other industries, MedTech is immune to market swings and its asset value will continue to increase. As a consequence of this mindset, MedTech has been reluctant to change and slow to develop digitization strategies. Notwithstanding, digitization is an in-coming tide and positioned to impose a step-change on the industry. Future MedTech leaders will need to derive increased growth and value from digitization and emerging markets while improving the efficiency of their legacy manufacturing business and meeting quarterly earnings’ targets.

According to a 2018 report by the consulting firm Ernst & Young,Stagnant R&D investment, low revenue growth and slow adoption of digital and data technologies suggest that entrenched MedTech companies are overly focused on short-term growth, even as the threat of large tech conglomerates entering the space grows larger, which, in addition to the changing global healthcare ecosystem, threatens future revenue growth".

 
In this Commentary
 
This Commentary suggests that to create future growth and value, MedTech will have to (i) leverage data generated by medical devices, patients, payers and healthcare providers to develop clinical insights and trend analysis, which are expected to significantly improve patient outcomes and reduce costs, and (ii) substantially increase its share of the large and rapidly growing emerging markets. We suggest that there is a significant relationship between MedTech’s digital capacity and competences and its ability to increase its share of emerging Asian markets. But first we briefly describe the MedTech industry and its traditional markets and draw attention to some concerns, which include the relative low rates of top-line growth, stagnant R&D and share buybacks, M&A slowdown, giant tech companies entering the healthcare market, and challenges to recruit and retain millennials with natural digital skills and abilities.
 

The medical device industry
 
The MedTech industry designs, manufactures and markets more than 0.5m different products to diagnose, monitor and treat patients. These include wearable devices such as insulin pumps and blood glucose monitors, implanted devices such as pacemakers and metal plates, and stationary devices that range from instruments to sophisticated scanning machines. Medical devices can be instrumental in helping healthcare providers achieve enhanced patient outcomes, reduced healthcare costs, improved efficiency and new ways of engaging and empowering patients. The principal business model employed by the industry is to manufacture innovative products relatively cheaply and sell them expensively in wealthy developed regions of the world; predominantly North America, Europe and Japan; which although representing only 13% of the world’s population account for 86% of the global MedTech market share. This premium pricing model is predicated upon doctors’ and health providers’ belief that MedTech products are of superior quality and safety. Notwithstanding, as eye-watering healthcare costs escalate, providers and regulators demand better evidence of clinical and economic value to justify the pricing and use of MedTech products.  Over the next five years, the global MedTech industry is expected to grow at a compound annual growth rate of between 4% and 5.6% and reach global sales of some US$595bn by 2024.
 
Concern # 1: Reduced growth rates
 
Since the worse post-war recession ended in 2009, MedTech asset valuations have outperformed the market. Notwithstanding, of increasing concern is the slowdown of the industry’s revenue growth rates to single digits. The industry's aggregate revenue grew to US$379bn in 2017, an annual average industry growth rate of 4%, which now appears to be the new normal, and is significantly lower than the average annual growth rate of 15%, which the industry enjoyed between 2000-2007. The reduction in top-line growth rates is largely attributed to the world’s growing and aging population and the consequent growth in the incidence rates of chronic conditions, which increases the burden on overstretched healthcare budgets and intensifies pressure on MedTech’s to reduce their prices.
 
Population growth and aging
 
The aging population is driven by improvements in life expectancy. People are living longer and reaching older ages as fertility decreases and quality healthcare increases. People are having fewer children later in life. Some 8.5% of the global population (617m) have ages 65 and over. This is projected to rise to nearly 17% by 2050 (1.6bn). The number of Americans aged 65 and older is projected to more than double from 46m today to over 98m by 2060 – from 15% to 24% of the total US population. Around 18% of the UK population were aged 65 years or over in 2017, compared with 16% in 2007. This is projected to grow to 21% by 2027.
 
 Concern # 2: Stagnate R&D spend and share buybacks
 
In addition to relatively low revenue growth rates, MedTech R&D spend has stagnated over the past decade despite the need for companies to develop new and innovative product offerings, which drive top-line sales. Over the same period, MedTech returned more cash to shareholders in the form of share buybacks and dividends (US$16.4bn) than it spent on R&D.

To the extent that share buybacks extract, rather than create value why are they popular? One suggestion is that because share incentive plans represent a significant portion of executive compensation, share buybacks make it easier for executives to meet earning-per-share (eps) targets by reducing the number of shares, in the 1970s, share buybacks were effectively banned in the US amid concerns that executives might use them to manipulate share prices. However, in 1982 the US Securities and Exchange Commission (SEC) lightened its definition of stock manipulation, and share buybacks became popular again.
 

 

Concern # 3: High asset values slow M&A activity

Over the past decade, as markets became more uncertain, monetary policy tightened, technologies advanced and global economic growth slowed MedTech’s, buoyed by the dramatic fall in the cost of capital, increased their mergers and acquisitions (M&A) activity. This optimised portfolios, increased scale, reduced competition and improved profits. Notwithstanding, MedTech’s current high asset valuations make M&A transactions challenging to underwrite, and so, M&A activity has slowed.
 

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Is the digital transformation of MedTech companies a choice or a necessity?
 
Concern # 4: Giant techs entering market
 
Giant technology companies such as Apple, Amazon, Google and Microsoft, have entered the healthcare market by providing direct-to-customer innovative services, which leverage data, artificial intelligence (AI) and machine learning and define new points of value along the value chain, which is changing the traditional notion of “product vendor. Such innovations and services result in raising the expectations of stakeholders who are beginning to insist that healthcare is as convenient and personalized as every other good or service they purchase. Notwithstanding, leveraging data generated by devices, patients, healthcare providers  and payers is challenging for traditional MedTech’s who tend to view IT as an isolated cost centre often constrained by legacy systems, aging infrastructures, complexity and skills’ shortages rather than as a key strategic asset.
 
It seems reasonable to assume that over the next five years MedTech’s will be forced to rethink their role as product manufactures and forced to find new and innovative ways to deliver value in a rapidly evolving healthcare ecosystem. Failure of MedTech’s to accelerate their digital agendas will benefit giant technology companies who have entered the market and well positioned to take advantage of the digital transformation of the 4th Industrial Revolution: characterized by the marriage of physical and digital technologies and an ability to change the nature of work to the extent where a significant proportion of future enterprise value will be predicated upon analytics, artificial intelligence and cognitive computing.

 
Concern # 5: The dearth of millennials
 
An obstacle for MedTech to develop digital strategies and keep up with the pace of innovation is its inability to recruit, develop and retain millennials. This is significant because millennials are “digital natives” and crucial to MedTech’s shift to increase their service offerings.  Millennials have been raised in a digital, media-saturated world and are well positioned to opine on and contribute to digital initiatives. Also, millennials have a natural ability to understand, adopt and implement new technologies, use digital platforms and analyse data, which enable them to make informed decisions.
 
Unlike most C-suite executives, millennials inhabit a world unconstrained by precedent, where processes are digitized, and tasks automated to create seamless offline-to-online experiences. It seems reasonable to assume that with a dearth of such capabilities MedTech will lag other industries in defining and developing positive online interactions. This is important because effective digital strategies involve significantly more than simply providing online customer services. They involve leveraging social media and evolving technologies to create memorable experiences from content to customer support.

Millennials have a distinct ethical orientation and “sense of purpose”, which makes them difficult for traditional MedTech’s to recruit and retain. According to a 2018 survey by Deloitte’s, millennials tend to be pessimistic about the prospects for political and social progress and have concerns about social equality, safety and environmental sustainability. While they believe that business should consider stakeholders’ interests as well as profits, millennials’ perception of employers tend to be that they prioritize the bottom line above workers, society and the environment. This leaves millennials with little sense of loyalty to traditional business enterprises and thereby difficult to recruit and retain. According to Larry Fink, CEO, Black Rock, “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers and the communities in which they operate”.

Given MedTech’s dearth of expertise in digital skills, it might be obliged to develop dedicated teams and processes to source and execute value-added partnerships in a similar way big pharma has.
 

Smartphone penetration driving digitization strategies
 
Digital healthcare strategies are driven by the increased penetration of smartphones and the plummeting costs of wireless communications. Smartphones are powerful multipurpose devices capable of performing a number of tasks beyond their primary purpose of communication. These range from using the mobile’s SMS function to send alerts and reminders, to leveraging inbuilt mobile sensors or apps to capture and interpret clinical data.  Over the past decade, smartphones have fuelled the rapid uptake of internet access and transformed life for developed market consumers in terms of convenience and simplicity. In the US and UK smartphone penetration is about 84% and 80% respectively with the older age groups (55+) recording the highest growth. Smartphones have served an even more pivotal role for emerging market consumers by placing the internet into the hands of millions of consumers. In 2018, 98% of the global population had access to a mobile network with 75% having access to the fast 4th generation networks. Smartphones, together with other wireless technologies, (mHealth), are increasingly used in healthcare by patients, healthcare providers and payers, to improve health outcomes, increase efficiencies and reduce large and escalating healthcare costs. It is anticipated that by 2020, global smartphone subscriptions will be about 6bn and growing rapidly especially in emerging economies such as China, India, Egypt, Turkey, and the United Arab Emirates. In the past three years health apps have doubled and have reached over 140,000. The global mHealth market is expected to grow at a CAGR of 45% over the next six years and reach US$236bn by 2026.
 
