Tag

Tagged: commentary

Sponsored
  • CRISPR-Cas9 genome editing technology discovered in 2012 has revolutionized biological science and brought hope to millions of people born with incurable inherited killer diseases
  • In July 2018 the UK’s Nuffield Council on Bioethics endorsed the technology to make changes at the cell level in the human body that are heritable
  • This alarms bioethicists because there is no universally agreed regulation for CRISPR and the technology is cheap, easy-to-use and accessible and the line between “therapy” and “enhancement” is blurred
  • CRISPR was invented in the West but is rapidly being transformed into therapies in China where regulation is less than stringent
  • Will genome editing be used to enhance off-springs that satisfy parents’ preferences for children with specific characteristics?
 
 
CRISPR-Cas9 genome editing a 2-edged sword 
 

The genie is out of the bottle!
 
On the 17th July 2018 the UK’s Nuffield Council on Bioethics published a report entitled, Genome Editing and Human Reproduction: Social and Ethical Issues, which concluded that germline editing, a process by which every cell in the human body could be altered in such a way that the change is heritable, is “morally permissibly” under certain circumstances. The Council was referring to developments of an invention made in 2012 by scientists Jennifer Doudna, and Emmanuelle Charpentier. They discovered how to exploit an oddity in the immune system of bacteria to edit genes, which resulted in CRISPR-Cas9, (an acronym for Clustered Regularly Interspaced Short Palindromic Repeats), which is generally considered the most important invention in the history of biology. Since its discovery, modified versions of the technology have found a widespread use to engineer genomes and to activate or to repress the expression of genes. Clinical studies testing CRISPR-Cas9 in humans are underway.

 
In this Commentary

In this Commentary we: (i) describe CRISPR-Cas9 and indicate how it has impacted medicine, biotechnology and agriculture, but suggest that it is most famous for its potential to modify human embryos to provide therapies for inherited killer diseases for which there are no known cures, (ii) suggest that although the technology is gaining regulatory support for its use in humans, there is no universal regulatory agreement. Some countries remain opposed to using CRISPR to edit human embryos while in China regulations is less than stringent. This patchy and loose state of affairs raise concerns among bioethicists, (iii) describe a non-profit agency that has significantly increased the accessibility of the technology, which has helped to democratise CRISPR, but also makes it easier for less stringently controlled laboratories to acquire it, (iv) briefly describe the Chinese scientists first use of the technology in humans and some of the unintended consequences which resulted. We provide examples of research that followed and briefly describe the US-China race to transform CRISPR into viable therapies, and suggest that China, helped by laxed regulation, is winning the race, (v) suggest that these factors, plus the fact CRISPR blurs the distinction between ‘therapy’ and ‘enhancement’, seems to convince bioethicists that the technology at some point in the future will be used to create ‘designer babies’, (vi) conclude by noting that for millennia people have been using radical and painful methods to modify their own and their children’s bodies and this seems to suggest that in time, germline editing will be perceived as a logical extension of these customs and practices, the genie is out the bottle and customize children are likely to become the norm.
 
CRISPR-Cas9

CRISPR is a mechanism deployed by bacteria to identify the DNA of invading viruses and is used by scientists to target a specific gene. Cas-9 is an enzyme, which acts like a pair of molecular scissors to cut out a piece of DNA and, if need be, replace it with a new gene. The process is faster, cheaper and easier to use than traditional genetic modification and has been likened to editing a Word document on a computer. Thus, gene editing has been taken away from highly skilled and tightly regulated molecular biologists and made more widely available. This not only democratizes science but also heightens ethical concerns.
 
CRISPR technologies impact medicine biotechnology and agriculture
 
Since the breakthrough was made in 2012, CRISPR-Cas9 has quickly development into a powerful, cheap and accessible tool in genetics. The technology is programmable, efficient, precise and scalable and has driven significant advances across medicine, biotechnology and agriculture throughout the world. As the world’s population and average temperatures increase, the demand for larger, more nutritious harvests and climate-adaptable crops will grow. The application of CRISPR technology to agriculture allows for an efficient and accurate mode of genetic manipulation to meet these increasing needs. The technology also has been used in the fight against malaria. According to a 2018 World Health Organization report, in 2016 there were 216m cases of malaria worldwide and 445,000 deaths from the disease. Malaria is spread by the female Anopheles-gambiae mosquito, which is one of 3,500 species of mosquitoes. Scientists have used CRISPR technology to edit the genes of this specific type of mosquito to avoid the malaria causing parasite. In a study carried out at Imperial College London and published in the September 2018 edition of Nature Biotechnology researchers succeeded in destroying a population of trapped Anopheles mosquitoes by using CRISPR  technology to genetically alter cells  to spread a genetic modification that blocks female reproduction so, over time, the malaria spreading Anopheles mosquitoes die out. The research demonstrates how a specific CRISPR application can propagate a particular suite of genes throughout an entire population or species and empower scientists in the war against diseases. “It provides hope in the fight against a disease that has plagued mankind for centuries,” says Andrea Crisanti, lead author of the Imperial study.
 
But the one application, which has made CRISPR famous is the modification of the human genome, which promises to cure some of the world’s deadliest diseases for which there are no known therapies. There are some 10,000 genetic diseases of which less than 6% have approved treatments.
 
Regulatory support
 
CRISPR genome editing technologies have been gaining regulatory acceptance for their use in humans and an increasing number of scientists in the US, UK and China have reached conclusions similar to those of the Nuffield Council, and suggest that if germline editing is shown to be safe and there are no medical alternatives, it should be permitted to prevent children being born with fatal diseases. In 2017, the UK’s Human Fertilization and Embryology Authority approved an application to use genome editing, which allows scientists to change an organism’s DNA in research on human embryos. Also, in 2017 a report from the US National Academy of Sciences (NAS) stated that clinical trials for editing-out heritable diseases could be permitted in the future for serious conditions under stringent oversight. At the same time as the Nuffield Council published its findings, - July 2018 - the US Food and Drug Administration (FDA) Commissioner Scott Gottlieb announced a new regulatory framework for genome editing for rare diseases. The following month, - August 2018 - the FDA along with the US National Institutes of Health (NIH) issued joint guidelines for a new streamlined process for assessing the safety of gene-therapy human clinical studies.  And in an August 2018 New England Journal of Medicine editorial Gottlieb and NIH Director Francis Collins argue that, “there is no longer sufficient evidence to claim that the risks of gene therapy are entirely unique and unpredictable - or that the field still requires special oversight that falls outside our existing framework for ensuring safety.”
 
No international regulatory framework for CRISPR triggers concerns
 
Despite increasing support for genome editing, to-date no internationally agreed regulatory framework exists that addresses the ensuing scientific, socio-ethical and legal challenges CRISPR technologies pose for regenerative and personalised medicine. Regulation is on a country-by-country basis and most nations struggle to assess whether gene editing may or may not be different from classical genetic engineering. Several nations remain opposed to the use of the technology in humans. The most contentious issue is human germline editing.

In Canada human germline editing is a criminal offence and sanctions range from fines of US$400,000 and up to ten years imprisonment. However, there is mounting pressure from Canadian scientists to change the law. France restricts genome editing research and supports the Oviedo Convention, which is the first multilateral binding instrument entirely devoted to bio-law. It came into force in 1999, backed by the Council for Europe and aims to prohibit the misuse of innovations in biomedicine. The treaty states that, “An intervention seeking to modify the human genome may only be undertaken for preventive, diagnostic, or therapeutic purposes and only if its aim is not to introduce any modification in the genome of any descendants”. In Germany germline editing is constrained by its 1990 Embryo Protection Actwhich prohibits the generation and use of embryos for basic research, and also prohibits the harvesting of embryonic cells. South Korea’s Bioethics and Biosafety Act prohibits genetic experimentation, which modifies human embryos. Western observers suggest that regulation in China is “thin and tends to be at the provincial and hospital levels. It has been reported that Chinese hospital review boards have approved clinical studies involving gene-editing and cancer patients without fully understanding the nature and power of the technology.
The “dark-side” of CRISPR technology

Weak regulation raises concerns about the level of ethical conduct in clinical studies and the potential dangers this holds for future therapies. Cognisant of CRISPR’s powerful capabilities, its relative cheapness and accessibility, (see below) James Clapper, the former US Director of National Intelligence describes CRISPR-Cas9 gene editing in the 2016 and 2017 Agency’s Worldwide Threat Assessment reports submitted to the US Congress as, “a potential weapon for mass destruction”. Jennifer Doudna, one of the inventors of CRISPR-Cas9 says that there are things which you would not want the technology used for and, “most of the public does not appreciate what is coming”. These sentiments resonate with bioethicists concerned about the absence of stringent universal regulation and the technology getting into the “wrong hands” and resulting in “designer babies”, an escalation of societal inequalities and increased safety and biosecurity issues.
You might also like:

The global competition to translate genomic data into personal medical therapies

PART 1
 

and

PART 2
 
 
Democratizing the CRISPR technology
 
Notwithstanding, many scientists view the ease of access to CRISPR technologies as a significant driver of cutting-edge research and the speed at which therapies for life-threatening diseases will enter clinics. The organization most responsible for CRISPR’s widespread accessibility is Addgenea self-sustaining, non-profit plasmid repository, which facilitates the exchange of genetic material between laboratories throughout the world. (A plasmid is a small DNA molecule within a cell that is physically separated from a chromosomal DNA. It can replicate independently and is used in the laboratory manipulation of genes). It is free for scientists to deposit plasmids in Addgene and a nominal fee is charged for requests. This allows for maintenance and growth of the repository without reliance on grants or external funding. Founded in 2004, Addgene has significantly reduced the frustration scientists experience sharing plasmids with one another. The organization has developed into an important one-stop-shop for depositing, storing, and distributing plasmids globally and this has significantly enabled the democratization of CRISPR technologies. More than 6,300 CRISPR-related plasmids have been developed by over 330 academic laboratories throughout the world and deposited with Addgene. Since 2013, the organization has distributed over 100,000 CRISPR plasmids to some 3,400 laboratories in more than 75 countries. 
 
Mixed results when CRISPR was first used in humans
 
CRISPR technology was first used in humans in China, when a group of scientists led by Junjiu Huang from Sun Yat-sen University in Guangzhou, attempted to modify the gene responsible for β-thalassemia, a potentially fatal blood disorder. Although the genomes of human embryos edited by the scientists could not be developed into a foetus, the researchers had difficulties publishing their findings because of ethical concerns. After being rejected by the journals Science and Nature their paper was published in 2015 in the journal Protein & Cell. The work triggered an international debate, but the research had a low success rate: only 4 of the 54 embryos that survived the technique carried the repaired genes. Huang and his colleagues identified two challenges. One was unintended genetic modifications - off target effects - when CRISPR either changes a gene scientist did not want changed or it fails to change a gene that they did. The second was that embryos, which did not get edited correctly mixed with those that did and became what is referred to as a “mosaic”.  
 
New study discovers the deletion of thousands of DNA bases
 
Initially, these anomalies were thought to be minimal and improvements to the technique were thought to be able to reduce them so that they were virtually undetectable. Indeed, since 2015 the science of human genome editing has advanced significantly and there has been an explosion of research. In 2017 alone, there were some 3,500 research papers published on CRISPR technologies but concerns about CRISPR’s accuracy remain. During the past three years of intense research CRISPR-Cas9 became popularly perceived as a technique that can edit genetic code to correct defects inside individual cells and prevent and heal many intractable illnesses. Notwithstanding, also there has been a growing concern among scientists that because Cas9 enzymes reprogram the DNA of a cell, which is the fundamental building block for the development of an organism, the technique, if inaccurate, may cause more harm than good. Recent research supports this view. A study published in the July 2018 edition of  the journal Nature Biotechnology discovered deletions of thousands of DNA bases, including at spots far from the edit. Some of the deletions can silence genes that should be active and activate genes that should be silent, including cancer-causing genes. This suggests that previous methods for detecting off-target mutations may have underestimated their true scale and therefore the potential for unintended consequences when using CRISPR technologies might be higher than originally thought. This finding poses a significant challenge for developing policy associated with CRISPR because you do not know what off-target effects will occur in humans until you use the technology.
 
Who is developing CRISPR-Cas9 therapies?
 
Notwithstanding, CRISPR–Cas9 is fast entering mainstream R&D and is perceived as a principal technology for treating diseases with a genetic basis and is increasingly playing a significant role in drug discovery. Scientists use the technology to either activate or inhibit genes and can determine the genes and proteins that cause or prevent specific diseases and thereby identify targets for potential therapies. Notwithstanding, drug development is a long and expensive process: it can take more than a decade and cost some US$2bn for researchers to move from the discovery of a target molecule to the production of a clinically approved therapy.  So, it could be some time before the first drugs using CRISPR–Cas9 gene editing make it to the clinics. Notwithstanding, a lot has been achieved in a relatively short time.
 
Research examples

UK examples of research using CRISPR technology include scientists from the Huntington’s Disease Centre at University College London’s Institute of Neurology, who in 2017 completed the first human genetic engineering study, which targeted the cause of Huntington’s disease and successfully lowered the level of the harmful huntingtin protein that irreversibly damages the brains of patients suffering from this incurable degenerative condition.  In another study using CRISPR technology and published in a 2017 edition of the New England Journal of Medicineresearchers from Barts Health NHS Trust and Queen Mary University London  made a significant step towards finding a cure for haemophilia A, a rare incurable life threatening-blood disorder, which is caused by the failure to produce certain proteins required for blood clotting. 
 
Human clinical studies
 
Although CRISPR has proved its worth as a research tool, its use as a therapeutic is still uncertain. This is partly because the technology is so new there is a dearth of data upon which to base clinical evaluations. Notwithstanding, since Chinese scientists first used CRISPR to edit a human embryo's genome, new and more accurate variants of CRISPR have been developed. At about the same time - 2015 - that Huang published his findings using CRISPR for the first time in humans, two children with Acute Lymphoblastic Leukaemia, an incurable cancer, were treated at Great Ormond Street Hospital (GOSH) in London with a version of CRISPR called CAR-T cell therapy. This entails extracting blood cells from patients, then using CRISPR technologies to edit the T cells outside the body - ex vivo gene therapy - in order to transform the cells into enhanced cancer fighters before reintroducing them back into the patient’s blood stream. The treatment proved to be such a success that in 2018 CAR-T cell therapy was made available on the NHS. A US clinical study using the same technique started in August 2018 for people with Acute Lymphoblastic Leukaemia
 
Over the past three years scientists in China have used newer versions of CRISPR to genetically engineer cells of at least 86 cancer and HIV patients. These cases form part of eleven human clinical studies using CRISPR-Cas9 technologies, ten of which are being undertaken in China. Another development of CRISPR is ‘base-editing’, which chemically modifies rather than cuts DNA. An August 2018 edition of the journal Molecular Therapy, describes how scientists in China used  base editing, to remodel the DNA of human embryos to treat patients with the Marfan syndrome, which is a relatively common inherited connective tissue disorder with significant morbidity and mortality. A further milestone for the technology was reported 2018 when a study, led by Zheng Hu of the First Affiliated Hospital, Sun Yat-Sen University, Guangzhou, Guangdong, China, was the first to edit human cells while inside the body in an attempt to eliminate the human papilloma virus, which is the main cause of cervical cancer.
 
Company activity and clinical studies
 
Since the first publications in 2012 showcasing CRISPR-Cas9 as a gene editing tool, a number of companies have been set up to leverage the technology to develop innovative therapies. For example,  Editas Medicine, was founded in 2013 by Feng Zhang, Jennifer Doudna, David Liu, George Church, and J.Keith Joung. However, just a few weeks after the company’s formation, Doudna stopped all involvement with Editas after Zhang was granted a number of CRISPR patents and issues concerning intellectual property began to appear. In October 2018 Editas filed an Investigational New Drug (IND) application with the US Food and Drug Administration (FDA) for a clinical study of a CRISPR genome editing medicine called EDIT-101 for the treatment of Leber Congenital Amaurosis type 10 (LCA10). This is a serious eye disorder that affects the retina, which is the specialized tissue at the back of the eye that detects light and colour. People with LCA10 typically have severe visual impairment from infancy.

In 2018 the European Patent Office granted Cellectis, a French biopharmaceutical company, the first patent to use CRISPR technology in human T cells.The patent will protect the application of CRISPR gene editing for T cell research until 2034, meaning every other company employing similar systems will need a license from Cellectis. Also, in 2018 CRISPR Therapeutics, co-founded by Emmanuelle Charpentier began a clinical study using CRISPR genome editing technologies and a similar ex vivo approach to target the blood disorder β-thalassemia. As yet no CRISPR therapies have reached the clinic.
 
US-China competition
 
There is intense and growing scientific competition between the US and China. Although CRISPR was invented in the West, it is more rapidly being transformed in China into therapies that can be used in clinics. An article in a January 2018 edition of the Wall Street Journal suggests that regulation governing genome editing of human embryos in China is much less stringent than in the West where researchers have to pass muster with hospital review boards, ethics committees and government agencies before receiving approval. In China it is not unusual simply for hospital committees to give such permissions. According to Carl June, director of translational research at the Abramson Cancer CenterUniversity of Pennsylvania and well-known for his research into T-cell therapies for the treatment of cancer, “We are at a dangerous point in losing our lead in biomedicine. It is hard to know what the ideal is between moving quickly and making sure patients are safe”. Western scientists believe that the less that stringent regulation in China gives Chinese researchers a significant competitive advantage in the race to get CRISPR therapies into clinics and bioethicists believe that loose regulation will result in unintended consequences that will harm patients and lead to “designer babies”, which could set-back the field for everyone.
 
Blurred line between therapy and enhancement
 
What makes regulation challenging is that CRISPR technologies blur the distinction between “therapy” and “enhancement”. Indeed, the 2018 Nuffield Council report referred to at the beginning of this Commentary suggests that such a distinction between therapy and enhancement cannot be expected to hold. Thus, it seems reasonable to assume that sometime in the future, CRISPR technologies, which are cheap, easy to use and accessible could be used to genetically enhance off-springs. In the first instance this solely might be focused on eradicating life-threatening diseases, but in the longer term it seems probable, especially in the absence of any universally agreed and tightly administered regulations, that genome editing will be used to create off-springs, which satisfy parents’ preferences for children with specific characteristics. Further, CRISPR technology is becoming popular among DIY scientists and biohackers – people who experiment on themselves - which exacerbates the concerns of bioethicists.
 
People have been radically altering bodies for millennia
 
Another reason to believe that germline editing will be used for ‘cosmetic’ enhancements rather than medical therapies is that for millennia people have used radical techniques to modify their own and their children’s bodies for cosmetic rather than therapeutic purposes. Here we illustrate the point with a few examples.
 
From the Song dynasties, which ruled China between 960 and 1279 until the early 20th century, the Chinese practiced the custom of breaking their first daughter’s toes and tightly binding them under the soles of their feet in order to stunt growth so that when the girl grew up she would walk diffidently, which was perceived as attractive. In England during the Victorian era between the mid 19th and the beginning of the 20th century, women, to make themselves attractive to men, corseted their bodies so tightly to create twelve-inch waists that their internal organs were redistributed with potentially dangerous consequences. Girls as young as 4 from the Kayan tribe of Myanmar use heavy brass coils to elongate their necks; a painful tradition dating back to the 11th century. The brass coils, that weigh an average of 10 kilos, deform their collar bones and neck and shoulder muscles. The Mursi tribe in Africa cut the lower lips of girls and insert plates to stretch the lips up to 12 cm in diameter.
 
In the 1970s and 1980s elective cosmetic surgical procedures gained popularity among wealthy people on the East and West coasts of America in order to enhance their appearance. The trend soon became global through the explosion of mass media. According to the International Society of Aesthetic Plastic Surgery in 2017 there was a 9% overall annual increase in surgical and nonsurgical cosmetic procedures globally. The US was the leader, accounting for 17.9% of all procedures. The top five countries were the US, Brazil, Japan, Italy and Mexico, which together accounted for 41.4% of all cosmetic surgical procedures worldwide. Russia, India, Turkey, Germany and France completed the top ten countries. In 2017, 400,000 American women elected to have breasts augmentation surgery; a 41% increase since 2000. About 1m rhinoplasties are carried out each year, with high volumes in Brazil and Mexico. The International Society of Aesthetic Plastic Surgery also reported that in 2016 surgeons in South Korea carried out the most cosmetic surgical procedures per capita: 20 per 1,000 people. V-shaped chins, with minimal jaw or cheekbone, round skulls, lifted lip corners, petite lips and slight puffiness under the eyes have been popular surgeries in South Korea, but recently the demand for such procedures has decreased while simpler and less invasive surgeries have increased. The Society also reported that labiaplasty showed the biggest (45%) increase since 2015. Lower body lift procedures increased by 29%, while upper body lift, breast augmentation using fat transfer, and buttock lifts increased by some 20%.

Such examples suggest that body enhancements, using a range of techniques, have been practiced in many cultures throughout the world for millennia. Thus, it seems reasonable to assume that in the absence of stringent regulation CRISPR will be perceived by some as just another enhancement technique.
 
Takeaways

The discovery of CRISPR Cas9 has revolutionized the way we think about developing therapies for the world’s deadliest diseases. This powerful technology has significant advantages over traditional medical technologies; it is cheap, easy-to-use and accessible, and these factors have helped to drive CRISPR’s global acceptance and use as a tool for new and innovative therapies. Over the past three years CRISPR R&D and clinical studies have developed at a pace and bring huge promise and significant hope to millions of people living with conditions with high rates of morbidity and mortality. Notwithstanding, bioethicists warn that with the absence of stringent universally agreed regulation, all these advantages could easily pivot into significant disadvantages and lead to parents enhancing the genetic composition of their children to make them taller, more intelligent etc. This could be a small step away from reigniting the ‘Charles Galton movement’. Galton was an English scholar and cousin of Charles Darwin. He lived during the Victorian era and died in 1911. Among other things, Galton studied anthropology and sociology and suggested that the elevated social position and heightened intelligence of the English upper classes and the criminality and lack of intelligence of the English under classes were all inherited traits and the result of superior and inferior genetic make-up respectively. According to Galton societies could be improved by selective breeding. Bioethicists are concerned that CRISPR technologies could be used for a 21st century version of Galtonism.
 
The genie is truly out of the bottle.
view in full page
  • ‘Base editing’ is a more efficient version of CRISPR Cas-9 technology
  • CRISPR Cas-9 is a ground-breaking gene editing technology that was discovered in 2012
  • CRISPR Cas-9 operates like molecular scissors to cut and remove mutant strands of DNA and creates space for functioning genes to be inserted
  • CRISPR technologies raise hope for new therapies to replace traditional medicines and provide a one-time procedure to cure devastating inherited disorders that have no cure or few treatment options
  • Recent studies suggest that CRISPR Cas-9 is not as accurate as initially thought and can introduce thousands of unintended ‘off-target’ mutations into the genome
  • Base editing significantly reduces ‘off-target’ mutations because it does not cut the DNA but uses a chemical process to convert just one letter (base) of DNA into another
  • 66% of genetic illnesses involve mutations where there is a change in a single letter of DNA
  • A significant challenge for base editing is in the delivery of the technique
 
Base-editing next-generation genome editor with delivery challenges

Since the first human genome was sequenced in 2003 there has been a revolution in human genomics, which has transformed the way we think about diseases and their causes and has paved the way for the development of therapies that target both the illness and the patient. It has also led to the introduction of the genome-editing tool CRISPR Cas-9 in 2012. This transformed gene editing from a devilishly difficult task to an easy and inexpensive “day-to-day” laboratory technology, which allows scientists to cut-out and change sections of DNA at specific sites in an organism or cell. CRISPR technology revolutionized genetic research and raised hope that it could provide a powerful therapeutic tool for millions of people living with inherited debilitating diseases for which there are either no cures or few treatment options. Recently, next-generation gene-editing technologies have been developed, which have reignited the hope that gene therapies could eventually replace traditional medicines and be used by physicians in clinics as a one-time procedure to cure some of the most devastating inherited disorders. Notwithstanding, scientists have cautioned that the therapeutic use of CRISPR technologies have significant technical, safety, regulatory, ethical and delivery obstacles to overcome before they can be used as therapies.
 
