The end of abundant times for radiologists?
empora mutantur, nos et mutamur in illis: "Times change, and we ourselves change with them", the ancient Romans used to say. What holds true for life in general, is also true for life in radiology.
The last twenty-five years have brought permanent change and improvement to medical imaging. Diagnostics have become faster and easier with x-ray computed tomography, ultrasound, digital subtraction angiography, single-photon emission tomography, magnetic resonance imaging, etc. Contrast agents have permitted new diagnostic insights unknown and unexpected in the 1950s and 1960s.
Not only did patients and doctors benefit from this development, but a massive medical imaging market that was created, which employed an increasing number of people, and provided huge profits for many companies. In the pharmaceutical industry, profit margins of 50% or higher were common.
The last ten years, however, have also seen permanent changes in internal and external company structures and players in the game. Some companies have disappeared, others have grown, and new ones have entered the marketplace. To remind you of just a few: Technicare and Elscint were taken over by General Electric, Diasonic’s MRI division by Toshiba, and GE’s MR spectroscopy division by Bruker; Picker and Philips merged and split immediately afterwards; Kranzbühler Ultrasound became part of GE; the majority of Kretztechnik Ultrasound is now owned by Medison of Korea; the radiological part of Sterling-Winthrop was bought by Nycomed, which, in turn, became Nycomed-Amersham, then Amersham, just to be taken over by GE. Squibb Diagnostics was acquired by Bracco and Medrad by Schering (which was bought by Bayer). Abbott Laboratories has emerged as a completely new player. This list continues and can easily fill pages.
Many of the small and big pharmaceutical players are for sale – even those considered a as steady as a rock in the stormy seas of the radiological business. It is foreseeable that more contrast agent companies will be taken over by others or just disappear. What happened from the late 1980s until today to the equipment manufacturers is now also happening to the contrast agent companies.
Destabilization of the x-ray contrast media market lies ahead because many patents will expire and some of the new developments seem unlikely to fulfil their promise. The MRI contrast agent market has not taken off as predicted and planned, and the ultrasound contrast media market which was considered the boom market of the next ten years, seems unpredictable after the experience with MRI. In addition, new ideas in nuclear medicine seem to be emerging – and nobody knows how these new products will integrate into the limited contrast agent market.
Thus, although the market is growing as a whole at 5-6% (or more) per year, the pessimists among the forecasters predict that the profit margins will decrease. Consolidation and individual companies' desire to gain and maintain a larger market share will prevail in the second half of the 1990s and well beyond the year 2000.
On the other hand, there are optimists predicting a doubling of the contrast media market over the next ten years, but they are looked upon with sceptic eyes.
Some years ago, lower levels of profitability placed pressure on the equipment manufacturers which was partly redirected to the radiologists and is felt now by the radiological community. One example: since the companies could not pay any more for expensive commercial exhibitions at meetings, a number of congresses have disappeared or their style has been altered.
Vendors are also responsible for the merger of the two major magnetic resonance societies, the Society of Magnetic Resonance in Medicine (SMRM) and the Society for Magnetic Resonance Imaging (SMRI) into one large organization, the International Society for Magnetic Resonance in Medicine (ISMRM) with one annual meeting instead of two.
Because most radiological conferences depend on the goodwill of commercial sponsors, meeting organizers have to bend to the new rules, which also include more direct influence upon the contents of formerly “independent” scientific meetings, their speakers and chairmen.
This development, however, has not been welcomed by everybody in the radiological community. There are already two new societies devoted to clinical MRI and cardiovascular MRI.
From bribery to continuing education …
There is another aspect with a similar connection. Bribery is a taboo subject, not only in radiology. Usually company representatives shy away from discussing this topic, but everybody knows that it exists. Of course, the boundaries between straightforward corruption and small gifts without direct or indirect compensation are often indistinct.
Fortunately, outright corruption is uncommon in most countries. However, there have been and still are “fringe benefits”, which can mean anything from sponsored travel to the Bahamas in some countries to cash payments in others.