 Concern # 6: Healthcare in emerging economies is predicated upon digital strategies
 
The relative high levels of healthcare demand and spending are expected to increase in emerging markets as populations grow, household spending rises and smartphone penetration increases. This is important to MedTech because emerging economies represent about 85% of the world’s population, 90% of which is under 30, and this cohort is expected to grow at three times the rate of the similar cohort in developed economies. Further, over the past decade, the number of high-income households have risen globally by about 30% to nearly 570m, with over 50% of this growth coming from emerging economies in Asia. Asia is comprised of 48 countries and represents roughly 60% of the global population, and its stake in world markets has grown dramatically in the last half-century. Today, Asian countries rank as some of the world’s top producers, which has brought them significant wealth.
 
According to Euromonitor International more than 50% of the world’s (3.6bn) internet users reside in Asia. Between 2013 and 2018, Asia accounted for 60% of new users coming online and the region has become an economic powerhouse, populated by young, digitally savvy consumers.  China is the largest mobile market in the world with close to 1.2bn subscribers. Significantly, in 2018, China’s rate of growth in mobile internet penetration reached 58% and the number of smartphone connections surpassed 1bn. Similarly, in India, the number of smartphone users is expected to double to 859m by 2022 from 468m in 2017; growing at a compound annual growth rate (CAGR) of 12.9% and expected to reach 859m by 2022.
 
Digitized services are replacing traditional distributors in China
 
Western MedTech operations in China have tended to replicate the Western commercial model, which relies heavily on distributor networks. But this is changing.
 
China has a land mass similar to that of the US and a population 1.4bn organised by 34 provincial administrative units, which are comprised of 23 provinces, four municipalities, five autonomous regions and two special administrative regions. Healthcare in China consists of both public and private medical institutions and insurance programs. About 95% of the population has at least basic health insurance coverage and is served by over 31,000 hospitals, primary care is patchy and there is a shortage of doctors.  Because of China’s large number of dispersed healthcare providers, traditional distribution models employed by western MedTech companies tend to be inefficient and costly.
 
In recent years, MedTech’s operating in China, supported by Beijing policy makers, have been gaining back control over customers from distributors. The reason for this is because, in the vast bureaucratic Chinese healthcare system, distributors evolved far beyond their core capabilities and controlled most commercial activities. For instance, the value Chinese distributors capture, as opposed to manufacturers, is disproportionately high and has led to restrictive policies. This has caught the attention of  policy makers who are seeking to correct these practices by promoting direct to customer digitized healthcare services. Beijing is minded that effective healthcare services for the nation’s vast and dispersed population cannot be achieved with traditional healthcare delivery models and has to be predicated upon appropriate digitized direct-to-customer operations. Similarly, this is true of other large emerging economies, particularly India.
 
The future is Asia and digitization
 
The reason we suggest that digitization is likely to help MedTech’s increase their market share in China is because digitization has become an essential part of everyday life in China including mobile payments, online-to-offline services, the sharing economy, smart retail, digital ID cards and healthcare services. WeDoctor and WeChat, are at the centre of this digitized society and only show signs of increasing their influence over Chinese healthcare and lifestyle.

WeDoctor is just one example of several Chinese start-ups that has leveraged data and digital strategies to re-engineer the nation’s healthcare system. Founded in 2010, the company has grown into a US$6bn enterprise and not only has increased access to healthcare, improved diagnoses, enhanced patient outcomes and lowered costs, but has disintermediated traditional distributors by simplifying and centralizing the procurement processes of medical devices.
 
It is sometimes hard for people based outside of China to grasp just how fully digitized Chinese society has become. WeChat, known in China as Weixin, is a multi-purpose messaging, social media and mobile payment app first released in 2011. By 2018 it had become one of the world's largest standalone mobile super-apps and controls life in modern China. For most Chinese citizens, especially those living in cities, it is possible to get through an entire day using WeChat for your every need. Millions of businesses have chosen to create mini-apps within WeChat instead of developing their own standalone apps. These allow businesses to send promotional messages directly to their customers via WeChat, as well as tap into the WeChat’s broader user base. With 1bn active monthly users, WeChat has reached the ceiling of its growth within China and its future will be about developing more services, which includes connecting people to businesses and products offerings.
 
Takeaways
 
Over the past decade, while the MedTech industry has increased its asset value, leaders focussed on, (i) short-term growth, (ii) portfolio optimization and (iii) returning cash to shareholders. Also, they allowed R&D to stagnate and were slow to appreciate the strategic significance of digitization. Data and smart analytics are positioned to play an increasing role in future MedTech growth and value creation. They are the key to creating new and innovative service offerings for healthcare providers, patients and payers and critical to MedTech increasing its share in large fast-growing emerging markets. Future  MedTech leaders will be required to leverage both physical and digital assets. Significantly, they will need to enhance the efficiency of legacy manufacturing systems while developing and marketing new innovative offerings derived from data and smart analytics.
 
Postscriptum
 
A concern not mentioned in the above discussion is ‘recession, which although mooted since the sharp fall in markets in December 2018 has not materialized. Indeed, the S&P 500 continues to rally, rising from 2,351 in 24th December 2018, to 3,026 in 26th July 2019. However, a reason for bullish US stock markets is low interest rates: the lower the interest rate, the higher the multiple the market applies to earnings. One indicator of recession is the J.P. Morgan Global Manufacturing Purchasing Managers’ Index (PMI), which has been declining since January 2018. In May 2019, it fell below 50, which is the number that suggests a recession has started. Another indicator of a recession is the yield curve, which is a chart showing the interest rate paid on bonds of different maturity. As a forecasting tool, the difference between long- and short-term interest rates has proved to be a reliable indicator of future recessions. Currently, the difference between the yield on the US 10-year bond and the US 3-month T-Bill is negative. This means the yield curve is inverted, which indicates recession. However, the yield curve is only an indicator of a recession and is neither definitive nor causal.
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  • Experts have called for the worldwide eradication of cervical cancer, but this is not likely to happen for a long time
  • Significant progress has been made to eliminate cervical cancer in developed countries
  • The overwhelming burden of cervical cancer falls disproportionately on women in low- to middle-income countries (LMIC)
  • LMIC have relatively low levels of awareness of cervical cancer, patchy prevent programs and limited treatment options
  • Over 80% of cervical cancer cases and deaths occur in LMIC
  • Cervical cancer is the fourth most common cancer in women worldwide
  • In 2018 there were an estimated 680,000 new cases and 311,000 deaths from the disease worldwide
  • Cervical cancer is caused by sexually acquired infection from high-risk strains of the human papilloma virus (HPV)
  • The majority of women will be infected with HPV at some point in their life
  • HPV also causes genital warts and cancers of the head and neck and is also linked to cancers of the anus, vulva, vagina, penis and oropharynx
  • HPV vaccines protect against 70% of cervical cancers and about 90% of genital warts
  • Regular screening is also recommended to reduce the incidence of cervical cancer
 
Challenges to eradicate cervical cancer globally

Cervical cancer is a killer disease, which only affects women. It affects women of all ages from schoolgirls to grandmothers, but it is significantly more prevalent between the ages of 30 and 45.
 
The cervix, also known as the neck of the womb, connects a woman's womb and her vagina.
 
Lancet study raises hope of eradicating cervical cancer
 
Research findings published in the June 2019 edition of The Lancet suggest that HPV vaccination, which has been available to adolescent girls in wealthy developed countries since 2007, has led to a dramatic reduction in the number of HPV infections, precancerous cervical lesions and anogenital warts and provides hope of eradicating cervical cancer. Marc Brisson, Professor in the Department of Social and Preventative Medicine, Laval UniversityCanada, who led the research - a meta-analysis of over 65 former studies covering 60m people - said: "We will see reductions [in cervical cancer] in women aged 20-30 within the next 10 years, and eradication  of the disease [defined as <4 cases per 100,000] might be possible if sufficiently high vaccination coverage can be achieved and maintained". Over the past two decades, the incidence rates of cervical cancer in developed countries have fallen significantly, and between 1955 and 1992, the incidence rate of the disease decreased 70% in the US. These falls are attributed to effective nationwide screening.
 