In this Commentary
 
This Commentary describes a new and expanded gene editing technology called base editing or chemical surgery, which compliments CRISPR Cas-9, but instead of cutting strands of DNA it provides a more accurate and predictable means to rewrite single letters (bases) of DNA and RNA. This enables scientists to make more targeted and precise alterations to DNA and RNA with less unintended consequences, referred to as “off-target” effects.  Base editing has significant therapeutic potential for thousands of human disorders known to be caused by a single genetic error and range from sickle-cell anaemia to metabolic disorders to cystic fibrosis, which currently lack options. The new base editing techniques are described in three research papers, which appeared in scientific journals in late 2017. One was published in the November 2017 edition of the journal ‘Protein and Cell’, another in the October 2017 edition of the ‘Nature’ and a third in the October 2017 edition of the journal ‘Science’. Research reported in these papers represents an important advance in our ability to alter single letters (bases) in peoples’ DNA and RNA. Notwithstanding, scientists caution that before base editing techniques become standard clinical practice the technology will require more research, extensive clinical studies and significant advances in delivery methods.
 
CRISPR and intellectual property battles

Base editing is a development of CRISPR Cas-9 technology, which was developed by a group of researchers from University College Berkeley, the Max-Plank Institute, Harvard University and The Massachusetts Institute of Technology (MIT) and others. The Broad Institute, a non-profit disease research facility established jointly by Harvard University and MIT, obtained the basic US patents on CRISPR Cas-9 in February 2017 after a heated patent dispute between two of the technology’s originators. On one side Jennifer Doudna of University College Berkeley and Emmanuelle Charpentier of the Max-Planck Institute in Berlin. On the other side Feng Zhang of the Broad Institute. While the Broad Institute has been considered the winning party in the US, the European intellectual property landscape is a different story.  Due to technical errors associated with listed CRISPR inventions and claimed priority dates, the European patents filed by the Broad Institute have been revoked

The Broad Institute is expected to appeal the decision and the gene-editing intellectual property battles continue. Notwithstanding, this has not slowed the development and commercialization of the technology.
 
Technologies to edit the genetic code and some ethical challenges

CRISPR Cas-9, discovered in 2012, is a particularly versatile and inexpensive gene editing technology. Since its discovery it has been used extensively by scientists throughout the world in an attempt to further their understanding of the role played by genes in disease. The technology works by slicing through the two strands of bases that spiral to create DNA’s famous double-helix and is especially useful when the goal is to insert or delete DNA bases. CRISPR acts like a genetic GSP: a guide molecule made of RNA that allows a specific site of interest on the DNA double helix to be targeted. The RNA molecule is attached to a bacterial enzyme called Cas-9 that works like a pair of “molecular scissors”, which can cut out strands of DNA at an exact point. This allows scientists to target and remove faulty genetic material and create space for functioning genes to be inserted in a similar way a word processor allows you to correct and enhance documents. Although CRISPR Cas-9 is increasingly being used in studies of genetic disorders, it has been challenging for the technology to fix a point mutation, caused by a change in a single DNA letter in a given gene. Further the technology’s cutting mechanism can result in “off-target” activity, which either can make changes to a gene you do not want changed or fail to change a gene that you do. This represents a significant challenge for scientists, and a major concern for the technology’s therapeutic applications.

For example, research published in the July 2018 edition of  the journal Nature Biotechnology discovered unintended deletions of thousands of DNA bases, including at spots far from the edit. Another study reported in the May 2017 edition the journal Nature Methods found that CRISPR Cas-9 introduced hundreds of unintended mutations into the genome. And a third study published in December 2017 in the Proceedings of the US National Academy of Sciences suggested that genetic variation between patients may affect the efficacy and safety of CRISPR-based treatments enough to warrant custom treatments. In addition to these technical concerns, ethical concerns about the technique also have been raised. In the March 2015 edition of the journal Nature, Michael Werner, the executive director of the Washington DC based Alliance for Regenerative Medicine suggested that ethical and safety issues should put germline editing research (a process by which every cell in the human body could be altered in such a way that the change is heritable) off limits because, “It’s still a little premature to say that we’ve resolved all these safety issues now,” says Werner. Notwithstanding, in July 2018 the UK’s Nuffield Council on Bioethics suggested that germline editing is “morally permissibly” under certain circumstances.
 
CRISPR triggers intense commercial activity

Despite safety and ethical concerns about CRISPR, genome editing has rapidly become a large fast-growing global market. In late 2012, Charpentier  suggested to a few colleagues, including Doudna, Zhang and George Church, professor of genetics at Harvard University Medical School who is credited with developing the first direct genomic sequencing method in 1984, that they should start a company to accelerate the gene editing technology into clinics.  They did not, but later the same scientists and others started separate genome editing companies. Four have become publicly traded companies and have successfully raised billions. For example, in 2013 Charpentier founded Crispr TherapeuticsBased in Switzerland, the company has become a US$2bn Nasdaq traded company. The other three, all based in the US are: Editas Medicine, which has a market cap of US$1.3bn and was founded by Zhang, Church and David Liu, Professor of Chemistry at Harvard University, a core member of the Broad Institute, and the first to describe base editing in research published in the May 2016 edition of the journal NatureDoudna is  a founding member of Intellia Therapeutics, which today has a market cap of US$1bn,  and Juno Therapeutics, which has a market cap of US$10bn was founded in 2013 through a collaboration of the Fred Hutchinson Cancer Research CenterMemorial Sloan-Kettering Cancer Center and the Seattle Children’s Research Institute.

Since their inceptions, big pharma companies have been competing to invest in them. In January 2018 Celgene, which already owned 9.7% of Juno agreed to acquire the rest of its stock for US$9bn in cash in order to gain access to Juno's pipeline of CAR-T cancer drugs. This technology entails extracting blood cells from patients, then using CRISPR to edit T cells (immune cells) outside the body - ex vivo gene therapy - in order to transform the cells into enhanced cancer fighters before reintroducing them back into the patient’s blood stream. Earlier Bayer, a German pharmaceutical company, acquired a US$35m equity stake in Crispr Therapeutics, which it increased in January 2018. In 2016 Bayer invested US$335m over 5-years in a joint venture with Crispr Therapeutics called Casebia, with the intention to discover, develop and commercialize new breakthrough therapeutics to cure blood disorders, blindness, and congenital heart disease. Casebia also expects to develop new delivery mechanisms for CRISPR technologies, which will be critical to future drugs meant to target cells in the human body. Crispr Therapeutics retains a 50% interest in the joint venture, and also gains access to Bayer’s state-of-the-art delivery technologies and protein engineering knowhow.
According to market analysis the global genome editing market is expected to grow at a CAGR of 14.5% to reach US$6.3bn by 2022. Market drivers include rising government funding and the growth in the number of genomic projects, high and increasing prevalence of debilitating and often fatal diseases, technological advancements, increasing production of genetically modified crops, and growing application areas of genomics.
You might also like:

CRISPR positioned to eliminate human papilloma viruses that cause cervical cancer


Tens of thousands of devastating diseases are the result of a single minute error in one letter the human genome
 
While big pharma competes to commercialize CRISPR Cas-9 technologies, scientists compete to develop ever-more versatile and efficient versions of the technology. One result of the competition among scientists is “base editing”, which is predicated upon the same basic mechanism as the standard CRISPR technology but differs because it does not require the DNA to be physically cut. Instead, base editing uses a chemical process to directly convert a single base (letter) of DNA to another without deleting and inserting random bases in the process.  Think of base editing as similar to changing one letter in a vast WORD document. The technique allows scientists to edit the body’s genes one letter at a time with exquisite precision.  Base editing rewrites single errors in the genetic code instead of cutting and replacing whole strands of DNA. The technique is not a replacement for CRISPR, but a complementary technology for altering the genome in an attempt to correct disease. Converting one letter to another may not sound significant until you consider that there are billions of letters in the human genome, and tens of thousands of diseases can be traced to a single minute error in just one letter in the human genome. Indeed, of more than 50,000 genetic changes currently known to be associated with disease in humans, 32,000 are caused by the simple substitution of one base letter for another. Base editing is significantly more efficient than standard CRISPR systems at making single base substitutions.
 
DNA molecules as a sequence of letters

Your genes are an instruction manual for your body. Hidden inside every cell in your body is a chemical called DNA. Genes are short sections of DNA, which are the biological templates your body uses to make the structural proteins and enzymes needed to build and maintain your tissues and organs. Genes influence how you look on the outside and how you function on the inside. The DNA that makes up all genomes is composed of four related chemicals called nucleic acids: (i) adenine ‘A’, (ii) guanine ’G’, (iii) cytosine ‘C’, and (iv) thymine ‘T’.  A sequence of DNA is a string of these nucleic acids (also called “bases” or “base pairs”). These bases connect in a specific way: ‘A’ always pairs with ‘T’, and ‘C’ always pairs with ‘G’. The letters represent the “alphabet” scientists use to write genetic code. The principal biological function of a base is to bond nucleic acids together. Nucleic acids are complex organic substances present in living cells, especially DNA or RNA. There are some 24,000 genes in the human genome, which are bundled into 23 pairs of chromosomes all coiled up in the nucleus of every one of your cells. There are about 37trn cells in the human body. Only about 1.5% of your genetic code, or genome, is made up of your genes. Another 10% regulates your genes to ensure that they turn on and off in the right cells at the right time.
 
The November 2017 Protein and Cell study

In the April 2015 edition of the journal Protein and Cell, scientists led by Junjiu Huang from Sun Yat-sen University in Guangzhou, China, reported research where he and his colleagues used CRISPR Cas-9 to correct abnormal β-thalassemia genes in human embryos without much success. Researchers suggested, “our work highlights the pressing need to further improve the fidelity and specificity of the CRISPR Cas-9 platform, a prerequisite for any clinical applications of CRISPR Cas-9-mediated editing”. In the November 2017 edition of Protein and Cell Huang and colleagues demonstrated that they had enhanced the fidelity of CRISPR and used the new base editing technique for the first time in human embryos to repair a faulty gene that gives rise to β-thalassemia. They suggested that, “their study demonstrated the feasibility of curing genetic disease in human somatic cells and embryos by a base editor system”.
 

Β-thalassemia

Β-thalassemia is a serious blood disorder, common in China and southeast Asia, which can be caused by a single mutation in the DNA code. The disorder reduces the production of haemoglobin, which is an iron-containing protein in red blood cells that carries oxygen to cells throughout the body. Without treatment, patients with a severe type of β-thalassemia, usually die before age 5. Correcting this mutation in human embryos may cure people with the disorder and also prevent the disease being passed on to future generations.

Innovative approach

Humans carry two copies of every gene, and in many cases both versions have to be “healthy” to avoid disease. Because it is challenging for researchers to find a lot of embryos, which all have a rare double mutation, Huang’s team created a batch of cloned embryos, then took skin cells from patients with β-thalassemia, removed their DNA-containing nuclei, and introduced them into donor eggs that had their own nuclei removed. The eggs then developed into early stage embryos, which carried the β-thalassemia mutation. Despite the study’s success to effectively edit the embryos and repair the mutations it was only about 20% efficient. Huang noted that the base editing technique he and his colleagues used was not uniform across all cells in the embryos, and their endeavours only sometimes repaired one faulty gene instead of 2. This created what is called “mosaic embryos”, which have both normal and mutant cells and result in a patchwork of cells with different genetic make-up and is potentially dangerous. 

Huang concluded that more research is required to improve the safety of the study’s base editing approach. Notwithstanding, scientists believe Huang’s research represents a significant advance, and that base editing techniques hold out the potential to treat and prevent a number of serious and debilitating inherited human diseases, which are more common than some people realise. For example, 1 in 25 children are born with some genetic disorder, which includes β-thalassemia, cystic fibrosis, genetic blindness, sickle cell anaemia, muscular dystrophy, and Tay-Sachs disease.

 
The October 2017 Nature study

In October 2017, David Liu, and colleagues from the Broad Institute published a paper describing their latest and improved base editing research in the journal Nature. Liu's group genetically transformed base pairs at a target position in the genome of living cells with more than 50% efficiency, with virtually no detectable ‘off-target’ effects such as random insertions, deletions, translocations, or other base-to-base conversions. The work of Liu and his team is significant because it, “introduced point mutations more efficiently and cleanly, and with less off-target genome modification than a current Cas-9 nuclease-based method, and can install disease-correcting or disease-suppressing mutations in human cells”. This clears the path for scientists to use base editing to address many more single-letter mutations than was previously possible. “What we’ve developed is a base editor, a molecular machine, that is a programmable, irreversible, efficient, and an extremely clean way to correct mutations in the genome of living cells,” says Liu.
 
Delivery is the challenge

Notwithstanding, Liu suggests that the status of base editing is like Amazon without UPS, its principal delivery agent, “Creating a machine that makes the genetic change you need to treat a disease is an important step forward, but it’s only one part of what’s needed to treat a patient. We still have to deliver that machine”, says Liu, and further, “We have to test its safety, we have to assess its beneficial effects in animals and patients and weigh them against any side-effects. We need to do many more things. But having the machine is a good start.” Liu is hopeful that base editing of DNA and RNA could be used as complementary approaches for a “broad set of potential therapeutic applications.” He and his colleagues are exploring base editing to fix blood and neurological disorders as well as hereditary deafness and blindness.
 
The October 2017 Science study and the advantages of editing RNA
 
In a paper published in the October 2017 edition of the journal Science, Feng Zhang, of the Broad Institute who is one of the original architects of CRISPR, and senior author describes a variant of base editing, which acts on RNA in human cells instead of DNA. RNA acts as a temporary genetic messenger within cells and naturally degrades in the body. This means that editing RNA instead of DNA does not result in a permanent change to a person’s genome, and therefore has significant potential as a tool for both research and disease treatment. Zhang’s base editing technique makes a temporary correction of a disease-causing mutation without permanent alteration to the genome. According to Zhang, editing DNA is, “permanent and very difficult to reverse, which poses a safety concern, while editing RNA is not.” Zhang’s approach is a potentially safer option when it comes to gene-fixing therapeutics, although any treatment using the technique would need to be administered repeatedly. But Zhang believes repetition could be an advantage because it allows for a therapy to be “upgraded” as scientific knowledge increases and provides a better understanding of specific disease states. The system can change single RNA nucleotides in mammalian cells in a programmable and precise fashion and has the ability to reverse disease-causing mutations at the RNA level, as well as other potential therapeutic and basic science applications.
 
Zhang and colleagues made one RNA-editing enzyme into a programmable gene-editing tool. “There are 12 possible base changes you can do,” says Omar Abudayyeh, a researcher at the Broad Institute and one of the paper’s authors. Having edited one, “we’re now thinking about the ways to do the other eleven.” By operating on RNA, Zhang and his colleagues avoid ‘off-target’ effects. “With RNA, you have to think about ‘off-targets’ a little differently.” says Abudayyeh. “If some of the RNA gets edited incorrectly the cell will have at least some amount of the right protein. If things go really wrong, the edit is reversible. You can always remove the system and the RNA will eventually degrade and recycle and revert back to normal,” says Abudayyeh. Liu and his team call their new creation REPAIR. They tested it on human cells growing in dishes and edited up to about 27% of the RNAs of two genes. The researchers did not find any ’off-target’ effects and suggest, “REPAIR presents a promising RNA editing platform with broad applicability for research, therapeutics, and biotechnology.”
 
Delivery challenges

Liu and other medical researchers have stressed the significant challenges associated with delivering CRISPR technologies, which have yet to be resolved before gene editing techniques become viable therapies. The conundrum researchers face is that your body’s biological barriers, which protect you from diseases are the same barriers that create significant obstacles for the delivery of genetic editors. Let us explain. Your DNA is like Fort Knox gold in that it is extremely well protected. For a harmful agent to access your DNA it first has to get under your skin and into your bloodstream. It then has to travel through your bloodstream without being detected by your immune system, which is comprised of networks of cells, tissues, and organs that work together to protect your body. One of the important cells involved in your immune system are white blood cells, also called leukocytes, which come in two basic types that combine to seek out and destroy disease-causing agents. Assuming the harmful agent successfully gets past all these biological barriers, it then has to penetrate your cell membrane and find a way to the nucleus of the cell. These biological defences help to keep you healthy by preventing harmful agents penetrating and transforming your cells into disease-making entities. But, they are the same obstacles that prevent scientists getting gene editors to the right place at the right time in the right quantity. Although delivery technologies are improving, Crispr Therapeutics, Editas Medicine, and Intellia Therapeutics, as well as, Casebia are all investing in delivery mechanisms, which remain significant challenges to overcome before gene editing becomes a regular therapy.  This is not only a concern for private companies, but also for the public sector. In January 2018 the US National Institutes of Health announced it will be awarding US$190m in research grants over the next six years, in part to “remove barriers that slow the adoption of genome editing for treating patients”.
 
Takeaways

Researchers have made substantial scientific advances in embryo gene editing technologies, which have significant potential for next-generation therapeutics. Base editing, described in this Commentary, is one advance, which has the potential to provide effective therapies for a range of disorders known to be caused by the mutation of a single letter in a gene, which currently have either little or no means of a cure. This is important because about 66% of genetic illnesses in humans involve mutations where there is a change in a single letter (or base). Notwithstanding, before such technologies become regular therapies in clinics there are major technical challenges, which need to be overcome in the delivery mechanism for these gene editors.
view in full page
  • China will not challenge the economic supremacy of the US in the near to medium term
  • But with a GDP of US$14trn growing at 6.9% a year China is a substantial economy and a significant trading partner of the US
  • China is replacing imported high-tech products with domestic ones and incentivizing Chinese companies to dominate high value global industries
  • China’s large and increasing supply of appropriately qualified human capital gives it a competitive edge
  • Beijing’s US$8trn-30-year Belt and Road (B&R) strategy aims to make China the centre of a new world order in which knowledge-based Chinese companies dominate high-value global markets
  • China is challenged by substantial debt and significant credit it has extended to economically weak nations
  • Notwithstanding, Western companies seeking growth outside their current wealthy markets need to develop constructive trading relationships with China
  • Lack of understanding and cultural differences are barriers to productive West-East trading relations
 
Can Western companies engage with and benefit from China?
 
Previously we described how Beijing had offered Western companies a ‘poisoned challis’: either localize your value chain and help China achieve its goals to dominate key industries globally or be progressively squeezed out of markets. Washington responded by levying punitive tariffs on products manufactured in China and marketed in the US in an attempt to force Beijing to change. China hit back, cross fire ensued, more US tariffs were levied, markets became nervous and a ‘flight for liquidity’ seems a possibility. This is when equity players become nervous about uncertainties in markets and move their investments into more liquid securities in order to increase their ability to sell their positions at a moment’s notice. To some observers the current trade conflict between the world’s two largest trading nations must seem like Stanley Kramer’s 1952 epic ‘High Noon” movie. The difference being the 2018 showdown could affect the lives of billions and threaten the global economy. The fact that the world can be brought to such a position in such a short time is partly due to a profound lack of understanding and cultural differences between Washington and Beijing and vice versa. The differences manifest themselves as: (i) competition versus harmony, (ii) short-termism versus long-termism, (iii) tactics versus strategy and (iv) nationalism versus globalism. These differences pervade organizations, institutions and mindsets in the respective regions.
 
In this Commentary

This Commentary is divided it into 3 parts.
  • Part 1: China’s penetration of emerging markets discusses the implications of China’s stated aim to become a major global high-end, knowledge-based economy and describes how, for the past three decades, the nation has been preparing for this by systematically upgrading its human capital. From a perceived position of strength Beijing suggested to Western companies seeking or increasing their franchises in China that unless they are prepared to localize their value chains, not only will they be squeezed out of the China market, but they will also encounter challenges in other large emerging markets as China’s presence and influence in these markets increase. This is significant because the world’s emerging economies are the growth frontiers of many high-tech industries. 
  • Part 2: China’s economic rise and its strategic objectives briefly describes China’s phenomenal transformation from a centrally managed economy to the world’s second largest economic power and a significant commercial partner of the US. We provide glimpses of some aspects of China’s recent history in order to convey the scale of its industrial reforms and its well-resourced, central government-backed long-term strategies to establish China as a world leader in knowledge-based high-value industries. We describe China’s planned slowdown of its economy and how Beijing is systematically upgrading its human capital. Indicative of China’s increasing trading prowess are its new technology companies. We describe three, which are likely to have a significant global impact in the next 5 years. We conclude part 2 with a description of the Pearl River Delta, China’s high tech production hub, in order to provide further insights into China’s achievements, the nature and scale of its projects to upgrade its economy and the thinking that drives China’s economic transformation. 
  • Part 3: China’s ‘Belts and Road’ (B&R) initiative. B&R is a bold neo colonialistinitiative to build a 21st century ‘Silk Road’ of infrastructure and trade-links between China and Eurasia. This is expected to stimulate trade, economic growth and domestic employment in some of the least developed regions of the world, which have suffered from post-colonial decline and are neglected by the West. Beijing expects that the B&R project will position China at the centre of a newly formed global trading network. We review some of the concerns raised by the R&D initiative including China's increasing exposure as a principal creditor to economically weak nations. This, together with China's mounting debt, presents Western companies with a dilemma: China is too big to be ignored but its structural weaknesses could be damaging.   

 

Part 1
 
 China’s penetration of emerging markets
 
 
Made in China 2025 (MIC25) incentivizes Chinese enterprises to develop their competences and capacities in order to respond to the pivotal needs of global customers to reduce costs while maintaining value by providing affordable quality product offerings.  It also encourages Chinese companies to become ‘global champions’ and help China establish itself as a dominant international force in knowledge-based technologies of the future. As a result, Chinese companies are successfully taking share of key segments in emerging markets. So, Beijing’s industrial strategies not only increase the challenges for Western companies in China, but also provide potential barriers for them to penetrate and increase their franchises in other large emerging markets such India and Brazil, which are the future growth frontiers.
 
China’s investment in human capital

Beijing’s well-resourced strategies to transition China from a manufacturing-based economy to a high-end, innovation-driven, knowledge-based economy could not be achieved without a significant supply of relevant human capital. It is instructive that for the past three decades China has been systematically upgrading its human capital, while Western nations have not been doing so at a similar pace.
 
According to the World Economic ForumChina has committed massive resources to education and training. In 2016 China was building the equivalent of one university a week and graduated 4.7m citizens, while in the US 568,000 students graduated. In 2017, there were 2,914 colleges and universities in China with over 20m students. The US had 4,140 with over 17m students enrolled. Significantly, between 2002 and 2014 the number of students graduating in science and engineering in China quadrupled. In 2013, 40% of all Chinese graduates completed a degree in science, technology, engineering or mathematics (STEM), whilst in the US only 20% of its graduates did so. In addition to China producing more STEM graduates than either the US or Europe, which are vital for high-tech knowledge-based industries of the future, the gap between the top Chinese and US and European graduates is widening. Projections suggest that by 2030 the number of 25 to 34-year-old graduates in China will increase by a further 300%, compared with an expected rise of around 30% in the US and Europe. This represents a substantial shift in the world's population of graduates, which was once dominated by the US, and gives China a potential competitive edge in high-tech growth industries of the future.
 