On the other hand, in some respects support from companies has brought major advantages to radiologists and their patients over the past few decades. In particular contrast agent manufacturers have been the most generous supporters of radiological events all over the world. Large parts of continuing radiological education have been subsidized by them – without commercial support continuing education would be extremely difficult because there is hardly any other source to finance it.
Still, the questions remain: Where does bribery start? Should companies support education and training of radiologists? Can company-sponsored training be regarded as corruption?
As long as there was enough money for everybody, these questions were merely rhetorical. All involved got their share.
But as times have changed, so have acquisition and buying procedures. Today, often it is not the radiologist but the hospital pharmacist or one of the local health administrators who is in charge of buying contrast agents, equipment, and accessories – and they, most likely, buy cheapest without taking into account possible training or continuing education of radiologists. If they are asked: “Do you want to pay an extra 10% for x-ray equipment or contrast agents if the delivering company pays for the radiologists’ continuing education?” you can be assured that the answer will be: “No.”
Many radiologists do not want or cannot afford to pay directly for their continuing education or additional training. Residents and radiological specialists all over Europe have profited from the generosity of companies. For some, perhaps for many, these times might be over soon.
Some radiologists are so spoiled by companies that they do not consider paying for continuing education expenses or for educational tools themselves. They rather expect to receive them free of charge from companies. There might be a rude awakening. This will change in the future and the question will arise whether companies will drop these efforts or whether they will expect that their customers pay for educational tools such as books, CD-ROMs and training courses.
Because the power is where the money is, sales strategies in general will change in the future. If hospital administrators buy machines and contrast agents, small gifts will be made to them – there might even be continuing education programs in hospital administration sponsored by equipment manufacturers or contrast agent companies. Better training for them can also be a sales argument. There are already numerous conferences on cost effectiveness sponsored, in part, by the small and big commercial players.
… and from courtesy research to necessary research
It takes at least eight to twelve years to develop a new contrast agent; and only one in ten developmental drugs will finally reach the market. The developing costs are somewhere between DM 200 million and DM one billion. Only big companies can afford this because larger research units and larger product portfolios spread the risk of failures in research and development. However, even they have started feeling the pressure.
Many of them have not had a strict enough cost control for R&D. Their R&D was uncoordinated, the development of new drugs far too expensive, and often the resulting products could not be sold. Today, many companies are trying to cut costs drastically and to reduce development time to six or, at maximum, eight years.
Ten years ago, pharmaceutical companies would perform their preclinical animal studies in the United States, for instance, and their patient studies in Germany. German universities were cooperative, thorough, and fast in running and completing such studies. Today, this has changed. Many countries with established research centers have become too expensive and at the same time too bureaucratic. Applied research is moving out. Clinical and preclinical third party research funds – condemned twenty years ago, heralded as the savior of the academic financial crisis ten years ago – are drying up.
As in production, companies use cheaper countries for research. One hears statements from executives of manufacturers of pharmaceuticals and of medical equipment that clinical or applied studies in Hungary or the Czech Republic can be of the same quality as studies in Germany or Switzerland – but they are usually faster and less expensive. The people involved are said to show more interest and zeal and to be more conscientious than their counterparts at West European universities.
Furthermore, courtesy research will be hard hit in the future.
“You buy my product and I pay you to do some research with it,” will become rare in the coming years since this kind of “research” is a sales tool. Dropping profit margins and the loss of power which the now replaced radiological purchasers possessed earlier will terminate this kind of superficial but “prestigious” research in certain countries.
In addition, even necessary research activities at university departments will be cut. Although companies will increasingly delegate R&D activities and contract research to external institutions, and, in addition, buy results to save money within their own infrastructure, only specialized institutes and companies with an outstanding track record in quality performance and speedy delivery of results will survive in this game.
During the last fifteen years it has become apparent that small companies with 5 - 10 people on their payroll which are willing to take risks and develop new ideas might take over – there are a number of examples in the pharmaceutical industry, in hardware and, especially, in software development.
Because most universities and large hospital departments are inflexible and lack the auxiliary infrastructure necessary for efficient contract research, they will not be able to compete and be increasingly dependent on state or different third party funding which, in turn, is becoming scarce, too. It seems as if the fat years are finally over.