Epidemiology

Cervical cancer is the fourth most common cancer in women worldwide and second for women between 15 and 44. In 2018 there were an estimated 680,000 new cases and 311,000 deaths from the disease worldwide. The overwhelming majority of cases are caused by two specific strains of the human papilloma virus (HPV). HPV infection and early cervical cancer typically do not present noticeable symptoms, and cervical cancer may take 20 years or longer to develop after an HPV infection. The overwhelming global burden of the disease falls disproportionately on women in low- to middle income countries (LMIC). There is a significant and growing gap in the incidence and mortality rates of cervical cancer between developed nations and LMIC. Despite international efforts, it seems unlikely that this gap will be narrowed in the medium term.
 
In this Commentary
 
This Commentary describes the spread of HPV, the vaccines developed to prevent infection from specific high-risk strains of the virus and recommended vaccination regimens. We describe the nature and significance of complementary screening programs and present evidence to suggest that women who fail to get screened are more likely to contract cervical cancer in later life than women who are screened. HPV vaccination programs are more prevalent in developed economies and are associated with a significant reduction in the incidence rates of cervical cancer. This suggests that the battle to eliminate cervical cancer is being won in some wealthy developed nations. Australia is positioned to become the first country in the world to eliminate cervical cancer. Despite substantial global efforts to reduce the incidence rates of cervical cancer, the gap in preventing, diagnosing and treating the disease between wealthy nations and LMIC is significant and growing. We conclude by suggesting that to eradicate cervical cancer, screening and prevention programs must be linked to easily accessible and effective treatment.
 
The spread of HPV
 
Over 70% of cervical cancer is caused by two high-risk strains of HPV. Most women will contract HPV at some stage during their life, but this usually clears-up on its own without the need for any treatment. HPV is most commonly spread during vaginal, anal or oral sex. The virus can be passed even when an infected person has no signs or symptoms. If you are sexually active you can get HPV, even if you only have sex with one partner. Notwithstanding, the risk increases with the number of new sexual partners and their sexual histories. You also can develop symptoms years after you have sex with someone who is infected. This makes it hard to know when you first became infected.
  
HPV vaccines
 
The US Food and Drug Administration (FDA) has approved three vaccines, which prevent infection with disease-causing HPV types. These are Gardasil, Gardasil 9 and Cervarix. All three vaccines prevent infection with HPV types 16 and 18 in women who have not already been infected by these types. These are two high-risk HPV’s that cause about 70% of cervical cancers and an even higher percentage of some of the other HPV-caused cancers. Gardasil also prevents infection with HPV types 6 and 11, which cause 90% of genital warts. Gardasil 9 prevents infection with the same four HPV types, plus five additional cancer-causing types.
 
About 79m Americans are currently infected with HPV, with roughly 14m people becoming newly infected in the US each year. In the UK, HPV is present in one in three people and 90% of individuals will come into contact with some form of the virus in their lifetime. About 80% of sexually active people are infected with HPV at some point in their lives, but most people never know they have the virus. Whitfield Growdon, a surgical oncologist at the Massachusetts General Hospital and professor at the Harvard University Medical School describes the HPV vaccination as, “one of the most meaningful interventions for reducing cervical cancer”; see video below.

 
 
Who should get vaccinated?

All girls and boys aged between 11 and 12 should get the HPV vaccination. Every year in the US, over 13,000 males contract cancers caused by HPV. Catch-up HPV vaccines are recommended for girls and women through the age of 26, and for boys and men through the age of 21, if they did not get vaccinated when they were younger. HPV vaccination is also recommended for the following people, if they did not get vaccinated when they were younger: (i) young men who have sex with men through the age of 26, (ii) young adults who are transgender through the age of 26 and (iii) young adults with certain immunocompromising conditions (including HIV) through the age of 26.
 
Early cervical cancer is asymptomatic
 
Because early cervical cancer is asymptomatic, it is important for women to have regular Papanicolaou (Pap) smears - also called Pap tests - to detect any precancerous changes in the cervix that might lead to cancer. This is in addition to the HPV vaccination. In England women are invited to have Pap smears every three years between the ages of 25 and 49, when rates of cervical cancer are at their peak, and every five years between 50 and 65. Other international screening guidelines recommend that women aged 21 to 29 have a Pap smear every three years. Women aged 30 to 65 are advised to continue having a Pap test every three years, or every five years if they also combine it with an HPV DNA test. Women over 65 can stop testing if they have had three consecutive normal Pap tests, or two HPV DNA and Pap tests with no abnormal results.
 
The HPV DNA test determines the most likely cause of cervical cancer by looking for pieces of DNA in cervical cells and is recommended for women over 30 and not for women under 30. This is because women in their 20s tend to be more sexually active and therefore are more likely (than older women) to have an HPV infection that will go away on its own. Results of an HPV DNA test carried out on a woman in her 20s is not as significant as in and older woman and also may be confusing. The HPV DNA test can also be used in women who have slightly abnormal Pap test results to find out if they might need more testing or treatment.
 

The Pap smear/test
 
The Pap smear or Pap test is a method of cervical screening used to detect potentially precancerous and cancerous processes in your cervix. During the routine procedure, cells from your cervix are gently scraped away and then examined for abnormal growth. Abnormal findings are often followed-up by more sensitive diagnostic procedures and if warranted, by interventions that aim to prevent progression to cervical cancer. Detecting cervical cancer early with a Pap smear significantly increases the chances of a cure. A Pap smear can also detect changes in your cervical cells, which suggest you might develop cancer in the future. In the two videos below Growdon describes the Pap smear and other tests for diagnosing cervical cancer.
 

What is a Pap smear test?
 
 
Diagnostic tests for cervical cancer
 
 Women failing to have the Pap test are 6-times at greater risk of cervical cancer
 
There is evidence to suggest that women over 50 who fail to have a regular Pap smear have a much higher risk of developing cervical cancer compared with other women the same age who have a history of regular screening. Research carried out by Cancer Research UK and reported in 2014 investigated the utility of regular cervical cancer screening after 50, and whether 64 was an appropriate age to stop screening and concluded “yes” and “yes”. The study compared the screening history of 1,341 women between 65 and 83 in England and Wales who were diagnosed with cervical cancer over a five-year period, with 2,646 women of the same age without the disease. Findings suggest that women who did not attend screening tests were six times more likely to develop cervical cancer between 65 and 83 compared with women that did. 
 
Australian the first country to eradicate cervical cancer
 
Australia is well positioned to become the first country in the world to eradicate cervical cancer. This is largely due to national vaccination and screening programs, which could see the disease effectively eliminated as a public health issue within the next two decades. In 2007, Australia launched a national publicly-funded school immunisation program to reduce HPV, which complemented a national  cervical cancer screening program that was launched in the 1990s. These have been shown to reduce the incidence of cervical cancer and significantly increase early diagnosis when the disease is curable.
 
A research paper about the Australian initiative published in the January 2019 edition of The Lancet Public Health concludes that, “the annual incidence of cervical cancer in Australia is likely to decrease to fewer than six new cases per 100 000 women by 2020 (range 2018–22) and to fewer than four cases per 100 000 women by 2028 (2021–35). The annual incidence of cervical cancer could decrease to one new case per 100 000 by 2066 (2054–77) if the existing HPV-based screening program continues in cohorts who are offered the nonavalent vaccine”; [a nonavalent vaccine works by stimulating an immune response against nine different antigens, such as nine different viruses or other microorganisms]. According to Suzanne Garland, Professor and Clinical Director of Microbiology and Infectious Diseases at the Royal Women’s Hospital, Melbourne, Australia, who led the research, “within 40 years the number of new cases of cervical cancer [in Australia] is projected to drop to just a few”.
 
The two worlds of cervical cancer
 
Global efforts to reduce the incidence rates of cervical cancer have focused on HPV vaccination  and the Pap test. Although experts are optimistic about eliminating cervical cancer in developed nations, which have advanced healthcare systems and extensive HPV vaccination, screening and treatment programs, they are significantly less sanguine about eradicating the disease in LMIC where there are relatively low levels of awareness of cervical cancer, a dearth of  preventative strategies, limited expertise and a narrow band of treatment options. This results in the disease being identified late when it is at an advanced stage, which leads to higher rates of morbidity and death. Indeed, 85% of all cases and cervical cancer deaths occur in LMIC, where the death rate is 18 times higher than in wealthy nations.
 
Cervical cancer a challenge for LMIC
 
The gap in preventing, diagnosing and treating cervical cancer between wealthy nations and LMIC is  described in a paper published in the November 2017 edition of Gynecologic Oncology Reports and suggests that, “Developing countries continue to bear a disproportionate percentage of the global cervical cancer burden. Investigations into the growing gap in incidence and mortality between developed nations and LMIC have cited persistent financial, infrastructural and educational limitations as key drivers. Pervasive lack of access to both preventative and definitive care has left a substantial portion of cervical cancer patients with minimal options for disease management”.
 