Further, US students struggle to afford university fees. Many American colleges and universities are struggling financially and as a consequence actively recruiting foreign students. In recent years, the number of Chinese students admitted to US universities has increased significantly. In 2017 for instance, some 350,000 Chinese students were recruited. Most graduates return to China with quality degrees. European countries have put a brake on expanding their universities by either not making public investments in them or restricting universities to raise money themselves.
 
Shanghai students are world’s best in maths, reading and science

Supporting this competitive edge is China’s world-beating performance of its 15 and 16-year-olds. According to an internationally recognised test, Shanghai school children are the best in the world at mathematics, reading and science. Every three years 0.5m students aged 15 and 16 from 72 countries representing 80% of the global economy sit a 2-hour examination to assess their comparative abilities in these three subjects. The examination, called the Program for International Student Assessment (PISA), is administered and published triennially by the Organisation for Economic Co-operation and Development (OECD). When the 2009 and 2012 PISA  scores were released they created a sensation, suggesting that students in Shanghai have significantly better mathematics, reading and science capabilities than comparable students in any other country.  Although these scores have been contested, and the most recent test scores suggest Shanghai students have slipped down the rankings, in the 2012 tests Shanghai students performed so well in mathematics that the report compared their scores to the equivalent of nearly three years of schooling above most countries.
 

Human capital strategies challenged by aging populations
Human capital strategies in China, the US and Western Europe are all challenged by aging populations. According to the United Nations, China’s population is ageing more rapidly than any country in recent history. America’s 65-and-over population is projected to nearly double over the next three decades, rising from 48m to 88m by 2050. The UK’s population also is getting older with 18% aged 65-and-over and 2.4% aged 85-and-over. In 2014, 20% of Western Europeans were 65 years or older and by 2030 25% will be that age demographic.
 
Taking share of high-value MedTech markets
 
Many Western MedTech companies are late-bloomers in emerging markets. This can partly be explained by the two decades of economic growth the industry experienced from developed markets and the continued buoyancy of the US stock market.  Thus, Western MedTech companies have felt little pressure to adjust their strategies and business models and venture into territories committed to “affordable (low priced) medical devices”. Beijing seems determined to take advantage of this and Chinese companies are increasing their share of large fast growing and underserved emerging markets by: (i) increasing their innovative go-to-market strategies and (ii) making sure they “localize” their product offerings. We briefly describe these two strategies.
 
Innovative go-to-market approaches

According to OEDC data, between 2000 and 2016 China doubled its R&D investment to 2% of GDP, which is more than the EU but less than America. In 2016, the US spent 2.7% of its GDP on R&D, which is more than any country. Individual Chinese domestic companies are also increasing their investments in R&D as part of their growth strategies. For instance, over the past decade, Mindray, China’s largest MedTech company has spent more than 10% of its annual revenues - currently US$1.7bn - on R&D. The company has a large R&D team of over 1,400 located in 2 centres: 1 in Mahwah, China and another in Seattle, USA. BGI, China’s largest manufacturer of next-generation gene-sequencing equipment, devotes more than 33% of its revenues to R&D, double that of its US competitor Illumina. In aggregate, however, Chinese companies are a long way behind their Western counterparts when it comes to R&D spending.
 

Supercomputers
High-tech companies require supercomputers to assist with their R&D and innovative strategies. These are powerful and sophisticated machines with enormous processing power, which can support medical and scientific R&D. According to an internationally recognised ranking, which has been conducted biannually by leading scientists since 1993, China leads the world with its installed-base of supercomputers. China has 206 and  America has 124. In 2000 China had none. The most recent rankings show that the US has regained the top performance position from China with an IBM-system-backed supercomputer now running at the US Department of Energy’s Oak Ridge National Laboratory. 
 

Increasing number of Chinese patents
Although the US maintains a lead in scientific breakthroughs and their industrial applications, innovation is increasing in China. The number of invention patent applications received by China in 2016 was 1.3m, which was more than the combined total from the US (605,571), Japan (318,381), South Korea (208,830), and the EU (159,358). Patents from these five countries accounted for 84% of the world total in 2016. 
 

Increasing share of high-tech markets
Emboldened by enhanced processing power, increased patents, greater R&D capacity and improved capabilities, Chinese MedTech companies are increasingly represented across a broad spectrum of high-end medical technologies and have made significant inroads into emerging markets. Some manufacture Class III product offerings such as orthopaedic implants and are beginning to compete in medium-level technology markets in Brazil, India, Japan and the UK. For instance, SHINVA markets its linear accelerators globally. Sinocare is #6 in the global market for blood glucose monitoring devices. In 2008 Mindray paid US$200m to acquire the patient monitoring business of US company Datascope, making it the third-largest player by sales in the global market for such devices. Also, Mindray has increased its share of the ultrasound imaging market to 10%, behind GE and Phillips. MicroPort broke onto the world stage in early 2014 when it acquired Wright Medical’s orthopaedic implant business for US$290m. In 2015 China overtook Germany to become Japan’s second largest supplier of MRI devices, behind the US, and Biosensors International is among the largest suppliers of drug-eluting stents in France, Germany, Italy, Spain and the UK.
 
Localized product offerings in India
 
Mindray, which positions itself as a world-class MedTech solutions company, has established a significant presence in India where it has built local operations, tailored its line of affordable high-quality patient monitoring, ultrasound and in vitro diagnostic devices to address India’s unmet needs, hired local engineers and operators and built a local marketing and sales team, which provides a 24-7 customer service. Mindray has understood that many of the factors, which drive China’s MedTech market growth are mirrored in India and other rapidly growing emerging markets that share a similarly high disease burden, aging demographics and a desire to reduce healthcare costs.
 
Mindray was one of China’s earliest MedTech companies to list in New York in 2006. However, the company felt its shares were undervalued and privatized in 2016 in a deal, which valued the company at US$3.3bn. A funding round shortly after its delisting valued Mindray at US$8.5bn. The company employs over 8,000 and its 2017 revenues were US$1.7bn.
 
India’s MedTech market
 
The attraction of India to MedTech companies is easy to understand. India’s MedTech market is the 5th largest in the world and could rival that of Japan and Germany in size by 2022 if it continues its 17% annual growth. Although India mainly has been an out-of-pocket healthcare market this is changing. In September 2018, the Indian government launched one of the world’s largest publicly funded health insurance schemes, which will provide some 0.5bn poor people with health cover of US$7,000 per year (a sizable sum in India) for free treatment of serious ailments. India’s medical device markets, like those of China’s, will benefit from this, but also from the country’s large and growing middle class with relatively high disposable incomes in an economy growing at around 7 to 7.5% annually.
 
In 2016 India’s middle class was estimated to be 267m - 83% of the total population of the US - and projected to increase to 547m by 2025. Further, India has a large and growing incidence of lifetime chronic diseases, which expands the need for medical devices. Between 2009 and 2016, China emerged as India’s 3rd largest supplier of medical devices (behind the US and Germany) and is currently India’s leading provider of CT scanners, representing 50% of the US$69m that India spent on imports of these high-tech devices during 2016. India’s orthopaedic devices market is estimated to be around US$375m and is projected to grow at about 20% each year for the next decade to reach US$2.5bn by 2030. In contrast the global orthopaedics industry is estimated to grow at 5% annually.

China is positioned to increase its share of MedTech markets in India and other emerging countries. This suggests that unless Western companies are prepared to transform their strategies and change their business models similar to what Medtronic and GE Healthcare have done, they will not only be squeezed out of the China market but shall encounter challenges to penetrate and increase their franchises in other large emerging MedTech markets. This is significant because the world’s emerging economies are the growth frontiers of the MedTech industry.



Part 2

China’s economic rise and strategic objectives: background

 
How long can China sustain its rise?”. We broach this question in the next two parts of this Commentary. Here in Part 2, we describe some relevant aspects of China’s recent commercial history, its success in producing high tech global companies and we also provide a glimpse of its urban communities for creating and developing companies of the future.

It was not until the early 1980s, after the death of Mao Zedong in 1976, that China started to dismantle its centrally planned economy and began implementing its free market reforms and opened its economy to foreign trade and investment. Shortly afterwards China: (i) became the world’s fastest growing market-based economy with real annual GDP growth averaging 9.5% through 2017, (ii) lifted 800m citizens out of poverty and (iii) overtook Japan to become the world's second largest economy. By 2010 China had become a significant commercial partner of the US and is now America’s largest merchandise trading partner, its biggest source of imports and America’s third largest export market. Also, China holds US$1.7trn of US Treasury securities, which help fund the federal debt and keep US interest rates low. It is worth noting that China has a long history dating back more than 2,000 years BC. In more recent times, Adam Smith the father of modern capitalism, described China in The Wealth of Nations (1776) as a country which is, “one of the most fertile, best cultivated, most industrious, most prosperous and most urbanized countries in the world”.

 
Avoiding a middle-income trap
 
Over the past decade China’s economy has matured and Beijing has managed a planned slowdown of its growth rate to what it calls the “new-normal”. In 2017 China’s GDP was 6.9% and is projected to fall to 5.6% by 2022. The orchestrated slowdown is less based on fixed investment and exports and more on private consumption of China’s large and growing middle class, enhanced services and innovation. A previous Commentary described Beijing’s Made in China 2025 (MIC25) initiative and other policies, which prioritised innovation and the systematic upgrading of its domestic industries whilst decreasing its reliance on foreign technology. This is essential for China to avoid a ‘middle income trap’, which happens when nations achieve a certain level of economic growth, but then begin to experience diminishing returns because they are unable to restructure their economies to embrace new sources of growth.
 
Baidu, Alibaba and Tencent: BAT

An example of China’s ability to upgrade its economy and avoid a middle-income trap is its new technology companies, which are positioned to have significant global roles in the next five years. We briefly describe three: Baidu, Alibaba and Tencent: collectively referred to as BAT. Baidu, is a Chinese language Internet search provider incorporated in 2000, which has grown to  become the world’s 8th largest internet company by revenue. It has a market cap of US$80bn, annual revenues US$13bn and has the world’s largest Internet user population of about 800m. Alibaba, was founded in 2000 as a business-to-business (B2B) portal connecting Chinese manufacturers to overseas buyers. Today, the company is a multinational conglomerate with a market cap in excess of US$500bn and annual revenues of US$13bn. It is the world’s largest e-commerce company in terms of gross merchandise volume (GMV). For the fiscal year ended March 31, 2017, Alibaba had a GMV of US$0.43trn and 454m annual active buyers on its marketplaces. Alibaba’s long-term vision is to become a global company providing solutions to real world problems and using e-commerce to help globalization by making trade more inclusive. The company expects GMV to reach US$1trn by 2020, and to serve 2bn consumers(one-third of the world’s total population)and to support the profitable operation of 10m businesses on its platforms by 2036. Alibaba is sometimes referred to as the "Amazon of China," but the company’s founder Jack Ma suggests there are differences. "Amazon is more like an empire: everything they control themselves. Our philosophy is be an ecosystem”, says Ma. Tencentfounded in 1998, has become a multinational investment holding corporation with a market cap of US$556bn, annual revenues of US$22bn and specializes in various internet-related services, entertainment, AI and technology.  
 
The Pearl River Delta
 
Tencent has its HQs in Shenzhen, a megacity in the Pearl River Delta, which is China’s hub for high tech production. We briefly describe the delta to further show the progress China has made in transforming its economy. In the early 1980s the Pearl River Delta was primarily an agricultural area and Shenzhen was an unassuming town of about 30,000 (now 13m). The delta witnessed the most rapid urban expansion in human history to become the world’s largest urban area in both size and population by 2015, with more inhabitants than Argentina, Australia or Canada. Today the Pearl River Delta has a population of 120m and a GDP of US$1.5trn - growing at 12% per year - which is greater than that of Indonesia and equal to 9.1% of China’s output.
 
Land, sea and air infrastructure serving the delta is state of the art. For example, the delta has six airports; three of which are international air hubs. In 2016, the passenger traffic of Baiyun Airport in Guangzhou (population 15m) surpassed 60m and the volume of freight it handled was over 2m tonnes. In the same year passenger traffic at Shenzhen (population 13m) airport was in excess of 42m and the volume of freight it handled was over 1m tonnes.  This compares favourably with JFK and Newark Liberty airports. In 2017 both airports set records with more than 59m and 43m passengers respectively
.

Part of the delta’s infrastructure is the new Hong Kong-Zhuhai-Macau Bridge, which spans 34 miles (55klm), crosses the waters of the Pearl River and connects Hong Kong with Macao. It is the longest sea-crossing bridge ever built and has a section that runs for seven kilometres in a submarine tunnel that passes four artificial islands. Its construction cost US$16bn, which is part of a US$30bn plan announced in 2009 to develop an infrastructure network to connect the nine cities in the delta so that collectively they would become the largest contiguous urban region in the world, which was achieved in 2015.  One of the infrastructure goals is to reduce travel time between the nine cities and Hong Kong and Macao to one hour from any which way.
 
The Pearl River Delta is the most southern of three major Chinese coastal growth areas. In the middle is the Yangtze River Delta region, which includes Shanghai with a population of 130m and a GDP of US$2trn. To the north is the Beijing-Tianjin-Bohai corridor, covering 10 cities and has a population of 100m and a GDP of US$1.3trn. These three urban clusters account for 21% of China’s population and about 40% of its GDP.



Part 3

 China’s Belt and Road initiative

 
It is not only important to understand the changes in China within the context of its recent history, MIC25 and Beijing’s restructuring of its healthcare sector, but also against the backdrop of China’s ambitious Belt and Road” (B&R) initiative. Unveiled by President Xi Jinping in September 2013, it has become the centre of Beijing’s ambitions for a new world order predicated upon a modern-day Silk Road connecting China by land and sea to Southeast Asia, Central Asia, the Middle East, Europe and Africa. It is a bold model of economic development, which Xi has called, “the project of the century”. The initiative is supported by the new Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund. Some estimates suggest that Beijing has already invested US$900bn in the project. Overall, it is expected to cost US$8trn and take three decades to complete. At its core are 6 economic corridors, which connect 65 countries, about 65% of the world’s population, involve some 40% of global trade and 33% of global GDP.
 
Belt and Road’s 6 economic corridors
  1. The Eurasia-Land-Bridge economic corridor is developing rail transportation between China and Europe through Kazakhstan, Russia and Belarus
  2. The China-Mongolia-Russia economic corridor aims to develop trade between China and Mongolia by modernizing transport, telecommunication and energy networks to make Mongolia a hub between China and Russia
  3. The China-Central Asia-West Asia economic corridor connects the Chinese province of Xinjiang to the Mediterranean Sea, through Kazakhstan, Kyrgyzstan, Tajikistan, Uzbekistan, Turkmenistan, Iran and Turkey 
  4. The China-Indochina-Peninsula economic corridor aims to strengthen cooperation among states of the Greater Mekong sub-region and support trade between China and the 10 nations of the Association of Southeast Asian Nations (ASEAN) that are already bound by a free trade agreement since 2010 to facilitate economic growth
  5. The China-Pakistan economic corridor connects Kashgar in the Chinese province of Xinjiang to the port of Gwadar in Pakistan and includes the construction of railways, highways, optical fibre networks, and the creation of an international airport in Gwadar as well as the establishment of special economic zones
  6. The Bangladesh-China-India-Myanmar economic corridor links Kunming to Kolkata (Calcutta) via Mandalay and Dhaka to strengthen connections between China and various economic centres of the Gulf of Bengal in order to increase interregional trade by reducing non-tariff barriers.
China’s neo-colonial strategy
 
China’s B&R initiative is based upon an interpretation of colonialism, which is significantly different to Western  interpretations. While Western nations struggle with a sense of guilt associated with their past colonial rule and feel responsible for the abject economic failure, widespread poverty and erosion of governance in post-colonial independent states, Beijing believes that there are lessons to be learned from colonialism, which are relevant today and necessary prerequisites to stimulate trade, economic growth and domestic employment. Beijing’s B&R initiative is best understood as a neo colonial strategy to strengthen China’s slowing economy, enhance its industrial capabilities and improve its geopolitical standing by driving economic growth in some of the least developed regions of the world, which are neglected by the West.
 
The lessons of Singapore
 
China’s neo-colonialist policies are influenced by Singapore, an island city-state located in Southeast Asia off southern Malaysia. The country gained independence from Malaysia in 1965 and has become a global financial centre with a multicultural population and a multi-party parliamentary representative democracy with a President as head of state and a Prime Minister as the head of government. Although China is 14,000-times bigger than Singapore, has 1bn more citizens and its GDP is US$14trn compared to Singapore’s US$300bn; China views Singapore as an object lesson of political stability and prosperity predicated upon aspects of its colonial legacy, which Beijing believes can be replicated in under-developed regions of the world. These include basic infrastructure, improved administration, widened employment opportunities, female rights, expanded education, improved public healthcare, taxation, access to capital, independent judiciary, and national identity. Such factors China views as benefits of colonialism and necessary prerequisites for trade, economic growth and prosperity. Singapore has a colonial history, but today is a rich country with a GDP per capita of US$55,235, (higher than that of the US: US$53,128) and where Asian culture is intact and Western knowhow is harnessed for economic growth and prosperity for its citizens and is where China would like to be in the future.
 
The AIIB comparable to other development banks
 
In 2013, when Xi Jinping first proposed creating the Asian Infrastructure Investment Bank (AIIB), Washington was against it and campaigned rigorously to persuade potential donor countries not to participate. The US expressed concerns that the AIIB would undermine the World Bank, and the Asian Development Bank (ADB), which operate in Asia and lend to China. Washington also believed that the AIIB would unfairly benefit Chinese companies and argued that China would not adhere to international banking standards of transparency and accountability. Today, the AIIB is up and running as a medium-sized regional development bank with capital of US$100bn and lending at around US$4bn. It is broadly comparable with other development banks and Washington’s concerns appear unfounded.
 
Systematically migrating low-tech manufacturing to low-cost locations
 
An important role of the AIIB is to assist the B&R initiative to open up and create new markets for Chinese goods and services, to stimulate exports and to provide low-wage locations, to which China can migrate its light manufacturing industries. Beijing no longer sees its country’s economy as competitive on the basis of low wages. China’s labour costs are rising faster than gains in productivity and cost estimates of outsourcing production to China will soon be equal to the cost of manufacturing in the US and Western Europe. China is adjusting to rising real wages in its domestic markets by systematically migrating its low-tech industries to less-common low-wage production operations in new locations in Africa such as Ethiopia.

A rationale for this strategy is provided in a 2017 paper from the Center for Global Development, which suggests that “Ethiopia could become the new China” as, “the cost of Ethiopian industrial labour is about 25% that of China today”. This suggests that migrating Chinese low-tech manufacturers might leap-frog middle and lower-middle income developing countries in favour of the poorest countries such as Ethiopia, which is included in China’s B&R initiative. African countries view B&R as a platform to promote global cooperation based on win-win strategies. Speaking at a conference in June 2018 in Addis Ababa, Tan Jian, the Chinese ambassador to Ethiopia said, "We are working closely with Ethiopia in advancing the Belt and Road Initiative. Ethiopia is a very important partner in this regard. We have been doing a lot of projects here in Ethiopia: infrastructure, policy dialogue, trade, financing and people-to-people exchanges.” At the same conference Afework Kassu, Ethiopia's Minister of Foreign Affairs, said, “the Belt and Road initiative is an advantage for African countries for infrastructure development and for economic growth”.
 
Concerns about China’s neo colonialism and debt management
 
Despite these good words, China's B&R initiative is not free of criticism mostly from Western nations and international institutions, which suggest Beijing’s motivation is a retrograde strategy that employs globalization to service its domestic economy, and many of the concerns are about China’s potential economic predominance.
 
A March 2018 Center for Global Development (CGD) paper suggests that because China’s record of international debt financing is not good, and the B&R initiative follows China’s past practices for infrastructure financing, which entail lending to sovereign borrowers, then the initiative runs the risk of creating debt distress in some borrower nations. The paper identifies 8 of the 68 B&R borrower countries as “particularly at risk of debt distress”. Pakistan is the largest country at high risk with the development of its Gwadar deep-sea port, which is part of the B&R China-Pakistan Economic Corridor. China is financing about 80% of this endeavour, which is estimated to cost US$62bn.  Other countries mentioned in the CGD paper to be at high-risk of debt distress from the R&D initiative include Djibouti, the Maldives, Laos, Mongolia, Montenegro, Tajikistan and Kyrgyzstan. The concern is that these at-risk nations could be left with significant debt ‘overhangs’, which could impede their ability to make essential future public investments and thereby challenge their economic growth more generally. Recently, public concerns from within China have been raised over the costs of the initiative. There is also concern that debt problems will create “an unfavourable degree of dependency” on China as a creditor. Several US Senators have expressed similar concerns and suggest that potential defaults could have a deleterious economic impact more generally. In addition to B&R loans, which have been questioned, it has been rumoured that Beijing has lent Venezuela US$60bn and also extended significant credit to Argentina. Venezuela is in economic meltdown and Argentina has applied to the IMF for a bailout
 
China’s mounting debt
 
China’s increasing exposure as a significant creditor to economically weak developing nations is compounded by its mounting debt and triggers concerns about China’s future stability. A popular Washington view, endorsed by President Trump’s chief economic adviser Larry Kudlow, is that China’s mounting debt and slowing growth mean that its “economy is going south”, and the recent imposition of tariffs on Chinese exports to the US will accelerate the nation’s demise. However, there is a view that Washington’s imposition of punitive tariffs is an over-reaction because the Chinese economy is nowhere as strong as that of the US economy. Notwithstanding, China is an important trading partner for the US and American companies should find a way to engage with China.
 
Since the 2008 financial crisis, China’s debt has been a concern in Beijing because it was a driver of the country’s economic growth. In 2016, Vice-Premier Liu He, President Xi’s top economic adviser, conscious of the potential national security risks of China’s mounting debt, took steps to de-risk the country’s financial sector. More recently, Liu has accelerated infrastructure investment and taken steps to avoid a banking crisis by ensuring that the renminbi does not fall too rapidly against the US dollar. Over the past 5 months the renminbi has weakened about 10% against the US$ and could weaken further if the currency becomes politicized. Despite Liu’s efforts to reign-in and control China’s debt, which some estimates put at about  260% of GDP, it is not altogether clear how successful these efforts will be especially if China’s debt challenges are considered in conjunction with its loose credit conditions.
 
Changing world economic order

Putting aside these concerns, it is instructive to note that a 2017 study by Price Waterhouse Coopers (PwC), suggests, ceteris paribus, that within the next decade China’s economy will be bigger than America’s and within the next three decades India’s economy will overtake that of the US. The study argues that the US will rank 3rd in the world and in 4th place could be Indonesia. The study suggests that China will have an economy of US$59trn, while India’s will be around US$44trn and America’s will total $34trn. Significantly, Japan (US$6.7trn), Germany (US$6.1trn), the UK ($5.3trn) and France (US$4.7trn), key markets for Western MedTech companies, are expected to fall respectively to 8th, 9th, 10th and 12th in the list. They are expected to be replaced by Indonesia (US$10.5trn), Brazil (US$7.5trn), Russia (US$7.1trn), and Mexico (US$6.8trn), which climb to 4th, 5th 6th and 7th positions respectively. This signals some significant economic shifts likely to take place over the next two to three decades and underlines the importance of emerging economies in the medium-term strategic plans of Western companies.
 
