How do recent acquisitions by big pharma impact the landscape?

Recent acquisitions by BMS, Eli Lilly, and AstraZeneca highlight a growing interest in nuclear medicine among major pharmaceutical companies, which could lead to the accelerated introduction of new radiopharmaceuticals, larger clinical trials, and faster uptake of radioligand therapy. These companies’ financial power enables increased funding and mergers and acquisition activity, expansion into new therapeutic areas and indications (breast cancer, pancreatic cancer, and possibly Alzheimer’s disease), and the ability to drive policy changes in key markets like the US. Such changes could include better reimbursement rates and coverage for therapies, more access to government funding, and clearer definition of regulatory requirements, among others.

How do recent market access and reimbursement developments impact investment opportunities in nuclear medicine?

Reimbursement continues to pose a significant challenge in the US, but there have been some promising developments, such as the new Proposed Medicare Hospital Outpatient Prospective Payment System (OPPS) Rule2 for calendar year 2025 for improved payment for specialized diagnostic radiopharmaceuticals by Center for Medicare & Medicaid Services to ensure providers receive adequate reimbursement. Despite ongoing political discussions, including a proposal in the US to classify radiopharmaceuticals as drugs rather than supplies3 and to extend pass-through periods, reimbursement remains a major concern for novel radiopharmaceuticals.

In the EU market, reimbursement is determined at a national level, resulting in varying approaches across countries. Understanding the reimbursement landscape in each country, particularly in key markets like the UK and EU4, is crucial for companies planning to develop and launch new products.

Are there any emerging trends or disruptive technologies that could affect the industry going into 2025?

The next major trend poised to reshape the industry is the anticipated approval of the first targeted alpha therapy (TAT). This breakthrough has the potential to revolutionize both the nuclear medicine field and oncology. RayzeBio, now part of BMS, is leading the way with RYZ101, also known as Ac225 DOTATATE, which could become the world’s first approved TAT, positioning the company as a pioneer in this transformative area. However, significant challenges remain, including the availability of Ac225 and other necessary isotopes and the likelihood of favorable reimbursement.

The stability and sustainability of a robust supply chain can also present problems; requirements include adequate floor space at contract development and manufacturing organization facilities, delivery networks capable of handling short half-life isotopes like Pb-212, and redundancies in general across the manufacturing chain to ensure unhindered access. Despite these obstacles, the industry remains optimistic and is gearing up to tackle these challenges head-on.

Sources

1. GlobalData and Marketandmarkets.
2. Center for Medicare & Medicaid Services. Hospital Outpatient Prospective Payment System (OPPS). https://www.cms.gov/cms-guide-medical-technology-companies-and-other-interested-parties/payment/opps#:~:text=Transitional%20pass-through%20payments%20provide,the%20cost%20of%20those%20items.
3. H.R.3772 – Medicare Diagnostic Radiopharmaceutical Payment Equity Act of 2019. https://www.congress.gov/bill/116th-congress/house-bill/3772.