WHO strategy to eliminate cervical cancer
 
Recognising this disparity, in 2018, the Director-General of the World Health Organization (WHO) announced a call to action for the eradication of cervical cancer as a public health problem. In January 2019, the Executive Board of the WHO requested the Director General to develop a draft strategy to accelerate cervical cancer elimination, with clear targets for the period 2020 - 2030.
 
Vaccination and screening must be linked to effective therapies
 
The expansion of screening programs for cervical cancer in LMIC is only part of the answer to closing the gap with developed nations and eradicating cervical cancer globally. It is imperative that screening is linked to increased access to effective treatment for women with cervical cancer, particularly in its early stages when it is still curable.  In LMIC there is often not only reduced access to preventive HPV vaccines and screening, but limited access to treatment and trained personnel. Notwithstanding, there is evidence to suggest that, in LMIC less-invasive and less–resource-intensive treatment options can be effective and are increasingly being made available.
 
Late presentation of cervical cancer in LMIC
 
Women from LMIC generally seek treatment for cervical cancer only after the presentation of symptoms when the disease is advanced and challenging to treat. Also, they often lack awareness of the disease and ways to prevent it. Further, in some regions of the world, cultural norms and myths about cervical cancer pose additional barriers to prevention. Despite such obstacles, the disease can be prevented at low cost by healthcare providers employing relatively simple techniques to screen women for precancerous conditions and treat abnormal tissue early. Among the most promising low cost and low-tech screening alternatives to the Pap smear, is visual screening, which only requires either simple vinegar or iodine solutions and the eye of a trained healthcare provider to spot abnormal tissue.
 
Screening linked to effective therapy
 
Increasingly, these simply tests are being linked with effective treatment. Increasingly, in LMIC relatively cheap and simple therapies are being used to either destroy or remove abnormal cervical tissue, depending on the severity, location and size of the affected area. Two such procedures include cryotherapy and loop electrosurgical excision procedure (LEEP). The former uses extremely low temperatures to destroy abnormal tissue and requires no electricity. The latter involves using a thin wire to remove lesions in the affected area. While this procedure requires more medical equipment than cryotherapy, it allows tissue to be removed for analysis, reducing the possibility that advanced cancer will go unnoticed. Although many LMIC have had cervical cancer prevention programs and simple treatment strategies in place for some time, some have failed to reduce death rates of the disease.
 
Radiotherapy and cervical cancer in LMIC
 
Research findings published in the May 2019 online edition of The Lancet Oncology suggest that the availability of radiotherapy in LMIC (where gross national income is <US$12,000 a year) would generate millions of productive life years and billions of dollars in economic benefits for the patients' families and communities. The study suggests that implementing a 20-year strategy for radiotherapy to treat cervical cancer in LMIC between 2015 and 2035, in parallel with an HPV vaccination program, would save the lives of some 9.4m women and provide a net benefit to economies of US$151.5bn as a direct result of women living longer and more productive lives.

According to Danielle Rodin, lead author and Radiation Oncologist at the Princess Margaret Cancer Centre, University of Toronto, Canada, "Vaccination is hugely important, but we can't neglect the millions of women who are contracting cervical cancer and dying in pain without access to treatment. These are women who have curable cancers: even advanced cervical cancer can be cured with radiotherapy. The possibility exists to make this treatment universally available". Radiation therapy makes small breaks in the DNA inside cells. This stops cancer cells from growing and dividing and causes them to die. Unlike cisplatin therapy, [an anti-cancer ("antineoplastic" or "cytotoxic") chemotherapy], which usually exposes the whole body to cancer-fighting drugs, radiation therapy is usually a local treatment.

 
According to the 2019 Lancet Oncology study, HPV vaccination would result in a 3.9% reduction in cervical cancer incidence over the 20-year study period; assuming a best-case scenario of vaccinating every 12-year-old girl in the world starting in 2014. By 2072, when the first vaccinated cohort reaches 70, there would be a 22.9% reduction in incidence, still leaving 41.6m in need for therapy over that time period.

We know that when administered together (chemoradiation) you can give lower doses of both and get a better kill-rate on the tumour. This is now the backbone of cervical cancer therapy”, says Growdon; see video below.

 
 
Abu Dhabi’s endeavours to reduce cervical cancer
 
For some years, experts have discussed religious and cultural barriers to cervical cancer screening and drew attention to the relatively low levels of cervical cancer awareness and screening for women in Middle Eastern Arab countries. Meta-analysis of cervical cancer studies conducted in Arab countries between January 2002 and January 2017 and published in the December 2017 edition of Nursing & Health Sciences, suggest that in Arab speaking countries there tends to be, “low knowledge of and perceptions about cervical screening among Arab women, the majority of whom are Muslim. Factors affecting the uptake of cervical cancer screening practices were the absence of organized, systematic programs, low screening knowledge among women, healthcare professionals' attitudes toward screening, pain and embarrassment, stigma, and sociocultural beliefs”.
 
The success of HPV vaccination in Abu Dhabi and the UAE
 
Notwithstanding, there are signs that this is changing. Leading such changes is Abu Dhabi of the United Arab Emirates (UAE). Over a decade ago, a mandatory free HPV vaccination program for school girls was introduced by Abu Dhabi’s Ministry of Health and Prevention and extended in 2013 to include women between 18 and 26. Also, the Ministry recommends that woman aged 25 to 65 years get a Pap smear every three to five years. Since 2018, HPV vaccinations have been provided free and compulsory for all school girls in Dubai and the Northern Emirates following a campaign to raise awareness.
 
Although the UAE is among the few countries to have relatively low incidence rates of cervical cancer, the disease still ranks as the third most frequent cancer among women in the UAE and the third most frequent cancer among women between 15 and 44. Estimates suggest that every year, 93 women are diagnosed with cervical cancer and 28 die from the disease in the UAE. Although Abu Dhabi is successfully leading the fight against cervical cancer and provides a roadmap for others to follow, the incidence of cervical cancer in the Middle East generally is expected to more than double by 2035 (>33,000 cases) and be responsible for more than 18,000 deaths. In some countries including Morocco and Saudi Arabia, low societal awareness and relatively low levels of screening results in about one in four women with HPV.
 
 Takeaways
 
As cervical cancer screening and prevention programs have been growing and extending their reach, so increases the need to provide access to effective treatment. Despite growing awareness of the disease and global efforts to increase availability of appropriate resources, cervical cancer remains prevalent particularly in LMIC where effective treatment has not become widespread. In many LMIC, the default option is often to do nothing, which results in certain death. Researchers and policy makers should consider focusing their activities on how to best to reconcile the use of existing resources with the expected impact on the quantity and quality of life. Although gaps in oncological resources and barriers to treatment still exist, the good news is that there is increased political will and international attention to improve access to safe and effective treatment of cervical cancer. Notwithstanding, eradicating the disease globally appears to be more of a theoretical possibility than a medium term reality.
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  • AstraZeneca has turned traditional biopharma R&D on its head and is targeting early stage cancer
  • This strategy benefits from  some of AstraZeneca’s R&D endeavours
  • But the strategy faces strong headwinds, which include significant technological and market challenges and substantial Competition from at least two unicorns
  
AstraZeneca’s strategy to target early cancer

 
Will José Baselga’s gamble pay off?
 
Baselga is AstraZeneca's new cancer research chief who has turned traditional biopharmaceutical drug development on its head by announcing AstraZeneca’s intention to target early- rather than late-stage cancer. “We need to spend our resources on those places where we can cure more people and that’s in early disease”, says Baselga, who knows that early detection can significantly improve patient survival rates and quality of life, as well as substantially reducing the cost and complexity of cancer treatment. Baselga also must know his strategy is high risk. Will it work?
 
In this Commentary
 
In this Commentary we discuss the drivers and headwinds of AstraZeneca’s strategy to increase its R&D focus on early stage cancer. But first we briefly describe cancer, the UK’s situation with regard to the disease and explain why big pharma targets advanced cancers. Also, we provide a brief description of AstraZeneca’s recent history.  
 
What is cancer?

Cancer occurs when a normal cell’s DNA changes and multiplies to form a mass of abnormal cells, which we refer to as a tumour. If not controlled and managed appropriately the tumour can spread and invade other tissues and organs. In the video below Whitfield Growdon, a surgical oncologist at the Massachusetts General Hospital in Boston US, and a Professor at the Harvard University Medical School explains.
 
 
The UK’s record of cancer treatment
 
In the UK cancer survival rates vary between types of the disease, ranging from 98% for testicular cancer to just 1% for pancreatic cancer. Although the UK’s cancer survival rates lag those of other European countries, the nation’s overall cancer survival rate is improving. Several cancers are showing significant increases in five-year survival, including breast (80% to 86%), prostate (82% to 89%), rectum (55% to 63%) and colon (52% to 60%). Many of the most commonly diagnosed cancers in the UK have ten-year survival of 50% or more. With regard to cancer spending, compared with most Western European countries, including France, Denmark, Austria and Ireland, the UK spends less on cancer per person, with Germany spending almost twice as much per head.
 