Takeaways
 
The world is on the cusp of some significant  economic changes and the two nations most likely to affect those changes are the US and China. Beijing’s policies and global aspirations are helping China to step into a leadership void created by Washington’s current rejection of multilateralism. However, it is still not altogether clear whether China will be able to sustain this new position, and the uncertainty this causes presents a significant strategic dilemma for Western companies seeking growth outside their current markets in the developed world. China is too big to be ignored by Western companies, but China’s conditions for engagement are onerous and its long-term stability remains in doubt.
view in full page
  • China is seen as a significant growth frontier for MedTech
  • Over the past 2 decades Western companies have derived billions from China
  • But today companies seeking or extending their franchises in China will encounter significant barriers
  • China is successfully decreasing its dependence on Western medical devices and other high-tech products and replacing them with domestic offerings
  • The choice facing Western companies expecting to derive revenues from China is: either localize your value chain and help China achieve its goals to dominate key industries globally or be progressively squeezed out of markets
  • Some Western companies have localized and manufacture their offerings in China
  • Some MedTech companies concerned about China’s weak intellectual property (IP) protection and buoyed by 2 decades of growth and the current performance of the US stock market are turning away from China
  • Could adherence to history dent their futures?
  
China’s rising MedTech industry and the dilemma facing Western companies

 
This is the first of two Commentaries on China.
 
Increased cost pressures, maturing home markets, resource constraints, growing regulatory pressures and rapidly changing healthcare ecosystems are driving Western MedTech companies to seek or expand their franchises in large fast-growing emerging economies. For many, the country of choice is China. AdvaMed, the American MedTech trade association says, “China presents the most significant growth market for the medical device industry today and for the foreseeable future.”

Despite only accounting for 3% of the global MedTech market share, China’s attraction is a US$14trn economy growing at some 7% per annum, a population of 1.42bn with a large, ageing middleclass with disposable incomes, rising healthcare consumption and Beijing’s commitment to increase healthcare expenditure to provide care for all its citizens from “cradle-to-grave”. All these factors drive China’s MedTech market and the certainty of its increasing demand.

Despite this positive scenario, there are an increasing number of non-tariff barriers facing Western MedTech companies in China. This is because Beijing has launched extensive and aggressive initiatives to decrease China's dependence on Western medical devices and replace them with domestic offerings. Opportunities in China for Western players are shrinking and becoming tougher as Beijing’s new healthcare reforms kick-in and Chinese MedTech companies strengthen, increase their capacity, move up the value chain and take a bigger share of the domestic markets. To compete effectively in China, Western companies need to enhance their understanding of Beijing’s extensive healthcare reforms, increase their understanding of the complexities of China’s new procurement processes and be prepared to localize their value chains.
 
In this Commentary

This Commentary is divided it into 2 parts.
  • Part 1: China an ‘el Dorado’ for Western MedTech companies describes the significant commercial benefits derived by some Western companies who, for the past two decades, have supplied high-end medical devices to the Chinese market and benefitted from: (i) Beijing’s commitment to extend healthcare to all citizens, (ii) the country’s vast, rapidly growing and underserved middleclass and (iii) China’s large and aging population with escalating chronic lifetime diseases. These market drivers have profited Western companies because domestic Chinese MedTech enterprises had neither the capacity nor the knowhow to produce high-end medical devices. This gave rise to a bifurcated MedTech market with domestic Chinese companies producing low-end offerings and Western companies supplying high-end products.
  • Part 2: China the end of the ‘el Dorado’ for Western MedTech Companies suggests that commercial opportunities in China for Western MedTech companies have shrunk significantly and become much tougher as domestic manufacturers, incentivized by Beijing, move up the value chain and capture a bigger share of the domestic market. We describe Made in China 2025 (MIC2025), which is a well-resourced government initiative aimed at decreasing China’s dependence on Western MedTech suppliers by enhancing the capacity and scale of Chinese companies. This, together with China’s current 5-year economic plan aimed at a “healthier China” and its 2009 healthcare reforms are already significantly effecting some segments of MedTech markets previously dominated by Western companies.


PART 1
 
 China an el Dorado for Western MedTech companies
 
China’s healthcare market and the MedTech sector
The attraction of China’s healthcare market to Western investors over the past decade is easy to comprehend. In 2013 China surpassed Japan to become the world’s second-largest healthcare market outside the US and the fastest growing of all large emerging markets. Healthcare spending is projected to grow from US$854bn in 2016 to US$1trn in 2020. In 2016, China’s healthcare expenditure as a proportion of its GDP was 6.32%, up from 4.4% in 2006, and this is expected to rise to between 6.5 and 7% by 2020. Although this is a lower percentage than that of the US with 17%, Germany with 11%, Canada, Japan and the UK with about 10%; it suggests that China’s healthcare market has a substantial upside potential; especially as the country’s middleclass grows and becomes economically stronger and Beijing’s healthcare reforms kick-in.
 
The attraction of China’s MedTech market to Western investors also is easy to understand. It is one of the fastest growing market sectors, which has maintained double-digit growth for over a decade. In 2016 China’s MedTech market was valued at US$54bn, an increase of 20% compared to 2015; 72% of which was fuelled by hospital procurements. In 2017 China imported more than US$20bn worth of high-end medical devices the overwhelming majority of which was supplied by Western companies.
 
Drivers of China’s MedTech markets
 
Three China market variables making for highly valued Western MedTech businesses include: (i) the country’s vast, rapidly growing and underserved middleclass, (ii) China’s large and aging population with escalating chronic lifetime diseases and (iii) Beijing’s commitment to extend healthcare to all of its citizens.

 
  1. Rapidly growing and underserved middleclass
China’s past rapid economic growth lifted hundreds of millions of its citizens out of poverty and into the middleclass. As China’s middleclass has grown, its healthcare market has expanded and the opportunities for Western MedTech companies have increased. This partly offsets slower demand experienced by Western MedTech companies after 2009 when middleclass consumers in developed countries were challenged by the shocks to their living standards caused by the 2008 recession and subsequent lower global economic growth.
 
Since 2015, Chinese middleclass consumers have become a significant driver of the country’s economic activity and are projected to remain so through at least 2025. Since 2000, annual real GDP growth per capita has averaged 8.9% while real personal disposable income on average has risen 9.2%. According to Credit Suisse’s Global Wealth Report, in 2015 China overtook the US as the country with the biggest middleclass, which is comprised of some 109m adults compared with 92m in the US. Today, the Chinese middleclass is facing more lifestyle related diseases, whilst expecting more and better healthcare. By 2025, China’s middleclass is projected to reach 600m and have an annual disposable income between US$10,000 and US$35,000. Further, compared to the US and the UK, China’s middleclass has a low level of household debt. China’s household debt-to-GDP ratio is 40% compared with 87% for that of the US and UK. This suggests that consumer led growth in China still has a significant upside. However, there are cultural obstacles to Chinese citizens assuming more personal debt.

 
  1. Large aging population with escalating chronic lifetime diseases
China has a population of 1.42bn and each year Chinese citizens give birth to some 20m. In January 2016 China lifted its 40-year-old one-child policy, which is expected to increase the country’s birth rate and increase the demand for in-vitro fertilization among older parents. Notwithstanding, partly because of the country’s falling fertility rates and partly the increasing life expectancy of the elderly share of the country’s population (In 2017 total life expectancy was 76.5), the number of elderly Chinese citizens has been increasing. According to China’s Office of the National Working Commission on Aging, in 2017 the number of its citizens aged 60 or above had reached 241m, accounting for some 17% of the total population and this is expected to peak at 487m, or 35%, around 2050, when it is projected that China will have 100m citizens over 80.

This is significant because elderly people have a higher incidence of disease, demand more frequent, longer and more complicated treatment regimens and use medical services more often than their younger counterparts. For example, China’s ageing population is fuelling the rise in demand for orthopaedic devices. Projections suggest that over the next decade China could become the world’s largest orthopaedic device market. As the Chinese population continues to age, demand for healthcare services and medical devices are expected to increase substantially. Notwithstanding, a ‘dependent’ large growing and aging population has a significant economic downside.
 
Further, the 600m Chinese citizens of prime earning age tend to live in large urban centres. China has some 662 cities; 6 of which are mega cities with populations of about 10m. 160 Chinese cities have populations in excess of 1m. Increased urbanization, changing diets and lifestyles and increased air pollution and other environmental hazards are causing a substantial rise in the prevalence of chronic lifetime diseases. It is estimated that 330m Chinese citizens currently have chronic diseases. According to a 2018 study almost 100m adults (8.6%) have chronic obstructive pulmonary disease (COPD), about 110m have diabetes and more than 80m Chinese citizens are handicapped. Altogether this creates a vast and growing demand for various high-end medical devices.

 
  1. Beijing’s commitment to extend healthcare to all citizens
A 3rd driver of China’s expanding healthcare sector is Beijing’s healthcare reforms launched in 2009 and its current 5-year economic plan, which prioritizes a "Healthy China". According to a 2016 World Bank report, ”Since the launch of the 2009 health reforms, China has substantially increased investment to expand health infrastructure; strengthened the primary-care system; achieved near-universal health insurance coverage in a relatively short period; reduced the share of out-of-pocket expenses - a major cause of disease-induced poverty - in total health spending; continued to promote equal access to basic public health services; deepened public hospital reform; and improved the availability, equity and affordability of health services. It has also greatly reduced child and maternal mortality and rates of infectious diseases and improved the health and life expectancy of the Chinese people.”
 
The share of healthcare expenses covered by the government is expected to increase from 30% in 2010 to 40% in 2020, but current regional differences in access to and quality of healthcare are expected to remain in the near term. China’s current economic plan, which was approved in 2015 and adopted in 2016 is responsible for a number of well-funded and aggressive healthcare reform programs, and increased investment in healthcare infrastructure. The plan also encourages private capital investment to improve service quality and meet the public’s diverse, complex and escalating healthcare needs.
 
Bifurcated MedTech market

These three healthcare drivers have significantly benefitted Western MedTech companies who leveraged their pre-existing products and business models and served China’s fast growing and underserved high-end MedTech markets with sophisticated medical devices. Chinese domestic MedTech companies, which today are comprised of about 16,000 small-to-medium sized light manufacturing enterprises on China’s east coast, participated in the low end of the global value chain and mostly produced Class I and II cheap disposable medical devices, which required simple forms of manufacturing or assembly, but created large numbers of jobs and made a significant contribution to poverty reduction. This mutual dependence gave rise to a bifurcated market and reflected the type of foreign direct investment that China attracted at the time and the relative lack of capacity of the domestic labour force.
 
The foreign sourced market segment has been served historically by large, well-resourced Western MedTech companies such as Medtronic, General Electric (GE), PhilipsSiemens, Zimmer Biomet  and DePuy Synthes. Before 2009, such companies enjoyed a near monopoly supplying their pre-existing high-end medical devices to large Chinese hospitals (see below). US MedTech companies were the #1 foreign supplier of such offerings, followed by Germany and Japan. These 3 countries represented the overwhelming majority share of China’s imports of medical devices.


PART 2

China the end of the el Dorado for Western MedTech companies
 
Between 2003 and 2009 foreign direct investment in China’s MedTech sector was concentrated in low-value-added activities. This pattern reversed during 2010-2018 and enabled Chinese MedTech companies to move up the value chain and develop more sophisticated manufacturing processes, increase their R&D capacity, enhance their post-market services and begin to penetrate more segments of the higher-value-added Class lll MedTech markets. As this happened so the predominance of Western MedTech companies providing high-end product offerings was reduced. This shift suggests that late entrants to the China market may struggle.
 
A 2017 survey conducted by China’s New Center for Structural Economics, covering 640 Chinese export-oriented labour-intensive companies across four sectors between 2005 and 2015 suggests that upgrading low-tech industries is pervasive throughout China. “’Technology upgrading’ was the firms’ most common response to their challenges: 31% of firms ranking it top and 54% in their top three responses. Tighter cost control over inputs and in production was next (top for 27% of firms) and changing product lines or expanding markets was third most common (24%)”, says the report.
 
Taking share from Western companies

To-date domestic Chinese MedTech companies have captured about 10% of the technologically intensive segments of endoscopy and minimally invasive surgery as measured by value, and 50% of the market in patient monitoring devices and orthopaedic implants. Only 5 years ago Western companies such as Zimmer Biomet  and DePuy Synthes controlled 80% of the Chinese high-end orthopaedic market segments. Further, about 80% of China’s market of drug-eluting stents, (medical devices placed into narrowed, diseased peripheral or coronary arteries, which slowly release a drug to block cell proliferation), which is another relatively high-end therapeutic device segment, is controlled by Biosensors InternationalLepu Medical, and MicroPort. These three Chinese companies market drug-eluting stents, on average, for about 40% less than their Western counterparts. Just over a decade ago 90% of this market was controlled by Western MedTech companies. Similarly, Chinese companies have increased their domestic market share of digital X-ray technologies to 50%. In 2004 they had zero share of this market.
 
Made in China 2025
 
In May 2015, Beijing launched “Made in China 2025” (MIC2025), which is a national strategy to enhance China’s competitive advantage in manufacturing. Increasing competition from developing nations with similarly competitive costs, coupled with technology-driven efficiency gains in developed countries, means that China’s abundance of cheap labour and the competitive advantage of its infrastructure will soon be insufficient to drive sustainable economic growth. MIC25 is expected to redress this by comprehensively upgrading, consolidating and rebalancing China’s manufacturing industry, and turning China into a global manufacturing power able to influence global standards, supply chains and drive global innovation.
 
The strategy names 10 sectors, including medical devices, which qualify for special attention to help boost the country’s goal of accelerating innovation and improving the quality of products and services. The initiative incentivizes domestic Chinese companies, including SMEs, to increase their usage of artificial intelligence and digital technologies to move up the value chain and capture a greater market share from their Western counterparts. MIC2025 is explicit about China reducing its reliance on Western imports and includes subsidies, loans and bonds to support and encourage domestic companies to: (i) continue increasing their capacity, (ii) devise lean business models that emphasize “affordability”, (iii) increase their R&D, (iv) expand their franchises overseas, and (v) acquire foreign enterprises with cutting-edge technologies. The initiative  also addresses issues of quality, consistency of output, safety and environmental protection, which are all considered strategic challenges to China’s development.
 
Beijing expects MIC2025 to increase the market share of Chinese-produced medical devices in the country’s hospitals to 50% by 2020 and 70% by 2025, enable Chinese companies to compete with Western MedTech giants by 2035 and make China a world MedTech leader by “New China’s” 100th birthday in 2049. The initiative is expected to quickly spread beyond China’s borders as its leading manufacturers seek to develop global supply chains and to access new markets. MIC25 is important for the next stage of China’s emergence as an economic superpower and its ambition to design and make the products of the future required not only by the Chinese consumer, but consumers around the world.
 
US attempts to halt MIC25

While many Western countries are debating how to respond to MIC25 Washington sees the initiative as a well-defined, well-orchestrated strategy, which is “unfair and coercive” because it includes government subsidies and the “forced transfer” of technology and IP to enable the Chinese to “catch-up and surpass” American technological leadership in advanced industries.  An August 2018 US Council for Foreign Relations response says, “MIC25 relies on discriminatory treatment of foreign investment, forced technology transfers, intellectual property theft, and cyber espionage”. In June 2018 Washington sought to halt the policy by levying punitive tariffs on Chinese imports into the US and blocking Chinese-backed acquisitions of American technology companies.
 
The commercial effects of increased tariffs are unclear

It is not altogether clear how successful Washington’s punitive tariffs will be because they could unsettle the US medical supply industry given that a growing number of product offerings marketed in the US are made in China. MRIs, pacemakers, sonograms and other medical devices manufactured in China and imported into the US are all included in the list of items subject to the increased US tariffs. Some estimates suggest that the tariffs will cost the American medical device industry more than US$138m in 2018, and about US$1.5bn every year there after. According to AdvaMed, the US enjoys a trade surplus with China for medical products and rather than grow US productivity, the tariffs could result in less trade and a smaller surplus in medical devices. Whilst protectionist, the MIC25 initiative is permitted under World Trade Organization rules as China is not a signatory to the Agreement on Government Procurement, which covers state run hospitals. Further, historically healthcare products have been excluded from tariffs on humanitarian grounds and because they are seen as an asset to public health.
 
Western companies ‘encouraged’ to localize their value chains
 
Although Beijing is seeking to reduce its dependence on imported medical devices, it has not shut-out Western companies who are expected to continue to be significant high-tech market players in the short to medium term. This is because such international trade is crucial to facilitate China’s access to global knowhow and technology. But Beijing has amended its procurement and reimbursement policies to incentivise hospitals to purchase domestically manufactured medical devices and introduced tough conditions on companies seeking to do business in China. To qualify for inclusion in China’s new hospital procurement arrangements Western companies are obliged to localize their value chains and partner with domestic enterprises. Some companies have done so, while others have been reluctant to localize their value chains because of China’s weak record of IP protection. Beijing is aware of this and is streamlining and strengthening its IP prosecution system (see below).
 
Western importers seriously handicapped
 
Importers who choose not to localize their value chains face a number of significant non-tariff barriers. Unlike other Asian countries such as Japan, China has no national standard for tendering and bidding and there are significant differences between its 34 provincial administrations and 5 automatous regions. Further, China has a dearth of large ‘general’ distributors. Western MedTech companies importing product offerings into China are obliged to engage small-scale distributors dedicated to one sector, one imported brand and one type of product. Such distributors are ill-equipped to effectively navigate China’s vast hospital sector (see below) and its complex, rapidly changing and disaggregated procurement and reimbursement processes. A clash of sales cultures is a further disadvantage for Western MedTech companies’ whose marketing mindset is product-centric territory driven, while winning sales strategies in China and in other emerging markets are customer-centric key-account driven.
 
China’s vast hospital sector
 
One dimension of the challenges faced by Western MedTech companies who are obliged to engage small-scale distributors is the enormity of China’s hospital sector. China has about 30,000 hospitals, which have increased from about 18,700 in 2005, serving a population four and a half times that of the US across a similar land mass. By comparison, the US has some 15,500 hospitals and England 168 NHS hospitals. About 26,000 hospitals in China are public and some 4,000 are private. Although public hospitals in China provide the overwhelming majority of healthcare services, this is changing.  Recently, Beijing has loosened its regulations and private sector healthcare has witnessed an influx of private capital. Over the next decade, China’s private healthcare sector is expected to see new hospital chains, expansion of existing hospitals and improvements in a range of private healthcare services. Currently, Western participation in the Chinese private healthcare market is nascent but expected to grow over the next decade.
 
China’s hospitals provide about 5.3m beds, compared with about 890,000 in the US and 142,000 NHS beds in the UK. Chinese public hospitals, which are the biggest consumers of Western medical devices, are categorized into 3 tiers according to their size and capabilities. The largest are tier-3 hospitals of which there are about 7,000. These are 500-bed-plus national, provincial or big city hospitals, which provide comprehensive healthcare services for multiple regions as well as being centres of excellence for medical education and research. There are about 1,500 tier-2 hospitals, which are medium size city, county or district hospitals. Together teir-2 and 3 hospitals represent about 3.5m acute beds. Tier-1 hospitals are township-based and do not provide acute services. There is a range of specialist hospitals, which are also significant users of imported high-end medical devices. Further, Beijing is beginning to develop primary care facilities, which are normal in North America and Europe, but underdeveloped in China.
 
Mega private hospitals
 
Healthcare in China has traditionally been the monopoly of the central government. However, Beijing’s recent relaxation of the rules on private investment referred to above has triggered an explosion in the number of private healthcare facilities and the development of mega hospitals on a scale not seen elsewhere in the world. For example, Zhengzhou Hospital, which is nearly 700km south of Beijing and can be reached by bullet train in under 3 hours at a cost of about US$45, was officially opened in 2016 and was dubbed the “largest hospital in the universe”. Zhengzhou is a mega-city with a population of 10m and is the capital of east-central China's Henan province. The hospital has some 10,000 beds, facilities are spread across several buildings and over 28 floors and it has its own fire department and police station. In 2015, the hospital admitted some 350,000 inpatients and treated 4.8m people. In one day in February 2015 the hospital received 20,000 out-patients. 
Centralizing procurement
 
Most noticeable among the changes taking place in China’s procurement processes for domestically produced medical devices is the development of centralized e-commerce facilities, which are expected to increase efficiency and reduce spiralling hospital costs. The initiative is a partnership, announced in 2018, between IDS Medical Systems and Tencent’s digital healthcare subsidiary WeDoctor, to establish China’s first smart medical supply chain solutions and procurement company, which in the near term, is expected to dominate the Chinese market by becoming the “Amazon of healthcare”. Tencent is the world’s 6th largest social media and investment company and IDS Medical Systems is a Hong Kong based medical supply company with an extensive Asia-Pacific distribution network, which represents over 200 global medical brands in medical devices and consumables. 
 
WeDoctor, was founded in 2010 to provide online physician appointment bookings, which is an issue in China and patients often stand in-line for hours from 2 and 3 in the morning outside hospitals to get brief appointments with physicians. From this modest beginning WeDoctor has rapidly evolved into a US$5.5bn company, which employs big data, artificial intelligence and other digital tools to deliver cutting-edge healthcare solutions and support services to over 2,700 Chinese hospitals, 240,000 doctors, 15,000 pharmacies and 160m platform users; and these numbers are expected to increase significantly in the next few years.
 
Underpinning WeDoctor’s business model and differentiating it from Western endeavours such as Google’s DeepMind, is the freedom in China to collect and use patient data on a scale unparalleled in the West. WeDoctor is designed to leverage Tencent’s significant complementary strengths, innovative resources and networks in order to centralize device procurement by connecting domestic MedTech companies with China’s vast hospital network. WeDoctor’s ability to manage petabytes of patient data, its knowledge of and favoured position in China’s hospital procurement processes, its rapid and sophisticated distribution capacity and central government support, positions WeDoctor to have a significant impact on the procurement of medical devices in China and beyond in the next five years, and this is expected to provide domestic companies with a further competitive edge.
 
Localizing the value chain in China

Manufacturing in China has been an option only for larger Western MedTech companies with the necessary management knowhow, business networks and finance to bear the costs. Companies which have localized their value chains and support the MIC25 initiative include Medtronic and GE Healthcare.
 
Medtronic
Medtronic, the world’s largest MedTech company, has had a presence in China for the past 2 decades and has established local R&D facilities to design products specifically for the needs of the Chinese market and crafted partnerships with provincial governments to help educate patients about under-served therapeutic areas. In 2012 Medtronic acquired Kanghui Medical, for US$816m. In December 2017 the Chinese government approved sales of a new pacemaker, which is the product of a strategic partnership between Medtronic and Lifetech Scientific Corporation. In January 2012 Medtronic paid US$46.6m for a 19% stake in Lifetech and a further US$19.6m for a convertible loan note. The agreement called for LifeTech to develop a line of pacemakers and leads using its manufacturing plant in Shenzhen, (population 13m). Medtronic supplied “technology, training and support” and LifeTech provided local market expertise, brand recognition and growth potential within China. The alliance has made Lifetech the first Chinese domestic manufacturer with an implantable cardiac pacing system with world-class technology and features. In 2015 Medtronic entered into a partnership with the Chengdu’s (population 14.4m) municipal government in the south west of China to enable people with diabetes in Chengdu and the broader Sichuan province (population 87m) to access a new, locally produced next generation sensor augmented pump system with Medtronic’s SmartGuard technology and software displayed in the Chinese language. Medtronic’s 2017 revenues from its China operations amounted to US$1.6bn, 5% of total revenues, and US$3.4bn from other Asia-Pacific countries, 12% of total revenues.
 