Why big pharma targets advanced cancers?
 
Most cancers are detected late when symptoms have manifested themselves, which renders treatment less effective and more costly. When cancer is caught early, as in some cases of breast and prostate cancer, tumours tend to be removed surgically or killed by chemoradiation therapy (CRT) and this, for many people, provides a “cure”, although in some cases the cancer returns.
 
Studies in developed economies suggest that treatment costs for early-diagnosed cancer patients are two to four times less expensive than treating those diagnosed with advanced-stage cancer. Notwithstanding, there are physical, psychological, socio-economic and technical challenges to accessing early cancer diagnosis and these conspire to delay cancer detection. Thus, big pharma companies have traditionally aimed their new cancer drugs at patients with advanced forms of the disease. This provides pharma companies access to patients who are willing to try unproven therapies, which significantly helps in their clinical studies. And further, big pharma is advantaged because regulators tend to support medicines that slow tumour growth and prolong life, albeit by a few months.
 
Imfinzi: the only immunotherapy to demonstrate survival at three years
 
A good example of this is AstraZeneca’s immunotherapy drug called Imfinzi (durvalumab) used in unresectable stage-III non-small cell lung cancer (NSCLC), which has not spread outside the chest and has responded to initial chemoradiation therapy. Imfinzi works by binding to and blocking a protein called PD-L1, which acts to disguise cancer cells from your immune system. Imfinzi removes the disguise so that your immune system is better able to find and attack your cancer cells.
 
Findings presented at the June 2019 meeting of the American Society of Clinical Oncology (ASCO), build on a clinical study of Imfinzi reported  in the September 2018 edition of The New England Journal of Medicineand suggest that Imfinzi is the only immunotherapy to demonstrate survival at three years in unresectable stage-III NSCLC. AstraZeneca has begun a phase-3 clinical study of the PD-L1 inhibitor protein in stage II NSCLC patients.
 

 

Some information about AstraZeneca
 
AstraZeneca is a British-Swedish multinational biopharmaceutical company with a market cap of US$107bn and annual revenues of US$22bn. The company operates in over 100 countries, employs more than 61,000, has its headquarters in Cambridge, UK, and is recovering after patents expired on some of its best-selling drugs and a failed takeover bid in 2014 by Pfizer.
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A paradigm shift in cancer diagnosis
Patents, legacy drugs and new biologics
 
When pharma companies develop a new drug, they can apply for a patent that stops other companies from making the same thing. A patent lasts for 20 years, after which point other producers can replicate the drug and its selling price plummets. This happened to AstraZeneca’s when the patents expired on two of its best-selling drugs: Crestor (rosuvastatin), and Nexium (esomeprazole). The former is a statin  that slows the production of cholesterol by your body, lowers cholesterol and fats in your blood and is used to reduce your chances of heart disease and strokes. The latter is a drug used to treat symptoms of gastroesophageal reflux disease (GERD) and other conditions involving excessive stomach acid. Unlike some of its rivals, these were oral medicines based on small molecules that are easy for generic manufacturers to copy, which made AstraZeneca vulnerable to cut-price competition immediately after the legal protection of the drugs had expired. Notwithstanding, AstraZeneca’s new generation of biologic medicines, which it launched in the first decade of this century, are protected to some degree by the fact that they are difficult to copy as they are manufactured using cells, instead of big chemistry sets used to make conventional drugs.
 
AstraZeneca’s history with early stage cancer therapies
 
Baselga’s gamble benefits from the fact that AstraZeneca developed an interest in the detection of early stage cancer before his appointment. Today, AstraZeneca is active in clinical studies with other biopharma companies and leading academic institutions targeting earlier-stage therapies.

Working with collaborators over the past two decades, AstraZeneca has tested a number of drugs including Iressa (Gefitinib) and Tagrisso (Osimertinib) in cancers from stage-I onward, in some cases to try to shrink tumours before they are removed surgically. Tagrisso is a potential star-drug for AstraZeneca. It  was originally developed to treat a group of lung cancer patients whose cancer had become resistant to established tyrosine kinase inhibitor therapies such as Iressa  and Roche’s Tarceva (erlotinib). Tagrisso surprised AstraZeneca as it turned out to be better than Iressa and Tarceva when used in untreated patients with epithelial growth factor receptor (EGFR) mutations. EGFR is a protein present on the surface of both normal cells and cancer cells, and are most common in people with lung adenocarcinoma (a form of NSCLC), more common with lung-cancer in  non-smokers, and are more common in women.

 
Epithelial growth factor receptor (EGFR)
 
Think of EGFR as a light switch. When growth factors (in this case tyrosine kinases) attach to EGFR on the outside of the cell, it results in a signal being sent to the nucleus of the cell telling it to grow and divide. In some cancer cells, this protein is overexpressed. The result is analogous to a light switch being left in the "on" position, telling a cell to continue to grow and divide even when it should otherwise stop. In this way, an EGFR mutation is sometimes referred to as an "activating mutation". Tagrisso "targets" this protein and blocks the signals that travel to the inside of the cell and growth of the cell stops. In 2003, when AstraZeneca received regulatory approval of Iressa we had little understanding about EGFR. Today however about 50% of drugs approved for the treatment of lung cancer address this particular molecular profile.

Technological challenges
 
Baselga’s gamble is assisted by advances in  liquid biopsies, which work by detecting fragments of malignant tumour DNA in the bloodstream to identify oncogenic drivers, which help treatment selection. The challenge of this approach is that tumours shed meniscal amounts of circulating tumour DNA (ctDNA), which significantly raises the difficulty of detecting the genetic signals that oncologists need to identify specific cancers and select treatments. ctDNA should not be confused with circulating free DNA (cfDNA), which is a broader term that describes DNA that is freely circulating in the bloodstream but is not necessarily of tumour origin.
 
The good news for Baselga is that in recent years looking for ctDNA has become a viable proposition because of improvements in DNA sequencing technologies, (see below) which make it possible to scan fragments and find those few with alterations that may indicate cancer. While other blood-based biomarkers are being investigated, the advantage of ctDNA is that it has a direct link to a tumour and can be very specific at identifying cancer.  ctDNA also provides a means to profile and monitor advanced stage cancers to inform treatments.
 
Notwithstanding, a paper published in the June 2018 edition of the Journal of Clinical Oncology  suggests that, “there is insufficient evidence of clinical validity and utility for the majority of ctDNA assays in advanced cancer”, and therefore it is still early to adopt cfDNA analysis for routine clinical use.
 

Next generation genome sequencing
 
DNA sequencing is the process of determining the sequence of nucleotides in a section of DNA. The first commercialised method was “Sanger Sequencing”, which was developed in 1977 by Frederick Sanger, a British biochemist and double Nobel Laureate for Chemistry. Sanger sequencing was first commercialized by Applied Biosystems, and became the most widely used sequencing method for approximately 40 years. More recently, higher volume Sanger sequencing has been replaced by next-generation sequencing (NGS) methods, which cater for large-scale, automated genome analyses. NGS, also known as high-throughput sequencing, is a general term used to describe a number of different state-of-the-art sequencing technologies such as Illumina’s Solexa sequencing. These allow for sequencing of DNA and RNA significantly more quickly and cheaply than the previously used Sanger sequencing and has revolutionised the study of genomics and molecular biology.
 
Can AstraZeneca acquire success?
 
Baselgo’s gamble is not helped by the relative dearth of biotech companies engaged in clinical studies of early stage cancers. This significantly narrows AstraZeneca’s options if it wants to buy-in clinical-phase assets to fit with Baselga’s strategy.
 
Notwithstanding, there are at least two biotech companies of potential interest to AstraZeneca. One is Klus Pharma, founded in 2014, based in Monmouth Junction, New Jersey, US, and acquired for US$13m in October 2016 by the Sichuan Kelun Parmaceutical Co., a Chinese group based in Chengdu. Another is Dendreon, a biotech company based in Seal Beach, California, US. In 2014 Dendreon filed for chapter 11 bankruptcy. In 2015 its assets were acquired by Valeant Pharmaceuticals. In 2017, the Sanpower Group, a Chinese conglomerate, acquired Dendreon from Valeant for US$820m.  
 
Klus is recruiting patients with stage-I rectal cancer for a phase 1/2 clinical study of its anti-HER2 antibody drug, and is also working to extend its flagship product, Provenge (sipuleucel-T) as an option for patients with low-risk prostate cancer. Provenge is an autologous cellular immunotherapy. It was the first FDA-approved immunotherapy made from a patient’s own immune cells. Since its approval in 2010, nearly 30,000 men with advanced prostate cancer have been prescribed the therapy.  
 