GE Healthcare
GE Healthcare is the largest medical device manufacturer in China and China is a key manufacturing base for GE. GE started conducting business in China in 1906 and today has over 20,000 employees across 40 cities in the country. One third of GE's ultrasound probes, half of its MRIs and two thirds of its CT scanners, which are marketed globally are manufactured in the Chinese cities of Wuxi, Tianjin and Beijing respectively. These devices and others are now subject to a punitive US tariff levied in June 2018. “We remain concerned that these tariffs could make it harder for US manufacturers to compete in the global economy, and will shrink rather than expand US exports,” says Kelly Sousa, a GE Healthcare spokesperson.
 
Rachel Duan, president and CEO of GE China explains that, “GE China has been investing in people, processes and technologies throughout the value chain so that it can design, manufacture and service products closer to customers. This goes beyond market and sales localization, to product R&D, manufacturing and product services." GE has pinpointed localization, partnership, and digitization as the three key initiatives to drive its future development in China. In May 2017 GE opened an Advanced Manufacturing Technology Center in Tianjin, its first outside the US, and has partnered with over 30 Chinese engineering, procurement and construction (EPC) companies. "With a global footprint and depth of localized capabilities in China, we are partnering with customers and helping them win both in China and worldwide by connecting machines, software, and data analytics to unlock industrial productivity," says Duan. 

 
Changing IP environment
 
Medtronic and GE Healthcare provide object lessons of how best Western MedTech companies might leverage commercial opportunities in China. But many remain reluctant to manufacture in China because historically the country’s legal system has been weak in prosecuting IP infringements and more recently they have been further handicapped by Washington’s response to MIC25. For many years, when dealing with China, Western companies have faced a combination of IP challenges, which included litigation with low level damages, an inability to effectively enforce judgments, an inability to patent certain subject matter and a lack of transparency on legal issues. This amounts to substantial disincentives for Western companies to localize their value chain in China. However, the country’s IP environment is changing. In 2017 Beijing spent some US$29bn for the rights to use foreign technology, with the amount paid to US companies increased by 14% year-on-year. China’s IP legal system is maturing and has improved in the scope of allowable patent subject matter to enhancements of litigation options. However, Western reluctance to localize production in China is not only influenced by the country’s weak IP protection and recent trade tensions with the US, but also by ethical concerns and the perceived need for more predictable rules and institutions about environmental and regulatory issues.
 
All this, together with two decades of growth in developed nations and the continued performance of the US stock market might be enough for some MedTech companies to turn-away from China, but could such a reaction dent their futures?

 
Takeaways

This Commentary describes some of the near-term challenges facing Western MedTech companies looking to offset increasing challenges in their home markets by extending their franchises in China. We have suggested why operationalizing this strategy in the short term will be tougher than 5 years ago, especially if Western MedTech companies are reluctant to innovate and transform their strategies and business models. China presents a challenging dilemma for Western companies: either they manufacture in China and support that nation’s endeavours to become a world class manufacturing platform or they progressively get squeezed out of markets. Whatever Western companies decide, we can be sure that their near to medium term futures will be shaped by maturing developed world markets, encumbered by short termism and aging infrastructures and a rising Chinese economic power with state-of-the-art infrastructures and significantly enhanced capacities and capabilities. But how long can China sustain its rise?
view in full page
  • The MedTech industry is undergoing an era of unprecedented change
  • Pressure on revenues and margins have forced leaders to cling tightly to business as usual
  • In the next decade business as usual will come with significant commercial risks
  • For commercial success future MedTech leaders will need to be different to past leaders
 
Who should lead MedTech?
 
Questions about who should lead medical device (MedTech) companies in the future and what strategies and business models they should pursue are critical. Over the next decade MedTech faces an era of unprecedented change, when it will be necessary to develop new strategies, new business models, new markets, new capabilities and new technologies, while keeping the legacy business running. Future MedTech leaders will be tasked with bridging the gap between traditional manufacturing and sophisticated, digitally driven services while managing unprecedented change and significant competition. For the past 20 years MedTech leaders have been drawn from a relatively narrow set of people with a relatively narrow set of skills. Although this has served the industry well, it might not be the most appropriate policy to ensure commercial success over the next decade.
 
In this Commentary

In this Commentary we: (i) describe the traditional MedTech market, indicate the structure parameters of the industry and note that there is a rapidly evolving parallel digital healthcare technology market: one that is growing more than twice as fast and soon will be comparable in size to the traditional manufacturing-based market, (ii) suggest that MedTech leaders tend to be men in their 50s with limited understanding of this parallel digital healthcare universe, which is positioned to play a significant role in  shaping MedTech companies of the future, (iii) suggest that because MedTech leaders have performed relatively well over the past two decades, they have tended to become prisoners of their own traditions and felt little or no need to evolve their strategies and business models, (iv) contend that MedTech leaders’ principal response to market changes to-date has been increased M&A activity, which has made companies bigger but not better, (v) suggest that the industry is undergoing a significant market shift from manufacturing to solutions and services driven by the 4th industrial revolution, which is characterized by a fusion of technologies, and (vi) conclude that future MedTech leaders will require a deep knowledge and understanding of the 4th industrial revolution if they are to successfully transform traditional strategies and business models in order to deliver superior healthcare solutions at lower prices.
 
MedTech market and the structure of the industry

MedTech is a conservative manufacturing industry, which produces and markets a diverse group of product offerings predominantly in a few developed wealthy markets. Over the next decade the MedTech market is expected to change significantly. For the past two decades the industry has fallen into three broad segments: (i) diagnostic products, which include imaging devices, with a global market of some US$100bn, (ii) medical aids including consumer durables, such as hearing aids and bandages with a worldwide market of about US$150bn, and (iii) surgical products that include equipment and instruments used in the operating room, which has a global market of some US$140bn.
 
A 2017
EvaluateMedTech report suggests the global MedTech market is projected to eclipse US$500bn in sales by 2021, over 33% of which is expected to be derived from the US. The worldwide market is projected to continue growing at a compound annual growth rate (CAGR) of 5%. Ranked by 2017 revenues, seven of the world’s largest MedTech companies are American and a significant proportion of the world’s MedTech companies trade on Nasdaq. This includes 13 large companies with a market cap in excess of US$10bn, some of which are divisions of even larger corporations such as Johnson & Johnson Medical Devices and Diagnostics, with estimated global sales of US$38bn for 2018; this equates to approximately 7.6% of the worldwide MedTech market. Medtronic, which is the world's largest stand-alone MedTech company, has a market cap of US$117bn and in 2017 recorded revenues of US$29.7bn; 26% of which was generated in the US. Nasdaq has about 24 mid-cap MedTech companies ranging in value from US$2bn to US$10bn. The majority of these are American and tend to be regionally based with relatively small markets outside the US, Europe and Japan. There are some 27 small-cap companies with market caps between US$300m and US$2bn, 46 micro-cap companies ranging from US$50m to US$300m and finally some 28 nano-cap MedTech companies with market caps less than US$50m.
 
In recent years, a digital healthcare technology industry, where medical devices meet innovative software, has grown substantially, but mostly in parallel to the traditional manufacturing-based MedTech industry. According to
Transparency Market Research, in 2016 this industry, which is based on healthcare information systems and wearable devices, had annual sales of US$180bn, and is projected to grow at a CAGR of 13.4% between 2017 and 2025, reaching US$537bn in annual sales by the end of 2025.

 
MedTech executive leadership
 
There is a relative dearth of data specifically on MedTech leaders and the demographics of MedTech C-suites (senior executives which tend to start with the letter C). Notwithstanding, there are data on Fortune 500 and S&P 500 company leaders from regular surveys undertaken by executive search firms Korn Ferry, and Spencer Stuart. Some of the larger MedTech companies, such as Abbot Laboratories, Baxter International, Stryker and Boston Scientific, are listed in the Fortune 500 and S&P 500. If we assume a significant similarity between the demographics of Fortune 500, S&P 500 and MedTech company executives, then MedTech leaders will tend to be white males in their 50s, predominantly drawn from similar sector company C-suites and will have an average tenure of about eight years.
  
Middle-aged men
 
Over the past 20 years MedTech leaders have benefitted from the industry’s commercial success, albeit in recent years at a slower pace than before 2007. Most leaders are constrained by quarterly earnings targets, shareholder expectations, regulations and the high risk and cost associated with changing manufacturing systems. MedTech CEOs received their formative education before the widescale uptake of the Internet and email. Many had just started their careers in large corporations when giant technology companies such as Amazon (launched 1994) and Google (1998) in the US and their Chinese equivalents - Alibaba (1999) and Baidu (2000) - were start-ups, and the Chinese and Indian economies were still somewhat underdeveloped and inchoate. Consequently, most MedTech leaders were entering middle-age when US social media giants such as Facebook (2004), YouTube (2005), WhatsApp (2009) and Instagram (2010) and their Chinese counterparts such as WeChat (2011), RenRen (2005), Weibo (2009) and Youku (2005), were just taking off.
 
This might partly explain why some MedTech leaders appear to be challenged by the rapidly evolving new digital technologies and the industry’s shift from manufacturing to solutions and services. Such is the pace of change, it will require a shift of mindset among incumbent MedTech leaders if they are to fully grasp this new and significant opportunity set.
 
Similarly, with emerging markets. Most CEOs have knowledge of the wealthy MedTech markets, in particular the US and Europe. Few, however, have in-depth knowledge or first-hand experience of the large and fast-growing emerging economies such as Brazil, Russia, India and China (BRIC). The BRIC countries are at a similar stage of their economic development, and have a combined population of more than 3bn, which equates to about 40% of the global population. BRIC countries are differentiated from other promising emerging markets by their demographic and economic potential to rank among the world’s largest and most influential economies in the 21st century, and by having a reasonable chance of realizing this potential.
 
A future HealthPad Commentary will examine the opportunities for Western MedTech companies seeking or expanding their franchise in China and will suggest that they might not find it as easy as it would have been 5 years ago. Opportunities in China for global MedTech players are becoming tougher as the Chinese economy slows and restructures; Beijing’s healthcare reforms kick-in and local MedTech producers, buoyed by legislation, revenue growth and increased capacity, become commercially stronger, more technically sophisticated and take a bigger share of both the Chinese domestic and international emerging MedTech markets.
 
Underrepresentation of women
 
Not a single woman serves as CEO of a large MedTech company. Only 22% of their board members are women, which is about the same proportion as the Fortune 500 overall (20%), and about 22% of MedTech C-suites are women. In 2017, nearly 50% of the US labour force were women and 40% of these worked in management, professional and related occupations.  Although women are underrepresented in MedTech leadership positions they are key stakeholders in healthcare. About 35% of active US physicians are women. According to the Association of American Medical Colleges, (AAMC), 46% of all physicians in training and almost 50% of all medical students in the US are women.  60% of pharmacists in America are women.

It should not be forgotten that women have played significant roles in medicine and healthcare. For example, Marie Curie, the only person to win a Nobel Prize in two different sciences, pioneered research on radioactivity. Curie made a significant contribution to the fight against cancer and is credited with having created mobile radiography units to provide X-ray services to field-hospitals during World War I. Sussman Yalow, was awarded the Nobel prize in Physiology or Medicine in 1977 for the development of the radioimmunoassay technique, and Gertrude Elion won a Nobel Prize in Physiology or Medicine in 1988 for her work in helping to develop drugs to treat leukaemia and AIDS. More recently, Jennifer Doudna, and Emmanuelle Charpentier, were credited with the discovery of the ground-breaking CRISPR-Cas9 gene-editing technology, which effectively changes genes within organisms and is positioned to radically change healthcare and MedTech in the 21st century.

In addition to under-representation, which suggests that the pipeline of women candidates for top jobs in MedTech is weak, there is some evidence to suggest that the MedTech industry does not have a positive attitude towards women. Findings of a 2015 survey conducted by AvaMed, the industry’s principal trade association, suggest that women in the industry feel discriminated against. Some 42% of women respondents of the survey said they, “felt held back from senior leadership positions” and 37% felt “overtly discriminated against”. "The world cannot afford the loss of the talents of half its people if we are to solve the many problems which beset us,” said Yalow in her 1977 Nobel Prize acceptance speech.
 
MedTech’s business model
 
Over the past two decades MedTech leaders have drawn comfort from the fact that the global MedTech market is highly centralized. The US, Western Europe and Japan, which represent only about 13% of the world’s population, account for more than 86% of the global MedTech market share (US: 42%, Europe: 33%, Japan: 11%). Conversely, the BRIC countries, which represent about 40% of the world’s population, currently only account for about 5% of the global MedTech market. This has enabled MedTech leaders to market their product offerings to healthcare providers principally in a few wealthy developed regions of the world via well-compensated sales representatives with deep product knowledge and expertise. The industry’s predominant business model has been to raise prices on existing products and market new offerings at higher prices than the products they are meant to replace. This worked very well before 2007 during a period of sustained global economic growth, predominantly fees-for-service healthcare systems and relatively benign reimbursement policies; all of which contributed to high margins and significant sales growth.
 
Market changes not perceived as acute enough to trigger transformation
 
Since the 2008 recession the MedTech market has changed. The global economy has weakened, debt (sovereign, corporate and personal) has escalated, populations have continued to grow, and the prevalence of chronic lifetime diseases and multi-morbidities have increased. Over that period, healthcare systems have become fiscally squeezed, costs have become pivotal and impacted all stakeholders. This has led to: (i) a shift in healthcare systems from fees-for-service to fees-for-value (ii) increased consolidation, convergence, and connectivity of stakeholders and a consequent change in purchasing decisions from individual (fragmented) hospitals and clinicians to centralized procurement bodies, which can leverage economies of scale and negotiate for larger purchases at volume discounts, (iii) the decline of MedTech R&D productivity, and (iv) increased competition from new market entrants, often from different industries. MedTech’s gross margins have been squeezed and annual growth rates have slowed to a CAGR of between 4 and 5%. Notwithstanding, MedTech leaders, buoyed by continued but slower revenue growth, and doubtless comforted by a prolonged surge in US equity markets, have not perceived these market changes as being with sufficient acuity to transform their strategies or business models.  Their principal response has been to increase M&A. 
 
M&A main strategic response to market changes
 
Over the past decade M&A has provided MedTech leaders with a means to: (i) increase scale and leverage, (ii) drive stronger financial performance, (iii) obtain a broader portfolio of product offerings, (iv) enhance therapeutic solutions and (v) increase international expansion; without changing their companies’ fundamental manufacturing structures and strategies. According to a January 2018 McKinsey report, between 2011 and 2016, 60% of the growth of the 30 largest MedTech companies was due to M&A. The report also suggests that between 2006 and 2016, only 20% of 54 pure-play publicly traded MedTech companies, “mostly relied on organic growth”.  M&A activity has resulted in bigger MedTech companies but not necessarily better ones. This is because M&A and collaborative relationships have not encouraged healthcare providers to change their strategies and business models and develop powerful data-sharing networks, which help drive integration across the continuum of healthcare.
 
Need for portfolio transformation
 
Encouragingly, the 2018 McKinsey report also suggests that some MedTech companies are beginning to use M&A to acquire “non-traditional” assets, such as software and service companies, to assist them in transforming their portfolios. Notwithstanding, portfolio change in a rapidly evolving and increasingly competitive healthcare ecosystem requires a sound strategic understanding of the potential role that the 4th industrial revolution can provide for MedTech. Given our discussion so far, it seems reasonable to assume that many current MedTech leaders and C-suite executives might not have fully grasped the commercial implications of this revolution for their industry. Portfolio change in the MedTech industry is arguably more likely to be led by executives from, or with an intimate knowledge of, adjacent, service-based companies; those who have successfully employed sophisticated digital technologies and big data strategies to transform their business models and who are now looking to do something similar in MedTech and healthcare markets.
 
The relative slowness of the MedTech industry to transform its strategies and business models is perceived as an opportunity by giant technology corporations. They sense the disruptive potential, just as they do in financial markets due to Wall Street’s inertia to digital change.  For example, in early 2018, Amazon, Apple, Google, and Uber announced their intentions to enter and disrupt the healthcare market by leveraging digital technologies to provide quality healthcare solutions and services at lower costs.
 
Rather than marketing products, MedTech companies are now increasingly being tasked with marketing solutions that can deliver better care at lower prices. The 4th Industrial Revolution is a primary enabler for achieving this. However, given the demographics and the conservatism of the MedTech industry, it seems reasonable to suggest that companies in the sector, which do not adapt, run the risk of becoming simple commodity producers stuck in the middle of a new and rapidly evolving value chain.

 
The 4th Industrial Revolution

The 1st industrial revolution used water and steam to mechanize production, the 2nd used electric energy to create mass production, the 3rd used electronics and information technology to automate production. The 4th industrial revolution, also known as ‘industry 4.0’, is characterized by a fusion of technologies, which is blurring the boundaries between medical devices, drugs, software and patient data and redefining relationships between the physical, biological and digital worlds. These exogenous shifts are likely to demand different strategies, different business models and different leaders for the MedTech industry.
 
Industry 4.0 provides MedTech with an opportunity for portfolio transformation by developing sophisticated data and digitization strategies to enhance company operational and financial performance. Industry 4.0 is driven by greater connectivity via the Internet and computing devices embedded in physical objects and advanced digital technologies, which enable them to send and receive data to help integrate producers, suppliers, business partners and customers; at the same time providing opportunities for MedTech companies to become smarter, more efficient and fully-networked organizations.
 
Key for superior shareholder returns
 
To date, MedTech leaders have been relatively slow to integrate new and evolving digital technologies into their core business operations, although there are encouraging signs that some companies are beginning to do so. Findings of a 2017 report by the Boston Consulting Group, (BCG) suggest MedTech companies are, “masking unsustainably high costs and underdeveloped commercial skills” and relying, “on an outdated commercial model”.  The BCG findings are based on a survey of some 6,000 MedTech employees in commercial functions, more than 100 interviews with MedTech leaders and benchmarking financial and organizational data across 100 MedTech businesses (including nine of the 10 largest companies) worldwide. According to BCG, although the industry overall has made little progress to change its business model and upgrade its skill levels, the companies, which have done so, are winning in the market and generating superior shareholder returns.

MedTech leaders should not mistakenly think that because their companies hold plenty of enterprise data they are implementing industry 4.0 strategies. Often, enterprise data do not provide any competitive advantage whatsoever but are simply a legacy cost of doing business. New sources of data, and the ability to use data’s power, are essential to enhance a company’s competitive advantage. A next-generation enterprise resource planning (ERP) platform, launched by SAP in 2017, is already being used by service companies to provide them with a digital core, which helps to create real-time matrixed data produced by social media, third party information, genetics, the Internet of Things, points of sale, etc.

 
Shift from selling products to selling solutions

To remain competitive in the next decade MedTech leaders will need to employ artificial intelligence (Al), augmented reality, robotics, advanced sensors, the Internet of Things (IoT), blockchain, nanotechnology, 3D printing, petabytes of data, enhanced processing power and storage capacity to help them transform their strategies and business models and enable their companies to evolve from being product-centric to customer-centric, with an emphasis on digitization and the capture and communication of data. Industry 4.0 and the convergence of the physical, biological and digital worlds will fundamentally change MedTech strategies and business models, as decision-making powers continue to shift from manufacturers to other healthcare stakeholders. Critical to this transformation will be those MedTech leaders who are well positioned to ensure that companies remain competitive in their core markets while establishing new markets underpinned by 4.0 technologies.
 
"Out-of-touch leaders" the main cause of company failure

A book published in 2016 entitled Lead and Disrupt suggests that company transformations fail because of out-of-touch leaders rather than competition. According to Michael Tushman, co-author of Lead and Disrupt, “The things that help organizations execute their current strategy - the cultures they build, the structures they forge, the processes that work so well to get today’s strategy executed - actually collude to hold the organization hostage to that soon-to-be-obsolete strategy. The more firms engage in getting today’s work done, it actually reduces the probability of making shifts in innovation and strategy. That is what is so strikingly paradoxical to leaders: The very recipes that work so well for today often get in the way of the future. It’s a challenge to incrementally improve what you’re doing as you’re trying to complement it with something different. The dual strategies are inconsistent.”
 
Takeaways

Over the past two decades MedTech companies have helped to shape healthcare systems in wealthy advanced industrial societies and have been rewarded with commercial success. But just as the fund investment axiom tells us, past performance is no guarantee of future success.

Crucial to the future success of MedTech companies will be their leaders. We have suggested that employing recruiting criteria, which have worked in the past might not guarantee future success. The next 10 years will be an era of unprecedented technological change for MedTech companies when the boundaries between medical devices, drugs, software and patient data become blurred.

Business as usual, which has served the industry well in the past, is unlikely to bring continued commercial success in this new healthcare ecosystem. In recent years, investment in digital healthcare has soared and the momentum towards a digital future has gathered pace. Future successful MedTech leaders will be those who combine a deep understanding of the 4th industrial revolution to leverage sophisticated digital technologies and data to assist them in creating and delivering enhanced healthcare solutions at lower costs, with an ability to keep the legacy manufacturing business running.  

MedTech companies face a stark choice: either appoint leaders similar to those of the past and become challenged or appoint leaders able to integrate new and evolving technologies into the core of the business to create and market cost effective quality healthcare solutions and remain profitable. MedTech leaders might consider adopting the motto: tempora mutantur et nos mutamur in illis.
view in full page
  • A novel drug called niraparib which freezes tumours and can prevent ovarian cancer recurring is now available to NHS patients
  • Ovarian cancer is a silent killer: each year in the UK it affects 7,400 women and kills 4,100
  • Oncologists have called niraparib, which is taken as a daily pill, a “game changer
  • Approval of niraparib is predicated upon a clinical study that enrolled 553 patients with recurrent ovarian cancer
  • The endpoint of the study was progression free survival
  • The study reignited discussion about the relative merits of different metrices used to assess the efficacy of cancer therapies
  • Patient groups and some oncologists suggest health-related quality of life should be given more significance in the measurement of drugs
 
Niraparib made available on the NHS to halt the spread of ovarian cancer

There is some good news for women in Britain living with ovarian cancer. In June 2018 niraparib, a life extending drug, was recommended by the UK’s National Institute for Health and Care Excellence (NICE) for inclusion in the Cancer Drugs Fund, (CDF) which will make niraparib available on the NHS to women living with ovarian cancer, who already have had two or more courses of chemotherapy.  The drug, which was first marketed in the USA in April 2017, is the first PARP inhibitor (described below) taken as a daily pill to be approved in Europe that does not require BRCA mutation or another biomarker testing. (Women with harmful mutations in the BRCA1 or BRCA2 genes have a 10 to 30 times higher risk than normal of ovarian cancer). Niraparib is expected to benefit around 850 UK patients each year at an annual cost of about £58,661 for the 200mg daily dose or £86,786 for the 300mg dose; but is available to the NHS at an undisclosed discount. Some oncologists have heralded niraparib as a “game-changer” because it freezes tumours and can prevent ovarian cancer recurring for 12 to 16 months.
 
In this Commentary

This Commentary: (i) describes niraparib and how it halts the spread of ovarian cancer, (ii) summaries the findings of the clinical study, which is the basis on which niraparib has been approved, (iii) describes questions raised about the endpoints of clinical studies and the growing debate about a trade-off between progression free survival and health-related quality of life, (iv) briefly describes the epidemiology of ovarian cancer, (v) uses video of a leading oncologists to describe the standard of care for the disease, (vi) explains the reasons why ovarian cancer is frequently diagnosed late with more video contributions from leading clinicians, and (vii) emphasises and repeats the signs and symptoms of ovarian cancer in an attempt to help educate women and encourage them, whatever their age, to seek immediate attention from their primary care doctor if they have any tell-tale signs of the disease.
 
How niraparib works

Niraparib is one of a class of drugs known as poly(ADP-ribose) polymerase (PARP) inhibitors and is indicated for maintenance treatment of adult patients with recurrent epithelial ovarian, fallopian tube, or primary peritoneal cancer. Because of the high recurrence rates associated with ovarian cancer maintenance therapy, measured by progression free survival (PFS) rather than overall survival (OS), has become the appropriate treatment for this disease.  Niraparib is a targeted therapy, which uses agents to identify and attack cancer cells while causing minimal damage to normal cells. Such therapies attack cancer cells' nuclei that contain the programs, which differentiates them from normal healthy cells. Each type of targeted therapy works differently, but they all change the way a cancer cell grows, divides, repairs itself, or interacts with other cells.
 
NOVA clinical study

The approval of niraparib is predicated upon findings of an international Phase 3 clinical study called NOVA, which were published in the December 2016 edition of the New England Journal of Medicine. The study sought to evaluate the efficacy of niraparib versus placebo as a maintenance therapy for patients with platinum-sensitive, recurrent ovarian cancer. The double-blind study enrolled 553 patients with recurrent ovarian cancer, who had achieved either a partial or complete response to their most recent platinum-based chemotherapy. The primary endpoint of the study was progression free survival.

Researchers were keen to discover whether having a BRCA mutation affected how well the therapy worked. Approximately 66% of participants did not have BRCA mutations. Findings demonstrated that women with an inherited BRCA gene mutation saw the time to relapse increase from 5.5 months to 21 months compared with chemotherapy alone. Niraparib was also shown to help women without a BRCA mutation, doubling the length of time before recurrence from 3.9 months to 9.3 months. So, niraparib significantly increased progression free survival in patients with or without BRCA mutations as compared to the control group. The results of the study position niraparib as the first PARP-inhibitor to reduce the risk of ovarian cancer progression or death by 73% in patients with BRCA mutations and by 55% in patients without BRCA mutations. Research is ongoing.
 

More data needed
While the NOVA study represents a significant step forward more data is needed before all asymptomatic patients with recurrent platinum-sensitive ovarian cancer can be treated effectively with niraparib and other maintenance PARP inhibitors. The challenge for clinicians is to select the right drug for the right patient at the right time. To decide which patient receives PARP inhibition and at what point in her therapy is challenging and stands to benefit from further research. Until further research is undertaken on niraparib and other PARP inhibitors, patients with advanced ovarian cancer will continue to incur treatment related toxicity without definitive benefits. 
 
Quality of life versus progression free survival

The side effects from approved cancer therapies raise questions about the metrices clinical studies use to measure their endpoints. All drugs have safety risks. The sole reason why a patient would want to take a drug is because it: (i) improves survival, (ii) results in a detectable benefit, (iii) decreases the chances of developing complications or undesirable side effects. Primary endpoints in clinical studies should be something that are important to a patient and can be objectively measured. When clinical studies use surrogate endpoints, similar tests apply. Thus, clinically meaningful endpoints directly measure how a patient feels, functions, or survives and include overall survival (OS), progression-free survival (PFS) and health-related quality of life (QOL).
The NOVA study used progression free survival (PFS) as its primary endpoint. This is an accepted metric for maintenance therapy for advanced ovarian cancer and other metastasized cancers.  Employing PFS instead of overall survival as the primary outcome has the advantage that study completion can be quicker with fewer patients required and it is cheaper. While the NOVA study successfully demonstrated that niraparib helps to stop ovarian cancer returning, it failed to show that the drug reduces health-related quality of life for patients.
You might also be interested in:

After 20 years of the cancer drug Herceptin is less more?
There is some evidence to suggest that women with ovarian cancer might be willing to accept lower progression free survival for enhanced health-related quality of life. A study published the December 2014 edition of Cancer suggested that women with recurrent ovarian cancer were prepared to trade several months of PFS for reduced debilitating side effects of chemotherapy, which include nausea and vomiting. The most common adverse reactions to niraparib, which affect about 10% of patients, include thrombocytopenia, anaemia, neutropenia, leukopenia, palpitations, nausea, constipation, vomiting, abdominal pain, mucositis/stomatitis, diarrhoea, dyspepsia, dry mouth, fatigue, decreased appetite, urinary tract infection, AST/ALT elevation, myalgia, back pain, arthralgia, headache, dizziness, dysgeusia, insomnia, anxiety, nasopharyngitis, dyspnoea, cough, rash, and hypertension.
 
Ovarian Cancer

Epithelial ovarian cancer accounts for 90% of all ovarian tumours. It typically presents in post-menopausal women and is a significant challenge for gynaecological oncologists since most patients are diagnosed when the disease is already advanced and therefore have a poor chance of survival. The natural history of the disease is characterized by a high response rate to primary treatment of debulking surgery followed by platinum-taxane chemotherapy, which is quickly followed by early recurrence and a second-line treatment with platinum; then most patients experience further platinum-resistance and die from the disease. Although ovarian cancer is relatively rare - based on 2013-2015 data 1.3% of women are expected to contract the disease sometime in their lifetime -  it is the 7th most common cancer in women worldwide. In 2012 there were 239,000 new cases of the disease diagnosed globally. In the UK ovarian cancer is the 5th most common cancer in females, the 2nd most common malignant gynaecological disease and the 1st cause of death from gynaecological malignancy. The UK has one of the highest incidence rates of the disease in Europe, affecting some 7,500 women every year, and its survival rates are among the lowest. Every year 4,100 women in Britain lose their lives to the disease, which equates to about 11 women every day. Over the past 2 decades there has been a slowing of the rate of diagnosis of ovarian cancer in the UK, which is partly due to the large number of women having taken the oral contraceptive pill after it was made available on the NHS in December 1961 and is known to have a protective effect. According to the World Ovarian Cancer Coalition, over the next 2 decades the incidence rates of ovarian cancer worldwide is expected to rise by 55% and by 15% in the UK. This is mainly because: (i) post-menopausal women are living longer, (ii) populations are increasing, and (iii) there is a significant increase in the rate of urbanization.
 
The standard of care for ovarian cancer
 
Although advances in research and technology have contributed additional and sometimes more effective therapy options for women with ovarian cancer such as niraparib and other PARP inhibitors, both the American and European guidelines recommend surgery as the initial approach to ovarian malignancies. After surgery, adjuvant chemotherapy is mandatory in cases of suboptimal debulking, advanced stages, or early stages with a high risk of recurrence. Mike Birrer, Professor of Medicine at Harvard University Medical School, Director of Medical Gynecologic Oncology and also Director of the Gynecologic Oncology Research Program at the Massachusetts General Hospital Cancer Center describes the standard treatment for ovarian cancer. “Ovarian cancer is diagnosed surgically. It’s important that the patient undergoes proper diagnostic and staging procedures. This would include an exploratory laparotomy (a surgical procedure, which involves an incision through the abdominal wall to gain access into the abdominal cavity), which would then evolve onto a staging laparotomy, (to determine the extent and stage of a cancer), which would include a TAH (total abdominal hysterectomy), BSO (bilateral salpingo-oophorectomy, which is when either the uterus plus one ovary and fallopian tube are removed, or the uterus plus both ovaries and fallopian tubes are removed), removal of the ovaries and the uterus. The removal of the omentum (a layer of fatty tissue that covers the abdominal contents like an apron; the procedure to remove it is called an omentectomy, which involves removing the uterus, cervix, fallopian tubes and ovaries), and lymph nodes in the regiterial cavity, scraping of the upper abdomen and then a peritoneal lavage (a procedure to determine if there is free floating fluid, most often blood, in the abdominal cavity). This would give accurate staging for the patient and anything less would be considered less than the standard of care. Once the stage is established and the patient has an advanced stage of the disease, which has spread throughout the abdomen or outside the abdomen, the patient would then undergo further therapy. This would inevitably involve a combination of chemotherapy. The specific regimen would depend, in part, upon the surgical results.”  See video below.
 
 
Current options for ovarian cancer maintenance therapy

In addition to niraparib, current options for ovarian cancer maintenance therapy include bevacizumab and olaparib. The former is a monoclonal antibody designed to block a protein called vascular endothelial growth factor (VEGF). Some cancer cells make this protein and blocking it may prevent the growth of blood vessels that feed tumours, which can stop the tumour from growing. Notwithstanding, bevacizumab can only be given once and improves progression-free survival by just a few months. Olaparib is a PARP inhibitor, which blocks how PARP proteins work in cancer cells that have a BRCA gene mutation. Without PARP proteins, these cancer cells become too damaged to survive and die. In the first instance, olaparib was only approved in patients with a germline BRCA mutation, which accounts for about 10–15% of ovarian cancer patients. In 2014, when olaparib was approved in Europe and the USA, it was the first cancer treatment targeted against an inherited genetic fault to be licensed. Subsequently, evidence suggested that the drug could also benefit patients whose tumours have defects that are not inherited.
 
Non-specific signs and symptoms

The unresolved challenge for ovarian cancer is that in its early stage it rarely presents with any symptoms. Compounding this is the further problem that later stages of the disease may present few and nonspecific symptoms, which are commonly associated with benign conditions. Were ovarian cancer detected in its early stage when the disease is confined to the ovary it is more likely to be treated successfully. Ovarian cancer suffers from another challenge because screening for the disease in not an option, as we explain below. Further, often women do not know what symptoms to look out for and primary care doctors misdiagnose the disease especially in younger women. This results in about 80% of ovarian cancer cases being diagnosed late when 60% have already metastasised, which reduces the 5-year survival rate from 90% in the earliest stage to 30%. Signs and symptoms of ovarian cancer include abdominal bloating or swelling, quickly feeling full when eating, weight loss, discomfort in the pelvis area, changes in bowel habits such as constipation, and a frequent need to urinate.
 

A patient’s view
The 3 primary symptoms of ovarian cancer are bloating, feeling full and pelvic pain. Secondary symptoms include fatigue, bowel and urinary issues. In reality women don’t have all the primary symptoms and they may not have any of the secondary symptoms but may have a combination of the 2. The most prevalent symptom is bloating, especially if it persists. If this occurs women should immediately go to their doctors and ask for a CA-125 blood test. And whatever the outcome of the test they should also insist on a TVUS scan. There is no one easy method of diagnosing ovarian cancer and doctors sometime mistake the symptoms for something less serious like irritable bowel syndrome,” says an ovarian cancer patient. In addition to a pelvic examination, the 2 most frequent diagnostic tests for ovarian cancer are transvaginal ultrasound (TVUS), which puts an ultrasound wand into the vagina to examine the uterus, fallopian tubes and ovaries and the CA-125 blood test, which measures the amount of the protein CA-125 (cancer antigen 125) in your blood.
 
Late diagnosis

According to Christina Fotopoulou, Professor of Surgery at Imperial College London and Consultant Gynaecological Oncologist at Queen Charlotte’s Hospital NHS Trust , “Ovarian cancer is a very silent disease. It has a tumour dissemination pattern of very small nodules spread throughout the whole skin of the abdomen. In the beginning these nodules are so small that they go undetected. The nodules are only detected when they get larger and produce water. So, women with ovarian cancer get abdominal distention and water in their tummies, which prompts them to seek advice from their doctors. But then it’s too late because it’s already at a late stage of the disease.” See video below.
 
 
The ‘bar’ is too high to screen for ovarian cancer
 
Hani Gabra, Professor of Medical Oncology at Imperial College London and Chief Physician Scientist and Head of the Oncology Discovery Unit at AstraZenecaUK supports Fotopoulou and says, “Ovarian cancer is often diagnosed late because in many cases the disease disseminates into the peritoneal cavity almost simultaneously with the primary declaring itself. Unlike other cancers the notion that ovarian cancer goes from stages 1 to 3 is possibly a myth. In reality these cancer cells often commence in the fallopian tube with a very small primary tumour and disseminate directly into the peritoneal cavity. In other words, they go from the earliest stage 1 directly to stage 3, which renders screening a significant challenge. This is compounded by the fact that ovarian cancer is relatively rare in the population. So, to be effective a screening test would have to be extremely sensitive and extremely specific, which it does not have to be for commoner cancers. The combination of these makes screening for ovarian cancer extremely difficult to achieve.”
 
 
Takeaways

Ovarian cancer is a devastating disease, which is diagnosed more infrequently and often at a later stage. Patients are typically older, symptoms are non-specific and easily confused with a number of benign conditions. In its earliest and most curable stage, there may not be any physical symptoms, pain or discomfort. Standard treatment is radical and a harrowing experience for women diagnosed with the disease. About 85% of patients experience a recurrence of the disease after their first treatment cycle, which means that they often face repeated bouts of chemotherapy to keep the disease under control. In a significant proportion of cases even after a second round of chemotherapy the cancer can recur. Previously, at this point patients have had limited pharmacological help, but as research advances, this is beginning to change, and some novel and efficacious drugs are entering the market. Niraparib is one of the latest PARP inhibitors, which has demonstrated efficacy in the treatment of advanced ovarian cancer.
view in full page
  • 15 to 20% of breast cancer patients suffer a type of the disease that could benefit from the drug Herceptin
  • Herceptin is very effective and normally administered for 12-months but it is expensive and can cause heart damage
  • New research has found that the treatment period for Herceptin could be reduced from 12-months to 6 without compromising outcomes
  • A 6-month course would reduce the cost of the drug, increase access and potentially reduce the number of patients suffering debilitating side effects
  • The research findings reignited broader concerns about the sustainability of cancer care and the competing interests of patients, producers and providers
  • Herceptin’s patents are expiring and biosimilars are entering the market which is expected to lower costs and increase access
 
After 20 years of the cancer drug Herceptin is less more?

Findings of a phase III clinical study funded by UK government grants and presented at the June 2018 meeting of the American Society of Clinical Oncology (ASCO) suggest that the time a patient needs to spend on Herceptin, (chemical name trastuzumab), a drug widely used to treat an aggressive form of breast cancer, could be halved from 12 to 6 months. This would save insurers, governments, healthcare providers and patients significant sums of money and possibly reduce the incidence of side effects, which can include heart problems.
 
In this Commentary
 
This Commentary: (i) summarizes the findings of the clinical study and some expert reactions to it and (ii) describes the different subtypes of breast cancer and the drug trastuzumab.  The Commentary also broaches a broader concern about the escalating costs of life-saving or life-extending cancer therapies, which show no sign of either slowing or reversing. According to ASCO, in the US, newly approved cancer drugs cost on average US$10,000 per month, with some costing as much as US$30,000 per month. This causes financial hardship for many American patients and their families. In the UK, which has a large devolved public healthcare system, cancer therapies are a postcode lottery because medicines that patients receive depend on whether their local healthcare provider can afford them. In emerging economies, where the prevalence of breast cancer is rising, only a privileged few breast cancer patients have access to trastuzumab. Notwithstanding, patients should gain some comfort from Herceptin’s patents expiring and biosimilar versions of trastuzumab entering the market, which is expected to make the drug cheaper and more accessible.  
 

Breast cancer and HER2

Breast cancer is a heterogenic disease and biomolecular changes in breast cancer involve the expression of genes. The disease is classified according to the 4 subtypes of genes expressed: (i) luminal A, which accounts for 51 to 61% of all breast cancer patients, (ii) luminal B, which accounts for 14 to 16%, (iii) basal-like, which accounts for 11-20% and (iv) the HER2 subtype, which accounts for 15 to 20% of all breast cancer patients and is the focus of this Commentary. Each subtype has different clinical features, different prognoses and different responses to therapies. HER2 protein overexpression is the result of amplification of the HER2 gene and is associated with aggressive tumour growth and consequent high rates of recurrence and mortality in patients. HER2-positive breast cancer is not inherited but is a somatic genetic mutation, which occurs after conception and therefore the new DNA does not enter the eggs or sperm.
 
Trastuzumab the first gene targeted drug
 
Trastuzumab was first approved by the US Food and Drug Administration (FDA) in 1998 and became the first FDA-approved therapeutic antibody targeted to a specific cancer-related molecular marker. The FDA recommended that the drug should be administered for 12 months. Robert Leonard, formerly Professor of Cancer Studies at Imperial College London, UK, and a consultant medical oncologist specialising in breast cancer at the BUPA Cromwell Hospital, the London Clinic and the London Oncology Clinic describes HER2 positive breast cancer and trastuzumab: see video below.  “We like to talk about targeted therapies since we’ve learnt more about the basic biology of cancer, which uses subtle techniques of investigation including biological and immunological profiling of cancers. We now have the ability for new molecules to target specific abnormalities in cancer cells and these can be effective in sublimating standard breast cancer treatments. A good example are Herceptin and Lapatinib, both of which target the HER2 pathway, which is a very important pathway in breast cancer,” says Leonard.
 
Trastuzumab and advanced breast cancer
Trastuzumab’s approval followed 4 randomized clinical studies involving more than 8,000 patients with stages II or III HER2-positive breast cancers. These showed that when trastuzumab was administered for a period of 12 months in combination with or after chemotherapy agents, it potentiated the efficacy of chemo- and immunotherapy; reduced the risk of breast cancer recurrence by approximately 50% and significantly improved survival. In 2000, trastuzumab's use for advanced breast cancer was approved in Europe and has since been approved in a number of countries outside Europe. In 2002 the UK government’s watchdog, the National Institute for Health and Clinical Excellence (NICE), endorsed the use of trastuzumab for advanced HER2 breast cancer.



You might also be interested in:

Cancer drugs that neither improve nor extend lives


Trastuzumab and early stage breast cancer
Shortly afterwards, trastuzumab expanded its use to early stage HER2 breast cancer. Findings of 2 papers in the October 2005 edition of the New England Journal of Medicine (NEJM), suggested that following initial interventions, a 12-month course of trastuzumab in combination with other agents, could also be a lifesaver for those still in the early stages of breast cancer because it reduced the risk of recurrence and death of patients by 46% compared with chemotherapy alone. In this respect trastuzumab has been viewed as a possible “cure” for early stage breast cancer. Based on these findings, trastuzumab’s approval was extended for the treatment of early stage HER2 cancers. Commenting on the 2 studies in the same edition of the NEJM Gabriel Hortoboagyi, a breast cancer specialist from MD Anderson Cancer Center in Huston, USA, said, “the results reported in this issue of the Journal are not evolutionary but revolutionary. . . . . . trastuzumab and the two reports in this issue will completely alter our approach to the treatment of breast cancer.” In September 2013, a time-saving subcutaneous formulation of trastuzumab was approved in Europe, which can be administered in just 2 to 5 minutes, rather than the standard 30 to 90 minutes intravenously.
 
Was the 12 months treatment time a “guess”?
After regulatory approval in 1998 and following some subsequent clinical studies, a 12-month regimen for trastuzumab became the standard of care. Notwithstanding, some oncologists view the 12-month treatment period as a “guess”, and some smaller trials have questioned the duration of treatment.
 
Clinical study and the 2018 ASCO Meeting
 
The study presented at the 2018 ASCO meeting is the largest and most significant study to-date, which suggests that the treatment time for trastuzumab could be halved. The randomized clinical study followed 4,088 women with early-stage breast cancer across 152 sites in the UK for a median of more than 5 years: 2043 received trastuzumab for 6 months and 2045 received the drug for 12 months. The disease-free survival rate at 4 years was 89.4% with 6 months of therapy and 89.8% with 12 months of therapy. In addition, 4% of patients on the shorter treatment dropped out due to cardiac toxicity versus 8% of those treated for a year. Across both groups, cardiac function recovered within a few months following treatment with trastuzumab but patients in the 6-month group recovered more rapidly.

Helena Earl, Professor of Clinical Cancer Medicine at the University of Cambridge, UK and the study’s lead investigator is confident that the study will, “mark the first steps towards reduction of treatment duration for many women with HER2-positive breast cancer." According to Richard Schilsky, ASCO’s Chief Medical Officer, “There’s no reason to not immediately change practice. The findings are persuasive”.

 
Expert reaction to the study

Although oncologists view the study’s findings as “persuasive”, changing the length of treatment time for trastuzumab might not occur quickly. Generally, clinicians appear hesitant to immediately support a shorter duration of trastuzumab as a new standard of care. Some believe that since so few women have died or relapsed after being treated with trastuzumab, longer follow-up may be required to make sure the findings hold up before guidelines are changed. 

My guess is that people will continue to aim for a year of treatment' because of lingering concerns that longer use is better, as a smaller previous study suggested,” says Harold Burstein, a breast cancer expert at the Dana-Farber Cancer Institute in Boston, USA. However, Burstein is mindful that a shorter treatment regimen might increase access to trastuzumab for patients in emerging economies where the prevalence of breast cancer is increasing but where many women cannot afford a 12-month treatment course of the drug.  Other experts suggest that the study’s findings are significant for women who suffer the toxic effects of trastuzumab.

Jennifer Litton, a breast cancer specialist at MD Anderson Cancer Center points to another issue the ASCO study raises. She suggests the study’s findings show just how important it can be to study drugs that are already on the market. “It's really important that we continue to have public funding for clinical trials, so we can continue to ask all of these questions for our patients. Scaling back treatment whenever possible is important to patients,” says Litton.

Industry response
A spokesperson for Roche Genentech, Herceptin's developers, suggested that the ASCO study should be viewed along with several smaller studies, which conclude that the optimum duration for trastuzumab is 12 months. The goal of the treatment, “is to provide people with the best chance for a cure.” Courtney Aberbach, a spokesperson for Genentech, which was acquired by Roche, in March 2009 for US$$46.8bn, suggested that previous studies had not found that a shorter duration worked as well as the longer one. She said the 12-month course was still the only regimen approved for early-stage disease by the FDA and recommended by several international organizations that issue treatment guidelines.

The HERA Trial
Industry views are influenced by a clinical study sponsored by Roche in the expectation that the 12-month trastuzumab treatment period could be doubled. Referred to as the HERA trial, the study was conducted by France's Institut National du Cancer and reported at the 2012 meeting of the European Society for Medical Oncology (ESMO). HERA was an international multi-centre, phase III randomized study involving 5,102 women with early HER2-positive breast cancer. After finishing primary therapy with surgery, chemotherapy and radiotherapy, they were randomly assigned to trastuzumab therapy every 3 weeks for 1 year, 2 years or observation.
 
In April 2012, when the study’s findings were presented at the ESMO meeting, the overall survival rate of the 24-month treatment cohort versus the 12-month cohort was comparable. The principal conclusion of the study was that 12-month treatment remains the standard of care for HER2 positive early breast cancer patients. Results also suggested that shortening treatment of trastuzumab to 6 months may offer a worse result than a 12-month course of treatment. While the study’s findings meant that Roche missed an opportunity to expand sales of trastuzumab on the back of a longer recommended treatment period, they were also a relief to the company, which had faced the risk of losing significant sales revenues from trastuzumab had a shorter treatment period turned out to be as effective as the current standard of 12-months.
 