Unicorns threaten AstraZeneca’s strategy for early cancer
 
Perhaps the biggest threat to Baselga’s gamble is competition from unicorns, which include  Grail, and Guardant Health.  
 
Grail
Grail was spun-out of the gene sequencing giant Illumina in 2016 and backed by more than US$1.5bn in funding, including money from Microsoft cofounder Bill Gates and Amazon founder Jeff Bezos. Grail is on a quest to detect multiple types of cancer before symptoms manifest themselves by way of a single, simple and cheap blood test to find fragments of ctDNA. Grail has made significant progress in its quest to develop highly sensitive blood tests for the early detection of many types of cancer, but it still has to engage in further large-scale clinical studies. At the 2018 ASCO conference, the company presented data from its Circulating Cell-free Genome Atlas (CCGA) project, which showed detection rates ranging from 59% to 92% in patients with adenocarcinoma, squamous cell and small cell lung cancers. The rate of false positives - a major concern for the oncology community - was under 2%.
 
In an effort to improve its technology and its outcomes, Grail has been working with researchers from the Memorial Sloan Kettering Cancer CenterMD Anderson Cancer Center and the Dana-Farber Cancer Institute, to develop a new assay. According to results published in the March 2019 edition of the journal Annals of Oncology, this joint venture has successfully come up with a method, which can detect mutations in NSCLC patients’ blood with high sensitivity. In some cases, the technology was useful when tissue biopsies were inadequate for analysis. The new tool uses Illumina’sultradeep next-generation sequencing", which involves reading a region of DNA 50,000 times, on average, to detect low-frequency variants. White blood cells were also sequenced to filter out "clonal hematopoiesis", which are noncancerous signals that can come from bone marrow. The sequencing information was then fed to a machine learning algorithm developed by Grail to determine mutation readouts.
 
Guardant Health
The other unicorn for AstraZeneca to watch is liquid biopsy developer Guardant Health. Founded in 2013, it is now an US$8bn precision oncology company based in Redwood City, California US. In April 2019 Guardant presented data of its oncology platform at the American Association of Cancer Research (AACR) in Atlanta, US. The platform leverages Guardant’scapabilities in technology, clinical development, regulatory and reimbursement to drive commercial adoption, improve patient clinical outcomes and lower healthcare costs.  In pursuit of its goal to manage cancer across all stages of the disease, Guardant has launched two next-generation sequencing liquid biopsy-based Guardant360 and GuardantOMNI tests for advanced stage cancer patients, for minimal residual disease/recurrence monitoring and for early detection screening, respectively.
 
The Guardant360 test is used to track patients’ responses to drugs and select most effective future therapies. It can identify alterations in 73 genes from cfDNA and has been used by more than 6,000 oncologists, over 50 biopharmaceutical companies and all 28 of the National Comprehensive Cancer Network Centers. 
 
Further, Guardant has launched a new liquid biopsy called Lunar.  At the April 2019 AACR meeting the company presented data of Lunar’s use as a screen for early-stage colorectal cancer. The assay was used to test plasma samples taken from 105 patients with colorectal cancer and 124 age-matched cancer-free controls. It is the test’s utility as a screen for early-stage disease that should interest AstraZeneca most. Guardant expects to position Lunar as something approaching a true diagnostic: a screening test to identify solid tumours in the healthy population. Wider clinical studies of Lunar are expected to start soon and Guardant believes that Lunar’s market opportunity as a cancer screen is some US$18bn and sees a US$15bn market opportunity in recurrence monitoring.
 
Also, in April 2019 Guardant acquired Bellwether Bio,  a privately held company founded in 2015, for an undisclosed sum. Bellwether is focused on improving oncology patient care through its pioneering research into the epigenomic content of cfDNA. This could aid  Guardant in its efforts to develop a cancer screen and further advance its research into cancer detection at earlier stages of the disease.
 
Guardant is well positioned to develop individual early indications of cancer. Grail, on the other hand,  is well positioned to develop a pan-cancer test. Notwithstanding, both companies need to engage in further lengthy, large-scale clinical studies before it will become clear which of these strategies will be more successful. However, both unicorns and other start-ups are potential competitors to AstraZeneca’s endeavours to target early cancer.
 
Takeaways

AstraZeneca’sproposed bold and risky shift in its R&D strategy is to be welcomed since the early detection and treatment of cancer should significantly enhance the chances of a cure, which would radically improve the quality of life for millions and substantially reduce the vast and escalating costs associated with the disease. AstraZeneca has some advantages since over the past two decade it has significantly enhanced its technology and been developing a platform of therapies for early stage cancer. Notwithstanding, for its strategy to target early stage cancer to be successful the company will have to overcome intense, fast growing, well-resourced competition and substantial technical and markets challenges.  
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  • People are living longer, the prevalence of age-related degenerative disc disease is increasing and sufferers are more and more turning to spinal implant surgery as a solution
  • As this significantly raises the burden on over-stretched healthcare systems, so is spine surgery increasingly becoming a key target for cost reduction within healthcare systems
  • This intensifies the pressure on manufacturers to innovate and make spinal implants more cost effective

Can 3D printing and the use of new alloys reduce the high costs of producing and marketing spinal implants?
 
On January 8th 2019 surgeons at Joseph Spinea specialist surgery centre based in Tampa Bay Florida, were the first in the US to implant a 3D printed interbody fusion device, which was produced  by Osseus Fusion SystemsThe company uses its proprietary 3D printing technology, also known as additive manufacturing,  to build spinal implants from titanium material that is optimized for bone fusion and biological fixation. In August 2018, a suite of Osseus’s devices received clearance from the US Food and Drug Administration (FDA) for a  range of heights and lordotic (inward spinal curvature) angles, which make them adaptable for a variety of patient anatomies. The interbody fusion devices work by being packed with biomaterials and bone grafts and inserted in between two vertebrae, where they fuse with the spine and work to prevent back pain.
 
In this Commentary
 
This Commentary explores whether 3D printing and the use of new alloys could be an appropriate strategy to help spine companies reduce  their production and sales costs and enhance their market positions. Our suggestions here complement a strategy, described in a previous Commentary, for MedTech companies to develop and implement digital strategies to enhance their go-to-market activities, strengthen the value propositions of products and services and streamline internal processes. The reasons spine companies might consider both strategies are because spinal implant markets, which are segmented  by type of surgery, product and geography, are experiencing significant competitive, regulatory, pricing and technological challenges as well as mounting consumer pressure for improved outcomes; and the business model, which served as an accelerator of their financial success over the past decade is unlikely to be effective over the next decade.
 
3D printing
3D printing is a process, which creates a three-dimensional (3D) object by building successive layers of raw material. Each new layer is attached to the previous one until the object is complete. In the healthcare industry, 3D printing is used in a wide range of applications, such as producing dental crowns and bridges; developing prototypes; and manufacturing surgical guides and hearing aid devices. Increasingly, 3D printing is being used for the production of spinal implants.

 
Spine surgery increasing significantly
 
An estimated US$90bn is spent each year in the US on the diagnosis and management of low back pain (LBP). LBP, caused by age related degenerative disc disease, is one of the most common and widespread public health challenges facing the industrialized world. It is estimated that the condition affects over 80% of the global population and inflicts a heavy and escalating burden on healthcare systems. Also, LBP affects  economies more generally in terms of lost production due to absenteeism, early retirement and the psychosocial impact caused by the withdrawal of otherwise active people from their daily activities. According to the American Association of Neurological Surgeons, more than 65m Americans suffer from LBP annually and the Chicago Institute of Neurosurgery and Neuroresearch suggests that by the age of fifty, 85% of the US population is likely to show evidence of disc degeneration. It is estimated that 10% of all cases of LBP will develop chronic back pain, which is one of the main reasons for people to seek surgical solutions and this significantly raises the burden on over-stretched healthcare systems.
 
Findings of a study published in the March 2019 edition of Spine, entitled, “Trends in Lumbar Fusion Procedure Rates and Associated Hospital Costs for Degenerative Spinal Diseases in the United States 2004 to 2015”, report that the rate of elective lumbar fusion surgeries in the US has increased substantially over the past decade. Such trends are indicative of most advanced industrial societies, which  are changing and ageing, primarily driven by improvements in life expectancy and by a decrease in fertility. This results in people living longer, reaching older ages and having fewer children later in life. Over the next decade, these market drivers are expected to make spine surgery a key target for cost reduction within healthcare systems and this, in turn, is likely to increase pressure on manufacturers of spinal implants to make spine surgery more cost effective.

 

The first surgery using a 3D printed spinal implant
 
The first surgery to implant a 3D printed interbody fusion device was carried out in China in August 2014, when surgeon Liu Zhongjun from Peking University Hospital successfully implanted an artificial 3D printed vertebra into a 12-year-old bone cancer patient to help him walk again. Liu first removed a tumour located in the second vertebra of the boy's neck before replacing it with the 3D printed implant between the first and third vertebrae to allow him to lift his head. “The customized 3D printed technology made the disc replacement stronger and more convenient than normal procedures”, said Liu.