Unsustainable of cancer care

Cancer treatment has always been expensive, but the costs of newer molecular targeted therapies, such as trastuzumab, have escalated, which significantly reduces access for a lot of breast cancer patients to efficacious drugs. According to a 2015 study by the US National Bureau of Economic Research, each year between 1995 and 2013 the prices of cancer drugs increased 10%. This finding led some health professionals to suggest that cancer therapies are becoming “unsustainable”. In England, NICE has come under intense criticism from patient groups for rejecting numerous cancer drugs for use on the NHS because they were not judged to be cost effective. The UK’s Cancer Drugs Fund, which was set up in 2011 to plug gaps in NHS funding for cancer drugs, overspent its allocated budget by 35% between 2013 and 2015. The debate of the rising cost of cancer therapies is exacerbated by the revenues generated by cancer drugs for big pharmaceutical companies. For example, in 2017 Roche-Genentech recorded annual sales of US$6.8bn for Herceptin alone, which some analysts suggested was driven partly by the duration of the treatment and partly by strong sales growth of the drug in Brazil and China.

When vast revenues from the sale of drugs are mentioned there is negative reaction directed at giant pharmaceutical companies. In their defence drug producers stress the vast costs of developing new drugs and the tenure of patents, which limit the time drug companies have to recoup R&D costs before copycats are introduced into the market. According to the most recent report from the Tufts Center for the Study of Drug Development, and published in the May 2016 edition of the Journal of Health Economics; the cost of developing a medicine from invention to pharmacy shelves is estimated to be some US$2.7bn. Patents protect drugs for 20 years after the initial invention. This exclusivity is designed to promote a balance between new drug innovation and greater public access to drugs, which result from copycat versions.  Notwithstanding, big pharmaceutical companies stress that it can take 8 to 12 years after invention to accumulate enough data to get a drug past the FDA.
 
Biosimilars

For 20 years now Roche-Genentech has benefited from its 90% market share of the HER2-positive global breast cancer market. Notwithstanding, the main EU patent for Herceptin expired in 2014 and is due to expire in the US in 2019. Already, the market has experienced the entry of biosimilar versions of trastuzumab, which are expected to be cheaper and therefore extend patient access to the drug. Biosimilars are not to be confused with generic drugs. Regulators require biosimilars to be “highly similar” to the “reference product” but not exact copies of the biologic medicine. Biologic medicines are comprised of large complex molecules, which may be composed of living material. Here we provide some examples of the biosimilar versions of trastuzumab, which are coming onto the market.
 
Trastuzumab biosimilars
 
In December 2017, a biosimilar version of trastuzumab was approved by the FDA and is marketed in the US as Ogivri. Approval of Ogivri was based on a review of evidence that included extensive structural and functional characterization, animal study data, human pharmacokinetic and pharmacodynamic data, clinical immunogenicity data and other clinical safety and effectiveness data, which demonstrated that Ogivri is biosimilar to trastuzumab. In 2018, Merck Sharp and Dohme (MSD) launched Ontruzan, in the UK, which is Europe’s first biosimilar to Herceptin. Clinical studies have shown Ontruzan to be similar to trastuzumab in terms of its structure, biological activity and efficacy, safety and immunogenicity profile. Studies also showed that in early breast cancer, breast pathologic complete response rates were 51.7% with Ontruzant and 42% with Herceptin, while overall response rates were 96.3% and 91.2% respectively. Mylan and Biocon have launched a biosimilar version of trastuzumab called Canmab in India, and Celltrion, has launched Herzuma, another biosimilar version of trastuzumab in South Korea. According to Mark Verrill, head of the Department of Medical Oncology at the Newcastle upon Tyne Hospitals NHS Foundation TrustUK, “The launch of biosimilar trastuzumab provides a high-quality treatment alternative for patients, while offering significant potential savings for health providers and patients.”
 
Takeaways
 
The clinical study presented at the June 2018 meeting of ASCO suggested that the treatment time for trastuzumab could be reduced from 12 months to 6 without compromising outcomes. This would significantly reduce the cost of trastuzumab and thereby make the drug available to more breast cancer patients. Although the study’s findings are “persuasive” there is a reticence among clinicians to reduce the treatment time of trastuzumab. The ASCO study throws light on the challenges to reconcile the competing interests of patients, healthcare providers and drug companies. While pharmaceutical companies spend billions on R&D they are challenged to reconcile the demands of shareholders and society. Public funds for medical research, while important, are limited especially at a time of relatively slow economic growth and fiscal constraint. Given that there does not appear to be any credible suggestion to curtail the vast and escalating cost of cancer care more generally, the current situation, which incentivises giant pharmaceutical companies to invest in R&D with 20-year patents, appears to be a formula that will prevail for some time to come, and patients will have to wait significant lengths of time before they get access to biosimilars.  
view in full page
  • A Lancet study suggests moderate alcohol use over time can “significantly shorten your life
  • Experts call for the study’s findings to be widely disseminated and discussed
  • A 2010 Lancet study suggested alcohol is more harmful than heroin or crack cocaine
  • Alcohol related harm is a global epidemic caused by a commercial product
  • There are 3.3m deaths each year caused by alcohol use
  • Policies to reduce the harmful effects of alcohol are palliative rather than preventative
  • A few giant alcohol beverages corporations dominate the global market
  • But 50% of the market is in the hands of informal small-scale producers
  • There is a dearth of reliable information on the alcohol beverages industry
  • Public health research has not kept up with the industry’s ability for innovative marketing
  • British drinkers contribute more in alcohol-related taxes than the direct costs of alcohol-related health and crime issues
  
Moderate alcohol use can kill
 
Just when you thought you knew everything there is to know about the harmful effects of alcohol, a study published in the April 2018 edition of The Lancet, brings new evidence to suggest that even modest alcohol use over time is as dangerous as smoking and can “significantly shorten your life”.  The study reinforces the fact that alcohol-related harm is a ‘global epidemic’ caused by a commercial product, which is aggressively marketed throughout the world. Policies aimed at reducing the harmful effects of alcohol have a limited effect and alcohol use continues to be a significant challenge to medicine and society.  
 
In this Commentary

This Commentary discusses some of the reasons why public policies to limit alcohol use fail to dent the vast and escalating burden caused by alcohol use. We begin by describing the findings of The Lancet 2018 study, which highlights the association between regular modest drinking and early death. The study’s findings motivated healthcare professionals to renew calls for lower limits on alcohol use. A study published in The Lancet in 2010 suggested alcohol is more harmful than heroin or crack cocaine. Public policies to reduce the harmful effects of alcohol use are compromised by the competing interests of the principal industry stakeholders. Such policies tend to be orientated towards the demand side of the market and focus on individual consumers and are less engaged with the supply side and large producers. This results in: (i) public policies that are more palliative than preventative, (ii) alcohol use continuing to be a major healthcare and social challenge, (iii) giant alcohol beverages producers receiving a “free pass”, and (iv) governments enhancing their “political capital” by pointing to the millions spent to correct the drinking habits of vulnerable individuals. This ecosystem is further influenced by: (i) the duty and tax revenues governments collect from alcohol use, (ii) public research failing to keep pace with the sophisticated marketing strategies of large drinks companies, and (iii) well resourced, and smart producers’ marketing strategies out-maneuverering government bureaucracies in endeavours to influence the tastes and preferences of individuals.
 
The Lancet study

The contribution of alcohol use to premature death is less well recognised than the connection between smoking, lung cancer and early death. The Lancet 2018 study helps to redress this by improving on previous meta-analyses to define low-risk drinking thresholds, and to suggest that people who consume more than 7 drinks a week can expect to die sooner than those who drink less. According to a February 2018 World Health Organization (WHO) report, an estimated 3.3m people a year worldwide die as a result of alcohol misuse. The harmful effects of alcohol ranks among the top 5 risk factors for disease, disability and death globally, and alcohol misuse is the 5th leading risk factor for premature death and disability worldwide. Most people who die because of their drinking patterns are not alcoholics, but are people who drink regularly over a number of years.
 
The Lancet 2018 study is significant because of its size and methodological robustness.  There is a high degree of comparability in the datasets used by the authors, which combined data from 83 previous studies undertaken in 19 countries, which yielded a cohort of 600,000 current drinkers for analysis. The previous studies used by the researchers to attain their cohort employed similar methods to quantify alcohol use, cardiovascular risk factors, and cardiovascular disease outcomes and cause-specific deaths. All participants in the cohort were from developed industrial economies, displayed similar patterns of alcohol use and none had a known history of cardiovascular disease.
 
The study’s findings imply that drinking alcohol is as harmful as smoking and suggest that there is a significant increase in all causes of death when more than 100g of alcohol (equivalent to about 4 large glasses of wine) is consumed weekly over a period of time. Every glass of wine or pint of beer over the daily recommended limit - the upper “safe” limit in the UK is 5 standard 175ml glasses of wine or 5 pints of beer a week - will cut 30 minutes from the expected lifespan of a 40-year-old and increase the risk of stroke, fatal aneurysm (a ruptured artery in the chest), heart failure and death. A 40-year-old who drinks up to twice that amount (200g or 8 large glasses of wine per week) will shorten their life expectancy by 6 months. Drinking between 200g and 350g (8 to 20 large glasses of wine) a week will reduce their life expectancy by 1 to 2 years, and 40-year-olds who drink more than 350g (>20 large glasses of wine) a week over a period, shorten their lives by 4 to 5 years.
 
Lowering the recommended limits of alcohol consumption
 
According to Angela Wood, from the University of Cambridge in the UK and lead author of the 2018 study, “The key message of this research for public health is that, if you already drink alcohol, drinking less may help you live longer and lower your risk of several cardiovascular conditions.” Although moderate drinking is commonly associated with reducing your chance of a non-fatal heart attack, “This must be balanced against the higher risk associated with other serious, and potentially fatal cardiovascular diseases,” says Wood. According to the researchers the study’s findings support, “limits for alcohol consumption that are lower than those recommended in most current guidelines [and add] long-term reduction of alcohol consumption from 196g per week (the upper limit recommended in US guidelines) to 100g per week or below was associated with about 1–2 years of longer life expectancy at age 40 years”. Co-author Naveed Sattar, Professor of Metabolic Medicine at the University of Glasgow’s Institute of Cardiovascular and Medical Science in Scotland said: "This study provides clear evidence to support lowering the recommended limits of alcohol consumption in many countries around the world."

 
Experts call for lower limits on alcohol use

Commenting on the study’s findings, Tim Chico, Professor of Cardiovascular Medicine at the University of Sheffield,UK, said, smokers lose on average 10 years of their life. “However, we think from previous evidence that it is likely that people drinking a lot more than 43 units (about 14 large glasses of wine a week) are likely to lose even more life expectancy, and I would not be surprised if the heaviest drinkers lost as many years of life as a smoker. . . The study makes clear that on balance there are no health benefits from drinking alcohol, which is usually the case when things sound too good to be true.”

In a commentary in the same edition of The LancetJason Connor and Wayne Hall both professors from the University of Queensland Centre for Youth Substance Abuse Research in Australia, anticipated that the suggestion to lower recommended drinking limits would be opposed by giant alcohol beverages corporations. “The drinking levels recommended in this study will no doubt be described as implausible and impracticable by the alcohol industry and other opponents of public health warnings on alcohol. Nonetheless, the findings ought to be widely disseminated and they should provoke informed public and professional debate,” say Connor and Hall.

 
A 2010 study published in The Lancet claims alcohol is more harmful that heroin

In the November 2010 edition of The Lancet David Nutt, Professor of Neuropharmacology at Imperial College London and co-author of the study suggested that alcohol is more harmful than heroin or crack cocaine when the overall dangers to the individual and society are considered. Nutt was the clinical scientific lead on the 2004-5 UK Government Foresight initiative “Brain science, addiction and drugs”. The Lancet 2010 study suggested that if drugs were classified on the basis of the harm they do, alcohol would be a class ‘A’ drug, alongside heroin and crack cocaine. In 2006 Nutt was dismissed for challenging the UK Government’s refusal to take the advice of the official Advisory Council on the Misuse of Drugs,  which he then chaired.

In answer to The Lancet 2010 study a UK government Department of Health spokesperson said: "In England, most people drink once a week or less. If you're a woman and stick to 2 to 3 units a day, or a man and drink up to 3 or 4 units, you are unlikely to damage your health".
No agreed international limits for alcohol use
 
The reality is that there are no internationally agreed limits on alcohol use and current recommended limits vary significantly between nations. In a study published in the June 2012 edition of the Drug and Alcohol Review  researchers from the University of SussexUK, examined government issued guidelines on alcohol limits in 57 countries and found, “a remarkable lack of agreement about what constitutes harmful or excessive alcohol consumption on a daily basis, a weekly basis and when driving”.

You might also be interested in:

Alcohol use and dementia

In 2016 the UK Government updated its 1995 guidelines  for limits on alcohol use and recommended that neither men nor women should drink more that 14 units of alcohol per week. A unit in the UK is equivalent to 8g of pure alcohol. This means British men are now being told they should drink less than those in Ireland (21.2 British units), Denmark (21), New Zealand (19) and considerably less than the recommended upper limit for men in Spain (35).
 
 
The supply side of the alcohol industry

Current public policies and industry pledges
Although public policies to reduce the harmful effects of alcohol use are aimed at both the individual and population levels, they tend to orientate towards individual problem drinkers. Among the most effective policy options are alcohol taxes, restrictions on alcohol availability and drink-driving countermeasures. The giant alcohol beverages corporations advocate responsible drinking and pledge their commitment to, “supporting balanced initiatives that are linked to their core business functions and those that address wider social and public health issues, relying on initiatives that are evidence based, culturally sensitive, and collaborative.” The drinks producers support the WHO’s Global Strategy to reduce the harmful Effects of Alcohol, and are committed to: (i) reducing under-age drinking, (ii) strengthening and expanding marketing codes of practice, (iii) providing consumer information and responsible product innovation, (iv) reducing drinking and driving, and (v) enlisting the support of retailers to reduce harmful drinking.  

Growth of service economies and the importance of individual preferences
Despite public policies and industry pledges to limit alcohol use, the large and escalating burden of alcohol problems continue to present significant challenges to medicine and public health. In part, this is because population-based public health policies tend to be overlooked in favour of policies oriented towards individual drinkers. This orientation can be explained by globalization.
 
Over the past 40 years globalization has shifted the economic base of developed nations from manufacturing to services, which places greater emphasis on consumer markets and individual preferences. In such a context, efforts to reduce the harmful effects of alcohol use are mainly focused on the demand side of the market, emphasising individual behaviours and preferences; and less focused on the supply side, which is dominated by producers. As a consequence, public policies to limit alcohol use tend to focus on the choices of vulnerable individual drinkers and call for responsible drinking. In effect this provides producers with a “free pass” to pursue and develop their strategies to sustain consumption.
 
50% of alcohol production is in the hands of “informal” small producers
Shifting the policy emphasis to focus equally on the demand and supply side of the alcohol beverages market is not straightforward. Although nearly half of the of the world's alcohol supply is dominated by giant producers, more than 50% is in the hands of ‘informal’ home and local producers. At the national level the industry comprises large and small beer, wine or spirit producers or importers, as well as bars, restaurants and a variety of retail outlets, which markets alcohol to the public. These players have diverging interests as well as interests in common in regard to policy frameworks. There is a dearth of reliable information on the industry and the principal sources of information come from market research firms and business journalism.  
 
Large global fast-growing market
The alcohol beverages market is large, global and fast growing. According to an April 2018 report by Transparency Market Research, in 2017 the market was worth US$1,205bn and is expected to expand at a CAGR of 6.4% and reach US$2,000bn by the end of 2025. Recent consolidation in the industry puts a significant and increasing proportion of alcohol production, distribution and marketing in the hands of a few giant corporations, which dominate national, regional and global markets and wield considerable political influence. Mergers and acquisitions are expected to continue, so the consolidation of the industry is expected to continue.

The market is driven by increasing urbanization, the global young-adult demographic, high and growing disposable incomes and increasing consumer demand for premium and super premium beverages. The latest figures suggest that the average alcohol use in the UK is about 9.7 litres per adult, which compares with 8.8 litres for adults in 34-member countries of the Organisation for Economic Co-operation and Development  (OEDC), and ranks the UK 16th out of the OEDC countries. Since 1970, alcohol consumption has decreased by an average of 15% across OEDC countries, while in the UK it has risen 14% over the same period. Alcohol use has declined 69% in Italy, 48% in France, 36% in Spain and 30% in Germany, but has increased 51% in Ireland. Consumption of alcohol per head in the UK has fallen by about 17% since its recent peak in 2004. But that followed a steep rise.

A study reported in 2015 in the International Journal of Advertising suggests that advertising has little impact on how much we drink, but it is effective at influencing what we drink. ‘Premiumization’ is a term used in the industry to describe how spirit brands have had success convincing consumers that they should drink “higher quality” and more expensive beverages. An example of this is the recent boom in the sale of gin, which corresponded with the industries premiumization strategies that linked gin with “fashionable” early 20th century style.
 
UK alcohol taxes far exceed the costs to public services
 
The “free-pass” enjoyed by alcohol beverages corporations is strengthened by the relative lack of public scrutiny they receive. This might be partly explained by the fact that governments benefit significantly from alcohol related taxes and duty. Consider Britain. In 2016 the UK government made nearly £3.4bn in tax revenue from spirits; beer sales made the UK government £3.3bn in 2017. Some 60% of the price of a pint of beer is taken in VAT and alcohol duty, while VAT on the price of a bottle of gin is 76%. Wine is the biggest earner for the UK exchequer yielding over £4bn in taxes from sales in 2016. These sums accord with a September 2015 Institute of Economic Affairs (IEA) study on alcohol taxes, which suggests that the annual revenue generated from alcohol taxes in the UK is  “illogical and excessive.”  Rather than tax alcohol the UK government taxes drinks. For instance, a unit of alcohol is taxed at 28p if it happens to be in a glass of whisky but only 8p if it is in a pint of cider. Further, if the cider is strong, the tax is 7p but if it is fizzy the tax is 34p. The tax on a unit of alcohol in a glass of wine is 20p, but if wine is sparkling, the tax is 25p. Confused? The structure of alcohol excise taxes is partly restricted by an EU Directive, which sets out different tax rates for different alcoholic beverages.

Revenues from UK alcohol taxes and duty far exceed the actual direct costs of alcohol-related health and crime issues. According to the IEA study, the UK exchequer collects about £10bn a year in alcohol taxes while the direct costs of alcohol related problems to the health, police, prison services, welfare system and judiciary, amount to some £4.6bn per year. Although studies that report cost-of-alcohol data are notoriously unreliable, the IEA suggests that British drinkers contribute about £6.5bn each year to the UK exchequer and believes that, even within the current constraints, the UK tax system could more effectively target problem drinking. In a February 2017 paper the IEA describes a suggested reform of the UK’s alcohol tax policy.

 
Takeaways
 
Findings of the 2018 study published in The Lancet suggest that risks from alcohol start from any level of regular drinking and rise with the amount being consumed and any amount of regular alcohol use can significantly shorten your life. This echoes a 2010 study also published in The Lancet, which suggested that because alcohol is so widely available it is more harmful than heroin and crack cocaine.

This commentary reaffirms the global epidemic of disease, injury, social problems and death caused by alcohol and suggests an explanation why for decades governments have failed to effectively limit alcohol use.
view in full page
  • Dementia has emerged as one of the biggest killer diseases of the 21st century
  • Studies suggest that moderate alcohol use significantly increases the risk of dementia
  • There are no treatments that slow or stop the progression of dementia
  • There are 50m people worldwide living with dementia, by 2050 there will be 132m
  • 0.85m people in the UK are living with dementia and this is expected to rise to 1m by 2025
  • Public policies alone are not sufficient to limit and control alcohol use
  • This increases the importance of a medical solution for dementia
  • Recent innovative research on neurodegenerative disorders provide some hope for future dementia sufferers
 
Alcohol use and dementia

Two significant recent studies described in this Commentary link alcohol use and the onset of dementia. One study published in the June 2017 edition of the British Medical Journal (BMJ) suggests that moderate alcohol use increases the risk of adverse brain outcomes and a steeper decline in cognitive abilities. The other, published in the February 2018 edition of the Lancet Public Health, suggests that excessive alcohol consumption is a significant risk of early onset dementia.

Dementia is a chronic progressive disorder, which has emerged as one of the biggest killers and the only leading cause of death without a treatment that can slow or stop its progression. Of the 529,655 deaths recorded in the UK in 2015, dementia accounted for 61,686 (11.6%): the majority are women, 41,283, compared to 20,403 men.

 
In this Commentary
 
In this Commentary we outline how alcohol affects you, explain its misuse and describe some of the UK’s drinking patterns and their consequent costs. We then suggest that public policies alone, which are aimed at both the individual and population levels to reduce and control alcohol use in order to save lives and reduce healthcare costs, are insufficient. This shifts the burden of a solution for alcohol related dementia onto potential medical treatments. We describe dementia and provide a few epidemiological facts before describing the findings of the 2 studies. We suggest that the studies are significant because there are no effective treatments or cures for dementia despite the vast amounts of money spent on neurodegenerative diseases over the past 2 decades. We end by mentioning a couple of significant UK-based innovative dementia research initiatives, which signal hope for future dementia sufferers.

 

How alcohol affects you and its misuse

Alcohol is a dependence-producing psychoactive beverage, which has been widely used throughout the world for centuries. Problems associated with the consumption of alcohol have been around since the beginning of recorded history. There are 3 mechanisms by which alcohol can affect you: (i) alcohol has toxic effects on your brain and other organs and tissue, (ii) alcohol has intoxicating effects, which manifest themselves in physical and mental impairment and (iii) you may become dependent of alcohol, which means control over your drinking habit is impaired. Alcohol’s harmful impact is influenced by, (i) the volume you consume, (ii) your pattern of drinking and (iii) the quality of the alcohol. When your body takes in more alcohol than it can metabolize, the excess builds up in your bloodstream. Your heart circulates the blood alcohol throughout your body leading to changes in your body’s chemistry and normal functions. 

Studies have consistently suggested that heavy alcohol consumption is detrimental to health and a leading preventable cause of death. There is an increasing awareness of the harmful impact of alcohol misuse on individuals and societies. According to the 2011 World Health Organization’s (WHO) Global status report on alcohol and health, only about 50% of the world's population consumes alcohol, and most users are in the wealthier northern hemisphere countries, although alcohol use is increasingly becoming a problem in emerging economies. Eastern European countries have the highest consumption, riskiest patterns of drinking and the highest levels of alcohol-related deaths and disabilities. According to a February 2018 WHO report, an estimated 3.3m people a year worldwide die as a result of alcohol misuse, which accounts for about as much death and disability worldwide as tobacco and hypertension. 
 
Drinking in the UK and its costs
 
The latest available data suggest that the total alcohol consumption in the UK is 9.5 litres per person aged 15 years and older and 7.8 litres per person on average throughout the entire population in 2015. This forms part of a recent downward trend from a peak of 11.6 and 9.5 litres per head respectively in 2004 and positions the UK 16th out of the 34 OEDC countries. 21m people in the UK do not drink alcohol. According to NHS Digital, in 2014 there were 1.1m hospital admissions in England wholly or partially attributable to alcohol use: more than double the number recorded a decade earlier. In 2014 about 6,600 people in England died from causes related to alcohol and about 115,000 adults received specialist alcohol treatment. Treating alcohol related conditions is estimated to cost NHS England about £3.5bn per year: around 3.6% of its annual budget. About 6% of adults in England are dependent on alcohol. 195,000 prescriptions were written in 2014 by the NHS to treat alcohol dependence at a cost of £3.4m. Over the past decade these prescription costs, measured in 2014 prices, have increased by nearly 80% from £1.9m in 2004.
 