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Age of the aged and low back pain
 
In July 2017, a team of doctors, led by Xiao Jianru, Professor of Orthopaedic Surgery at Shanghai Changzheng Hospital, China, treated a 28-year-old woman with a massive, rare neck tumour, by giving her a 3D printed spine. The patient had to have six consecutive cervical vertebrae replaced because they had been affected by the cancer, which was challenging to treat with chemotherapy. Cervical vertebrae, seven in total, which form your spine column in the neck are the most delicate bones in your body. The patient was discharged from the hospital after the operation. Reports suggest that she was able to walk, but had some difficulties turning her head.
 
First US company to receive FDA approval for 3D printed spinal implants
 
The first US  company to receive a 510(k) FDA approval for a 3D printed spinal implant was 4WEB Medical, in 2012. The company was founded in 2008 and since then has become a leader in 3D printed implant technology. Following FDA clearance, the company launched its proprietary and patented Truss Implant platform, which features a unique open architecture that allows for up to 75% of the implant to be filled with graft material and includes an anterior spine Truss System, a cervical spine Truss System, an osteotomy Truss System and a posterior spine Truss System. In April 2018,  at the annual meeting of the International Society for the Advancement of Spine Surgery (ISASS) 4Web announced that it has surpassed 30,000 implants worldwide of its proprietary Truss Implant Technology.
 
There is a plethora of established MedTech companies entering the 3D printing spinal implant market, which include Stryker, K2M, DePuy Synthes, Camber Spine, CoreLink, Medicrea, Renovis, NuVasive and Zimmer Biomet. With Stryker’s acquisition of K2M and DePuy Synthes’ acquisition of Emerging Implant Technologies GmbH (EIT), both in September 2018, the market for 3D printed spinal implants is positioned to grow rapidly over the next few years.
 
Increasing FDA approvals for 3D printed spinal implants
 
Significantly, spinal implants have become one of the most common cases of the FDA-cleared 3D printed medical devices. For instance, in 2018 Zimmer Biomet received FDA clearance for the company’s first 3D printed titanium spinal implantEIT received FDA approval in 2018 for its 3D printed multilevel cervical cage, which can treat multiple injuries in both the middle and top parts of the spine. Centinel Spine Inc, a US company based in Pennsylvania, which develops, manufactures and markets spinal devices used to treat degenerative disc disease, also received FDA clearance in 2018 for its 3D printed spinal implants called FLX devices, which are titanium fusion implants that work to stabilize vertebrae from the front of the spine in order to increase the healing process for patients.

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MedTech must digitize to remain relevant

 
3D printing medical devices market
 
The 3D printing medical devices market is projected to grow at a CAGR of 17.5% and reach US$2bn by 2022. Currently, the market is dominated by North America, followed by Europe, Asia Pacific and the rest of the world. Over the next decade, the Asia Pacific 3D printing medical devices market is expected to grow at the highest CAGR. Emerging markets are attractive for spine companies as they have large patient populations, which are growing fast, rising government healthcare expenditure, vast and rapidly increasing middle classes, rising income levels and rising obesity cases.
One example is India, with a middle class about twice the size of the US population, an economy growing at a rate of 7% year-on-year and a pro-business Prime Minister who has established himself as the country’s most formidable politician in decades and is committed to increasing healthcare spending. According to the World Bank’s March 2018 India Development Update the GDP of India had surpassed that of France and was on track to overtake the UK economy to make India the 5th largest economy in the world. Significantly, India’s GDP per capita has reached US$2,000, which is generally recognised by economists as a “tipping point”: when a country’s economic prospects improve, peoples’ confidence increases, and investment momentum remains at a desirable level for a long period. For instance, when the GDP per capita of China and South Korea reached US$2,000 their respective economies witnessed more than a decade of high growth with an average growth rate of about 10%. India appears to be on the cusp of something similar.
 
3D printing's competitive advantages
 
3D printing, although in its infancy, has the capacity to manufacture products of any complexity anywhere, at any time, which gives it a significant competitive-advantage over traditional manufacturing. Further, 3D printing is cheaper and quicker than traditional production methods because there is less machine, material, labour and inventory costs and less materials' waste. Complex designs can be created as a computer added design (CAD) model and then transformed into a reality in just a few hours. By contrast, traditional manufacturing methods can take weeks or even months to go from the design stage to a prototype and then onto the production process. Also, 3D printing is cost-effective in low production quantities and more environmentally friendly as the place of manufacture can be the same as the place of the product’s application.

The benefits of 3D printing specifically for spinal surgery include; (i) implants can be shaped to custom-fit patients, (ii) porosity and pore size can be personalized to a specific patient’s bone quality, which may improve integration. But perhaps the most significant potential advantage is bioprinting, where cells, growth factors and biomaterials are used to create living tissue.

 
Thinking beyond traditional metals used for spinal implants
 
Some spine companies are complementing their 3D printing endeavours by experimenting with new and stronger alloys. For the past two decades metals used for spinal implants have been mostly composed of cobalt chrome, titanium and stainless steel. The physical properties of these have prevented producers to reduce the size of spinal implants. But this is changing with the introduction of new alloys such as molybdenum-rhenium (MoRe), which is stronger than the traditional metals used for spine implants and has the potential to use less metal to achieve stronger, more durable constructs, while allowing for smaller sized products.

Already, MoRe is used for stents in cardiology and findings of a small animal study presented at the 2018 North American Spine Society meeting in Los Angeles suggested that MoRe is significantly more hydrophilic (having strong affinity to water) and therefore friendlier to bone when compared with cobalt chrome, titanium and stainless steel. This suggests MoRe might provide smaller rods with smaller pedicle screw heads, which decrease the prevalence of protruding, painful hardware in patients with wasting of the body due to severe chronic illness. Further, smaller spinal implants would be beneficial in minimally invasive spine surgery.

Another added benefit of MoRe is that it potentially decreases biofilm formations, which are typically caused by chronic medical device-related infections and allergenicity when compared to the traditional metals used in spine surgery. Bacteria are tougher to kill when they attach to the surface of a spinal implant, even before they form a biofilm. Research findings published in the December 2018 edition of Heliyon draws attention to the prevalence of the  antibiotic-resistant nature of bacterial biofilm infections on implantable medical devices and describes current state-of-the-art therapeutic approaches for preventing and treating biofilms. As the range of materials for spinal implants with improved biocompatibility, biodegradability and load bearing properties increase, so are biofilm infections expected to decrease.

 
Takeaways
 
Spine surgery is positioned to become a key target for cost reduction within healthcare systems over the next decade. This is because low back pain, caused by age related degenerative disc disease, is a common condition affecting most individuals at some point in their lives and increasingly people are turning to surgical solutions. As a consequence, we can expect increased pressure on stakeholders, including spinal implant manufacturers, to innovate to make spine surgery more cost effective. 3D printing and the use of new alloys, while in their infancy, are possible strategies to reduce the costs of producing spinal implants while improving patient outcomes.
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  • Two Boston Consulting Group studies say MedTech innovation productivity is in decline
  • A history of strong growth and healthy margins render MedTechs slow to change their outdated business model
  • The MedTech sector is rapidly shifting from production to solutions
  • The dynamics of MedTechs' customer supply chain is changing significantly and MedTech manufacturers are no longer in control
  • Consolidation among buyers - hospitals and group purchasing organisations (GPO) - adds downward pressure on prices
  • Independent distributors have assumed marketing, customer support and education roles
  • GPOs have raised their fees and are struggling to change their model based on aggregate volume
  • Digitally savvy new entrants are reinventing how healthcare providers and suppliers work together
  • Amazon’s B2B Health Services is positioned to disrupt MedTechs, GPOs and distributors 
  • MedTech manufacturers need to enhance their digitization strategies to remain relevant
 
MedTech must digitize to remain relevant
 
MedTech companies need to accelerate their digital strategies and integrate digital solutions into their principal business plans if they are to maintain and enhance their position in an increasingly solution orientated healthcare ecosystem. With growing focus on healthcare value and outcomes and continued cost pressures, MedTechs need to get the most from their current portfolios to drive profitability. An area where significant improvements might be made in the short term is in MedTechs' customer facing supply chains. To achieve this, manufacturing companies need to make digitization and advanced analytics a central plank of their strategies.
 
In this Commentary
 
This Commentary describes the necessity for MedTechs to enhance their digitization strategies, which are increasingly relevant, as MedTech companies shift from production to solution orientated entities. In a previous Commentary we argued that MedTechs history of strong growth and healthy margins make them slow to change and implement digital strategies. Here we suggest that the business model, which served to accelerate MedTechs' financial success over the past decade is becoming less effective and device manufacturers need not only to generate value from the sale of their product offerings, but also from data their devices produce so they can create high quality affordable healthcare solutions. This we argue will require MedTechs developing  innovative strategies associated with significantly increasing their use of digital technology to enhance go-to-market activities, strengthen value propositions of products and services and streamline internal processes.
 
MedTechs operate with an outdated commercial model
 
Our discussion of digitization draws on two international benchmarking studies undertaken by the Boston Consulting Group (BCG). The first,  published in July 2013 and entitled, “Fixing the MedTech Commercial  Model: Still Deploying ‘Milkmen’ in a Megastore World” suggests that the high gross margins that MedTech companies enjoy, particularly in the US, hide unsustainable high costs and underdeveloped commercial skills. According to BCG the average MedTech company’s selling, general and administrative (SG&A) expenses - measured as a percentage of the cost of goods sold -  is 3.5 times higher than the average comparable technology company. The study concludes that MedTechs' outdated business model, dubbed the “milkman”, will have to change for companies to survive. 
 
BCG’s follow-up 2017 study
 
In 2017 BCG published a follow-up study entitled, “Moving Beyond the ‘Milkman’ Model in MedTech”, which surveyed some 6,000 employees and benchmarked financial and organizational data from 100 MedTech companies worldwide, including nine of the 10 largest companies in the sector. The study suggested that although there continued to be downward pressure on device prices, changes in buying processes and shrinking gross margins, few MedTech companies “have taken the bold moves required to create a leaner commercial model”.
 
According to the BCG’s 2017 study, “Overall, innovation productivity [in the MedTech sector] is in decline. In some product categories, low-cost competitors - including those from emerging markets - have grown rapidly and taken market share from established competitors. At the same time, purchasers are becoming more insistent on real-world evidence that premium medical devices create value by improving patient outcomes and reducing the total costs of care”. The growth and spread of value-based healthcare has shifted the basis of competition beyond products, “toward more comprehensive value propositions and solutions that address the entire patient pathway”. In this environment, MedTechs have no choice but to use data to deliver improved outcomes and a better customer experience for patients, healthcare providers and payers.
 
MedTech distributors increasing their market power and influence
 
Although supply chain costs tend to be MedTechs' second-highest expense after labour, companies  have been reluctant to employ digital strategies to reduce expenses and increase efficiencies. As a consequence, their customer supply chains tend to be labour intensive relationship driven with little effective sharing of data between different territories and sales teams. Customer relations are disaggregated with only modest attention paid to patients and payors and insufficient emphasis on systematically collecting, storing and analysing  data to support value outcomes.   
As MedTech manufacturers have been slow to develop strong and effective data strategies, so MedTech distributors have increased their bargaining power through M&As and internationalisation. Some distributors have even assumed marketing, customer support and education roles, while others have launched their own brands. MedTechs' response to these changes has been to increase their direct sales representatives. However, consolidation among buyers - hospitals and GPOs -  and the extra downward pressure this puts on prices, is likely to make it increasingly costly for MedTechs to sustain large permanent sales forces. 

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Advantages of distributors but no way to accurately measure sales performance

Notwithstanding, the distributor model is still common with MedTechs and has been successful in many markets for a long time. Independent distributors are often used when producers have small product portfolios. In smaller markets, distributors are employed primarily to gain economies of scale as they can combine portfolios of multiple companies to create a critical mass opportunity and  obtain better and faster access to markets.
 
MedTechs have a history of investing in sales force effectiveness (SFE) typically to increase the productivity of sales representatives. Sales leaders have some indication that this pays-off through incremental revenue growth and profits, but they struggle to assess the true performance of such investments not least because SFE includes a broad range of activities and also it is almost impossible to obtain comparative competitor data.
 
Changing nature of GPOs
 
GPOs also have changed. Originally, they were designed in the early 20th century to bring value to hospitals and healthcare systems by aggregating demand and negotiating lower prices among suppliers. Recently however they have raised their fees, invested in data repositories and analytics and have been driving their models and market position beyond contracting to more holistic management of the supply chain dynamics. Notwithstanding, many GPOs are struggling to change their model based on aggregate volume and are losing purchasing volume amid increasing competition and shifting preferences.
 
New entrants
The changing nature of MedTechs' customer supply chain and purchasers increasingly becoming concerned about inflated GPOs' prices have provided an opportunity for data savvy new entrants such as OpenMarketsThe companyprovides healthcare supply chain software that stabilizes the equipment valuation and cost reduction and aims to reinvent how healthcare providers and suppliers work together to improve the way healthcare equipment is bought and sold. OpenMarkets’ enhanced data management systems allow providers to better understand what they need to buy and when. The company represents over 4,000 healthcare facilities and more that 125 equipment suppliers; and provides a platform for over 32,000 products, which on average sell for about 12% less than comparable offerings. In addition, OpenMarkets promotes cost efficiency and price transparency as well as stronger collaboration between providers and suppliers.
 
Amazon’s B2B Health Services
 
But potentially the biggest threat to MedTech manufacturers, GPOs and distributors  is Amazon’s B2B Health Services, which is putting even more pressure on MedTechs to rethink their traditional business models and to work differently with healthcare providers and consumers. With a supply chain in place, a history of disrupting established sectors from publishing to food and a US$966bn market cap, Amazon is well positioned to disrupt healthcare supply chain practices, including contracting. In its first year Amazon’s B2B purchasing venture generated more than US$1bn and introduced three business verticals: healthcare, education and government. Already, hundreds of thousands of medical products are available on Amazon Business, from hand sanitizers to biopsy forceps. According to Chris Holt, Amazon’s B2B Health Services program leader, “there is a needed shift from an old, inefficient supply chain model that runs on physical contracts with distributors and manufacturers to Amazon's marketplace model”.

If you look at the way a hospital system or a medical device company cuts purchase orders, identifies suppliers, shops for products, or negotiates terms and conditions, much of that has been constrained by what their information systems can do. I think that has really boxed in the way that companies’ function. Modern business and the millennials coming into the workplace, can’t operate in the old way,” says Holt.

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Millennials are used to going to Amazon and quickly finding anything they need; even the most obscure items. According to Holt, “A real example is somebody who wants to find peanut butter that is gluten-free, non-GMO, organic, crunchy and in a certain size. And they want to find it in three to five clicks. That’s the mentality of millennial buyers at home, and they want to be able to do the same things at work. . . . The shift from offline traditional methods to online purchasing is very significant. It is our belief that the online channel is going to be the primary marketplace for even the most premium of medical devices in the future. That trend is already proven by data. So, we’ve created a dedicated team within Amazon Business to enable medical product suppliers to be visible and participate in that channel.
MedTechs fight back
 
According to the two BCG reports, MedTech companies can fight back by using digital technologies to strengthen and improve their go-to-market activities. This, according to BCG, would enhance MedTechs' connectivity with their customers and help them to learn more about their needs. Indeed, employing digitization to improve customer-facing activities could help standardise order, payment and after-sales service behaviour by defining and standardizing terms and conditions. This could provide the basis to help MedTechs increase their access to a range of customers - clinicians, institutions, insurers and patients - and assist them to tailor their engagements to the personal preferences of providers and purchasers. This could provide customers with access to product and service information at anytime, anywhere and could form the basis to implement broader digitalized distribution management improvements, which focus on value-based affordable healthcare in the face of escalating healthcare costs and variable patient outcomes.
 
Predictive models
 
Many companies use predictive-modelling tools to forecast demand and geo-analytics to speed delivery and reduce inventories. Online platforms provide customers with an easy way to order products and services, transparently follow their shipping status and return products when necessary. Barcodes and radio-frequency identification (RFID) chips, which use electromagnetic fields to automatically identify and track tags that contain electronically stored information attached to products, help customers track orders, request replenishments and manage consignment stock.
 
Back-office improvements
 
Further, the 2017 BCG study suggests that MedTechs only have made limited progress in improving their back-office operations. Many manufacturers  have more employees in their back offices than they do in their customer-facing functions and fail to leverage economies of scale. There is a significant opportunity for MedTechs to employ digital strategies to enhance the management of their back-office functions, including centralizing certain activities that are currently conducted in multiple individual countries.
 
Takeaway
 
For the past decade MedTech manufactures have been slow to transform their strategies and business models and still have been commercially successful. Some MedTech companies are incorporating digital capabilities into their products by connecting them to the Internet of Things (IoT), which potentially facilitate continuous disease monitoring and management. Notwithstanding, such efforts tend to be isolated endeavours - “one-offs” - and are not fully integrated into companies’ main strategies. This could run the risk of MedTech executives kidding themselves that they are embracing digitization while underinvesting in digital technologies. The two BCG studies represent a significant warning since digitization is positioned to bring a step-change to the MedTech sector, which potentially could wound successful manufacturers if they do not change.
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