Public policies to curb alcohol use are insufficient

In May 2018, Scotland became the first country in the world to introduce legislation for minimum pricing on cheap, high-strength alcohol. The government said it was an endeavour to cut the consumption of alcohol and save lives. For several decades, similar alcohol reduction and prevention measures have been available at both the individual and population levels in the UK and elsewhere. The most effective include alcohol taxes, restrictions on alcohol availability, and drink-driving countermeasures. Despite the success of these policies, alcohol problems continue to present a major challenge to medicine and public health. In part, this is because population-based public health alcohol control policies tend to be overlooked in favour of approaches aimed at the individual and these have tended to be more palliative than preventative. It is reasonable to assume therefore that, in the near- to medium-term, alcohol related dementia will neither be significantly slowed nor reduced by public policies alone. This shifts the emphasis to a medical solution for alcohol related dementia.
 

Dementia

Dementia is an umbrella term, which describes a group of symptoms that impair your cognitive functions and behavioural abilities severely enough to interfere with your daily life and activities. It is a chronic, progressive and incurable disorder, which ranges in severity from ‘mild’, when it is just beginning to affect your functioning, to ‘severe’, when you depend completely on others for basic activities of living. Dementia involves damage of nerve cells in your brain, which can occur in several areas and affect people differently, depending on the area of the brain affected. Alzheimer's, a neurodegenerative disease, is the most common irreversible cause of dementia, accounting for 60% to 80% of all dementia cases.
The biggest risk factor for dementia is age. We are living in the age of the aged, which represents the successes of improved healthcare over the past century. There are some 50m people worldwide living with dementia. The total number of people with dementia worldwide is projected to increase to 75m by 2030 and 132m by 2050, with the largest proportion of these in low- and middle-income countries. There are 0.85m people diagnosed with dementia in the UK, with numbers set to rise to over 1m by 2025 and to 2m by 2050. 225,000 people in Britain will develop dementia this year. There is a similar story to be told in most wealthy developed countries. For example, in the US an estimated 6m people have Alzheimer's, which equates to 10% of people aged 65 and older. The current annual cost of dementia globally is estimated to be about US$1tr: 1% of global GDP. The annual cost of the condition in the US is US$259bn, which is expected to rise to US$1tr by 2025. Dementia costs the UK exchequer about £26bn each year.
You might also be interested in:

Drunkorexia: a devastating and costly growing condition


Dementia is not an inevitable part of ageing. The notion that dementia is a disease rather than a side-effect of aging has been around for 100 years. Early onset of the disease can begin when people are in their 30s, 40s, or 50s. For example, over 42,000 people under 65 have dementia in the UK. Age, family histories and heredity are factors of dementia that we cannot change. But lifestyle factors such as alcohol use are modifiable risks. There is no cure for the condition and no therapy that slows or stops its progression although some drug treatments may temporarily improve its symptoms.

 
The BMJ study

For some time, scientists have suggested that moderate alcohol consumption could delay the onset of cognitive impairments in ageing, but few studies have examined the effects of modest consumption of alcohol on the brain. This increases the significance on the BMJ study, which includes an analysis of the relationship between moderate alcohol consumption and dementia. Researchers from Oxford University  and University College London studied a cohort of 550 healthy adult civil servants over a 30 year period between 1985 and 2015. At the beginning of the study the average age of the cohort was 43 and none were dependent on alcohol. At regular intervals during the study tests were administered to assess participants’ levels of alcohol consumption and cognition. At the end of the study participants underwent an MRI brain scan, which enabled researchers to analyse correlations between average alcohol consumption, cognition and brain structure. Findings suggest that alcohol use is associated with reduced right hippocampal volume. The hippocampus is a small region of your brain associated with memory and spatial navigation. Poor memory is linked with small hippocampal volume as measured by an MRI scan. The more you drink, the more you are likely to have hippocampal atrophy, which is regarded as an early marker for dementia. Significantly, the study found that even moderate drinkers were 3 times more likely to have hippocampal atrophy than abstainers.

The principal strength of the study is that it is a longitudinal observational analysis of a specific cohort, which yielded detailed information on long term alcohol consumption and cognition and confounding variables. These are “extra” variables, which are important to know in order to avoid bias. Because this was an observational study the researchers were unable to draw any conclusions on cause and effect. Notwithstanding, they were able to conclude that moderate alcohol use is associated with adverse brain outcomes and, “Alcohol might represent a modifiable risk factor for cognitive impairment, and primary prevention interventions targeted to later life could be too late.” In an editorial note in the same BMJ, Killian Welch, a consultant neuropsychiatrist at the Royal Edinburgh Hospital suggests the findings of the study, “strengthen the argument that drinking habits many people regard as normal, have adverse consequences for health.”

 
The Lancet Public Health study
 
The second study from The Lancet Public Health presents findings of a large retrospective study predicated upon data of more than 1m adults diagnosed with dementia between 2008-2013 from the French National Hospital Discharge database. These data provide details on all hospital admissions, including patient demographics, reasons and durations for hospital stays and treatments received. Findings suggest that being hospitalised with alcohol dependence or a health issue caused by continuous heavy drinking is a significant risk factor for dementia. Although the condition is more common in people over the age of 65, the study identified and examined 57,000 cases, which presented with the onset of dementia before 65. Of these, 57% were heavy drinkers, 39% regularly consumed alcohol and 18% had an alcohol use disorder as an additional diagnosis. “Heavy drinkers” were found to be more than 3 times likelier to develop dementia. Excluding alcohol-related brain damage, alcohol use disorders were still found to be associated with a 2 times greater risk of dementia.

According to Michael Schwarzinger, the lead author of the study, who is the director of the French Translational Health Economics Network and a researcher at the Universite Paris Diderot, France, “Chronic heavy drinking was the most important modifiable risk factor for dementia onset in both genders and remained so after controlling for all known risk factors for dementia onset.” While other studies have reached similar conclusions, some research suggest that drinking one or two units of alcohol a day - a small glass of red wine particularly - could be of benefit to brain health and slow the onset cognitive deterioration. Indeed, the Lancet Commission on dementia, associates light to moderate alcohol use with a healthier brain. Schwarzinger and his colleagues however are clear, “Our findings suggest the burden of dementia attributable to alcohol use disorders is much larger than previously thought . . .. Chronic heavy drinking leads to irreversible brain damage [and even] heavy drinkers who got sober didn’t have a lower dementia risk than their peers who remained problem drinkers. . . Additionally, clinicians should be better aware of the role of alcohol use disorders in dementia onset over the lifetime, which seems to be a risk factor often omitted.”
 
Why there is no cure for dementia

Over the past 2 decades pharmaceutical companies, biotech’s, governments, universities and charities have devoted vast amounts of money, time and effort to the dementia challenge, but without being able to develop any credible treatment let alone cure. This partly reflects the complexity of neurodegenerative disorders. The brain is a complex organ, which scientists are still endeavouring to understand. This lack of understanding is one of the main obstacles preventing the development of effective treatments for dementia. The disorder seems to present as a result of an intricate interaction of genes, lifestyle factors and other environmental influences. But, without knowing the exact mechanisms that cause damage, especially in Alzheimer's, it is impossible to target the disease process effectively.

In addition to our rudimentary understanding of the brain there are some specific challenges faced by researchers into neurodegenerative disorders. One is the blood-brain barrier, which is formed by brain endothelial cells, which protect the brain by preventing toxins from reaching it. This presents dementia researchers with a significant challenge because the blood-brain barrier also prevents treatments getting through to the brain and working effectively. Newer immunotherapy drugs, also known as biologics, are large complex molecules or mixtures of molecules, which because of their size and shape may only partly cross the blood-brain barrier. This suggests that dangerous doses would be needed for them to work effectively. And even if the biologics could penetrate the blood-brain barrier and target the proteins causing damage to brain cells, dementia is irreversible and may have started to develop decades before the presentation of symptoms and before the administration of drugs. Further, there is no test for dementia, which means the disorder is difficult to diagnose. This leads some health professionals to suggest that with no effective treatments, early diagnosis has no benefits. A significant proportion of those living with dementia have not received a formal diagnosis, which presents further challenges not least for clinical studies.

 
The amyloid hypothesis

For the past 2 decades dementia drug development has been dominated by the ‘amyloid hypothesis’, which suggests that Alzheimer’s can be treated by attacking the sticky plaques of beta amyloid protein that builds up in patients’ brains. The pharmaceutical industry has lost billions in failed development of drugs designed to target amyloid, and there is still no treatment that affects the underlying progression of the disease. In January 2018 Pfizer, the world’s largest pharmaceutical company, which has spent billions on dementia R&D, announced that it was pulling out of research into drugs to treat complex neurological disorders. Notwithstanding, many pharmaceutical companies, driven by the potential financial gains from finding a medicine that can arrest the disease of 50m people, continue to work on treatments for neurodegenerative diseases.
 
Innovative research endeavours that target dementia

The UK’s 2013 presidency of the G8, (an inter-governmental political forum comprised of the major industrialized democracies) focused on dementia. This resulted in the condition rising up global political agendas and the UK Government unlocking more money for research into neurodegenerative disorders. In 2015 the UK government with the help of JP Morgan, an American multinational investment bank, set-up the Dementia Discovery Fund, with an initial investment of £15m and the commitment from several big pharmaceutical companies to invest. The fund’s strategy was to raise £100m for dementia R&D and move beyond the amyloid hypothesis. It has invested in some 12 start-ups and projects investigating novel ways to stop or reverse the complex biological processes that lead to dementia. In November 2017 the Bill and Melinda Gates Foundation invested US$50m into the fund, which took its total to £130m. Other well-funded novel research projects include the UK Dementia Research Institute, which brings together the Medical Research Council, Alzheimer’s Society and Alzheimer’s Research UK in a £250m initiative involving more than 400 scientists, who are leading efforts to transform the treatment and care for people with dementia.
 
Takeaways

Dementia is a 21st century Damocles Sword positioned to bankrupt healthcare systems in the developed world. Dementia is a vast, fast growing global killer disease effecting about 7% of people living in wealthy nations and costing billions. Despite billions spent on dementia R&D over the past 2 decades there are no viable treatments to either slow or stop the progression of the disorder. Alcohol use has been suggested as a significant contributory factor for the onset dementia. Public policies to curb the use of alcohol are insufficient to significantly dent the vast and escalating burden of dementia. This shifts the emphasis for a solution to medicine. Despite the dearth of medical solutions, things are beginning to change with some recent novel research initiatives specifically targeting neurodegenerative disorders, which might help to lift the Damocles Sword
view in full page
  • More than 50% of cancer drugs available in the UK do nothing to extend or improve the lives of patients
  • The efficacy of drugs was not considered by authorities as a factor in the UK’s higher cancer mortality rates compared with other European nations
  • Recent scientific and technological advances have significantly changed our understanding of cancer biology and impacted cancer diagnoses and treatments
  • Increasingly traditional randomized controlled trials (RCT) are viewed as too long, too expensive and too inefficient

Cancer drugs that neither improve nor extend lives 
 
 
A retrospective cohort study of drug approvals published in the October 2017 edition of the British Medical Journal, (BMJ) found that 57% of cancer drugs approved by the European Medicines Agency (EMA) between 2009 and 2013 and prescribed to UK patients do nothing to extend or improve their lives.
 
Recurring explanations for Britain’s cancer mortality rates lagging those of other European nations make no mention of the quality of cancer medicines. Although cancer drugs approved by the EMA might be expected to affect all European nations equally, drug efficacy is a significant factor in cancer care, and merits consideration. Not least because the ‘revolution’ in molecular science is responsible for the shift from the medicine for crowds to the medicine of molecules; from treating diseases to treating individuals. Traditional regulatory protocols support crowd-science medicine and struggle to find ways to adjust to molecular science.
  
In this Commentary

Before describing the findings of the BMJ study, we briefly provide descriptions of 4 of the 48 drugs scrutinized in the BMJ paper and approved by the EMA. Within this context we describe the role of the UK’s Cancer Drugs Fund (CDF) and its relation to the EMA. We then describe the findings of the BMJ study and mention a cautionary note about the research suggested by BMJ editors. It is not altogether clear that criticism of cancer drugs coming to market without showing any sign that they extend life will put pressure on regulatory bodies to change their protocols before recommending drugs for use in clinics. There is evidence to suggest an opposite position: that randomized controlled trials, the “gold standard” for drug delivery over the past 70 years, are increasingly challenged by molecular science and are changing as a result.
 
4 cancer drugs scrutinized

Four of the 48 drugs scrutinized by the study reported in the October 2017 edition of the BMJ were: 1. Everolimus, which is a type of targeted therapy for breast cancer, (also indicated for kidney cancer and brain tumours). It is taken as a tablet once a day for an average of 5.5 months at a cost of about £18,000 per patient per course. Each year, some 1,500 breast cancer patients are eligible for the drug. Evertlomus is manufactured by Novartis, and sold under the trade name Afinitor. The drug stops some of the growth of cancer cells and slows their spread. Side effects include diarrhoea, constipation, mild nausea or vomiting and weight loss. Evertlomus was approved by the EMA in 2012 without either survival rate or quality of life data. In 2016 it was moved on to routine provision through the National Institute for Health and Care Excellence (NICE), the UK government’s watchdog. 2. Bosutinib, which is a drug taken either as a tablet or a capsule and used by adult patients to treat chronic myeloid leukaemia (CML), which has an abnormal chromosome called the ‘Philadelphia chromosome’. 95% of people with CML have the Philadelphia chromosome. Bosutinib is manufactured by Pfizer, marketed under the trade name Bosulif and is used when other CML treatments no longer work or cause severe side effects. In 2013 bosutinib was approved by the EMA with no evidence that it extended life. Each year about 80 NHS England patients receive the drug at an annual cost per patient of about £45,000. Patients have blood tests before starting and during treatment to monitor the effect of the drug. Up to 85% of patients see white blood cells return to normal levels. The most common adverse reactions, which affect more than 20% of patients, include diarrhoea, nausea, abdominal pain, rash, anaemia, and fatigue. Serious adverse reactions reported include anaphylactic shock. 3.Panitumumab, which is a targeted biological therapy belonging to a group of drugs called monoclonal antibodies. These are drugs that stimulate the body's immune system to act against cancer cells. Panitumumab is used for the treatment of advanced bowel cancer, which has progressed after treatment with other drugs. It is administered via a small cannula into a vein and works by attaching itself to growth factor specific proteins found on the surface of cells and stopping them from attaching themselves to the cancer and triggering the cancer to divide and grow. Panitumumab is manufactured by Amgen and sold under the trade name Vectibix. The drug was approved by the EMA in 2011 without evidence that it extended life.  However, more recent data suggest panitumumab boosts survival by 10 months more than other treatments. Common side effects include skin reactions, diarrhoea, nausea, tiredness and constipation. Each year about 84 NHS England patients are given the drug. In 2017 NICE made panitumumab routinely available at a cost of about £54,000 per year per patient. 4. Bevacizumab, which is a drug that blocks a cancer cell protein that helps cancers to grow by providing them with blood. It  belongs to a class of cancer treatments, which interfere with the development of blood supply to cancers called ‘anti-angiogenesis therapies’. Bevacizumab is manufactured by Rochemarketed as Avastin and costs £42,000 per patient per year. It is administered intravenously, and side effects include mild headache, back pain, diarrhoea, loss of appetite, cold symptoms and dry or watery eyes. Bevacizumab was approved by the EMA in 2009 with no evidence that it extended life and is not available on the NHS. Initially the drug was available in the UK on the Cancer Drugs Fund but was stopped in 2015. Clinical studies show that bevacizumab stops the progression of the disease for an average of 3 months.
 
The UK’s Cancer Drugs Fund

These and the other drugs examined in the BMJ paper were all approved by the European Medicines Agency. This approval permits pharmaceutical companies to market their medicines across Europe. NHS England, however, will not use medicines unless NICE assesses them as showing value for money. The UK’s Cancer Drugs Fund (CDF) was specifically introduced in England in 2011 to provide a means by which NHS England patients could obtain cancer drugs rejected by NICE because they were too expensive. Some of the drugs deemed by the researchers to have shown no benefit are now available to UK patients, but only after pharmaceutical companies reduced their prices.  
Findings
 
The BMJ study is significant because it is one of the only recent studies that has systematically examined evidence associated with the extent of the benefits of cancer drugs approved by the European Medicines Agency. Researchers, from Kings College London and the London School of Economics, who conducted the study assessed 48 cancer drugs for 68 indications approved during the 5 year study period and concluded that, at the time of market approval, there was an improvement in the quality of life  for only 7 of 68 indications and no evidence of a survival gain for 44 indications. However, subsequent evidence showed that life was extended in 3 indications and quality of life was enhanced in 5.
You might also be interested in:

CRISPR positioned to eliminate human papilloma viruses that cause cervical cancer


When drugs did show survival gains over existing treatments the benefits were marginal, the report says. Treatments that improved life expectancy gave patients a median of an extra 2.7 months of life often at significant cost. Notwithstanding, researchers stressed that when someone is dying of cancer even a few extra months of life with loved ones are priceless, and they also understood that it takes time to prove a drug will improve life expectancy. Notwithstanding, researchers suggested that drug firms could be needlessly raising the hopes of cancer patients and exposing them to unnecessary side effects. “At a minimum of 3.3 years after market entry, there was still no conclusive evidence that these drugs either extended or improved life for most cancer indications,” researchers said. Of the 68 cancer indications with EMA approval, and with a median of 5.4 years’ follow-up, 35 had shown a significant improvement in survival or quality of life, while 33 remained uncertain.
 
It is remarkable that cancer drugs enter the European market without any clear data on outcomes that matter to patients and their doctors: longer survival and better quality of life,” said Huseyin Naci, a co-author. “There is a clear need to raise the bar for approving new cancer drugsWhen expensive drugs that lack robust evidence of clinical benefit are approved and reimbursed within publicly funded healthcare systems, individual patients may be harmed, and public funds wasted,” say the researchers. “There is growing concern that the benefits offered by many new treatments for cancer, which are often discussed and promoted as ‘breakthroughs’, are marginal and might not be clinically meaningful to patients, despite rapidly escalating costs,” says Courtney Davis of Kings College London  (KCL) and the lead author of the study.
.
Editors’ note of caution

Editors of the BMJ noted that the study was limited by the EMA’s“incomplete and variable” reporting of clinical studies, which contributed to the “possible overestimation of the proportion of drugs that offer survival or quality of life benefits”. They further suggested that the researchers did not consider the “appropriateness of clinical trial design”, which affects patient outcomes, and they also failed to take into account the “negative studies” for the indications they were studying.
 
Randomized controlled trials

Paradigm shifts in science, rapidly changing technologies, the increasing influence of patient advocacy groups and economic pressures on pharmaceutical companies are conspiring to drive change in randomized controlled trials (RCT), which were introduced 70 years ago to reduce bias when testing for a new treatment. RCTs have reshaped medical knowledge and practice and have become the “gold standard means to assess the clinical efficacy of new or improved cancer therapies. In such procedures participants are randomly assigned to receive either the treatment under investigation or, as a control, a placebo or the current standard treatment. The randomization process helps ensure that the various groups in the study are identical across a number of relevant variables such as age, gender and socioeconomic status. This minimizes the potential for bias. Despite their strengths, only a modest percentage of therapies successfully navigate the regulatory minefield of RCTs from early stage to final approval. It takes between 10 to 15 years for a drug to pass through all the development stages and become approved for prescription. Only 5 in 5,000 drugs that enter preclinical testing progress to human testing, and only 1 in 5 of these is approved for prescription in clinics. The cost of developing a drug that gains market approval is estimated to be about US$2.6bn.  
 
Enhanced understanding of cancer biology

One of the main limitations of cancer care has been our understanding of the biology of the disease, but this is beginning to change. Over the past 2 decades, oncologists have witnessed significant advances in our understanding of cancer biology and major breakthroughs in a number of therapeutic areas, which impact on drug targets and drug development. For example, next generation genome sequencing has increased the application of more robust models for different types of cancers. Cancer immunotherapy has captured the attention of scientists and has become a significant focus for drug delivery, and the development of genome editing technologies such as CRISPR Cas-9 have significantly impacted the direction and progress of nonclinical anticancer drug development.

Personalized medicine approaches have led to significant changes in the way oncology is practiced. Clinical and translational research is adapting to a rapidly changing environment with the intention to effectively translate novel concepts into sustainable and accessible therapeutic options for cancer patients, but not without significant challenges. Some of which are described by Axel Walther a medical oncologist and Director for Research in Oncology at University Hospitals Bristol, see video below. “If we combine patients in clinical trials with the concept of personalized medicine we start to add a lot of variables. This is because we want to target a novel treatment to the individual cancer of a specific patient. The challenge is to find that patient for whom the specific treatment is appropriate. If you have a treatment that addresses a specific abnormality you need to find all the patients with that abnormality. This is relatively easy if it’s a common abnormality but significantly more difficult if the abnormality isn’t common,” says Walther.
 
 
Pressures to change RCTs

Such scientific advances have shifted the emphasis of cancer treatment from histopathologically based methods (the microscopic examination of tissue in order to study the manifestations of disease) to molecular and genetically based treatments, which has significantly improved our understanding of disease processes and advanced drug development. Technologies, which use high-throughput screening of a number of potential target molecules are significant additions to our investigational medicinal product portfolio. Further, enhanced big data assets benefit from enhanced high volume, high velocity, high variety processing and interpretation and increasingly provide new and significant opportunities to conduct large-scale studies with many of the benefits of RCTs but without the expense. Big data techniques also allow for the study of rare cancers effecting small populations, which are often excluded from RCTs because of cost and other constraints. Such scientific and technological advances, together with the rapid expansion of the portfolio of therapeutic modalities, which can be used in various combinations to improve clinical outcomes, challenge traditional RCTs. Further, the costs and increasing complexity of RCTs means that promising drug candidates are sometimes abandoned for economic or logistical reasons rather than for their efficacy. For these reasons regulatory bodies, including the EMA, support changes in RCTs and are encouraging ‘adaptive clinical trials”.
 
 Adaptive clinical trials

Adaptive clinical trials can be used in every phase of drug development. Rather than wait until the end of the trial to analyse data, adaptive trials accumulate and analyse data during the trial period and use results to change the actual direction of the trial. Adapting trials in this way is expected to reduce risks for both patients and pharmaceutical companies, particularly at challenging decision-points, such as dose selection. Significantly, adaptive trials can reduce the total number of patients required to obtain results. This, cuts cost and alleviates time constraints on sponsors, researchers, monitors, and trial sites and increases the capacity of the entire clinical development system. Notwithstanding, a concern is that data from such studies tend to be challenging to provide definitive answers.
 
Takeaways

Researchers drew attention to the fact that a significant number of cancer drugs become available in the UK without evidence that they significantly extend life. The slow pace and the eye-watering costs of traditional RCTs are increasingly being challenged by pharmaceutical companies, governments, scientists, patient advocacy groups and regulators. Fuelling such challenges is the unprecedented pace of change in our understanding of cancer biology, which has significantly influenced drug development and the modalities of treatments. New science is positioned to transform medicine beyond our recognition. But the science itself and the process by which it is transformed into useful medicine collide with RCTs.
view in full page