Medical equipment
Dialysis deal
Dec 4th 2012, 17:30 by C.H. | NEW YORK
AS THE world gets older and wider, it is also getting sicker. Obesity rates nearly doubled from 1980 to 2008. This is bad news for individuals. It is fantastic news for health-care companies, which are jostling to treat patients with chronic disease. On December 4th Baxter, an American maker of drugs and medical devices, said it would pay $4 billion to acquire Gambro, a privately held Swedish firm that makes dialysis equipment. It is the biggest deal in Baxter’s history.
Dialysis is an attractive market, not literally, of course, as it involves flushing the blood of waste when the kidneys are too tired to do it themselves. Nearly half of all cases of kidney disease stem from diabetes—high levels of blood sugar overwhelm the organs. Obesity, in turn, is the main cause of diabetes. Demand is rising quickly: the number of patients receiving dialysis may grow by more than 6% each year from 2011 to 2020, estimates Bank of America Merrill Lynch.
There are two main ways to profit from dialysis. First, a company can sell dialysis equipment. Second, they can provide dialysis services. DaVita, an American company, does the latter. Fresenius Medical Care, based in Germany, does both: in 2010 it sold 55% of new dialysis machines. Baxter and Gambro are the second and third largest sellers of dialysis equipment. Combined, they aim to challenge the German giant.
Baxter specialises in peritoneal dialysis, which can be done at home. A catheter delivers a solution into the abdominal cavity, where the solution absorbs excess fluids and waste, then flushes them out. Gambro, with about $1.6 billion in sales last year, provides equipment for haemodialysis. Usually performed in hospitals, haemodialysis machines filter salt and waste from blood, then deliver clean blood back to the body.
Combined, Gambro and Baxter will provide a broader spectrum of services in more markets. Gambro has a strong presence in Europe. Baxter expects rapid growth in Latin America and Asia. Eventually their combined expertise may improve dialysis products, possibly moving haemodialysis from the clinic to the home.
Baxter expects the deal to close in the first half of next year. It may encounter scrutiny from regulators, wary of reduced competition. But Baxter is taking the long view. “This is the kind of market you want to be in,” Robert Parkinson, Baxter’s chief executive, told analysts on December 4th.
The International Diabetes Federation expects the number of diabetics to grow globally from by 51% from 2011 to 2030, with even faster growth in South-East Asia, Africa, Latin America and the Middle East. This big deal is unlikely to be the last.
http://www.economist.com/blogs/schumpeter/2012/12/medical-equipment
Chronic diseases in developing countries
Growing pains
Poor countries are developing the diseases of the rich, with lethal consequences
Sep 24th 2011 | KAMPALA AND NEW YORK | from the print edition
THE Uganda Cancer Institute is on a hilltop with a fine view of the verdant capital, Kampala. But most of its patients are too ill to stand. They have spent their life's savings for a chance of a cure, but most die within weeks of being admitted. “They come too late,” says Jackson Orem, the clinic's director.
Of Ugandans who die of cancer, 96% never see a medical practitioner. The country's health-care system was designed to treat infectious diseases: the institute's neighbour is a big tuberculosis unit. Non-communicable diseases such as cancer, diabetes, and heart and respiratory ailments have not been priorities. Dr Orem's institute has the only cancer unit for the country's 34m people. Kidney failure (a result of diabetes) is a death warrant. Uganda has only seven dialysis machines. The cheapest transplant (in India) costs $40,000.
Time was when people in poor countries were too hungry and hardworking to be obese, could not afford cigarettes and mostly died before the ailments of ripe middle age kicked in. Non-communicable diseases were a rich-world problem. Not any more. Affluence and urbanisation mean new kinds of unhealthy lifestyles. Developing countries already bear more than 80% of the burden of chronic illnesses. Their share will grow—at a time when older diseases are still ravaging the poor. In India over two-fifths of children under five are malnourished, yet obesity is mushrooming. The leader of the main opposition party, Nitin Gadkari, is the latest public figure to be fitted with a gastric band.
Old and new diseases compound each other. Diabetics are three times as likely to contract tuberculosis. Burkitt's lymphoma, a cancer common in equatorial Africa, is linked to malaria. HIV patients on antiretroviral treatment are at a higher risk of developing diabetes and cancer. Two-thirds of Mr Orem's cancer patients in Uganda also have HIV. “None of the HIV resources went to cancer—a very big mistake,” he says. Julio Frenk, dean of the Harvard School of Public Health, highlights the contradiction between spending thousands of dollars on each patient with AIDS but not offering “pennies” for those with diabetes.
The World Health Organisation expects deaths from non-communicable diseases to rise by 15% between 2010 and 2020, with jumps of over 20% in Africa and South-East Asia. The number of Chinese diabetics is expected to double by 2025. Even in sub-Saharan Africa, chronic illnesses are likely to surpass maternal, child and infectious diseases as the biggest killer by 2030. Most of them stem from sugar, fat, smoke and sedentary lifestyles. But they also include sickle-cell disease, a blood disorder that is the biggest non-communicable killer of Africa's children. It is easily treatable, but almost always goes undiagnosed.
The countries concerned are woefully unprepared. Their health-care systems are designed for acute problems, not least because that is what foreign donors pay for. Less than 3% of aid for health goes to chronic illnesses. Many patients without health insurance delay treatment until it is too late. Many of the drugs needed are no longer covered by patents, but tariffs, poor distribution and high mark-ups still make them costly and scarce. The demands on health authorities are also greater. The right jab can protect a child for life, but chronic diseases may require lifelong medication. A big cause of diabetes is unhealthy diet—but that stems from a complex overlap between brain chemistry and food-industry practice. Even rich countries find this hard to change.
A feeble response ensures that non-communicable diseases kill people earlier in poor countries than in rich ones. This has a grave impact not just on health, but on growth. According to the World Economic Forum, poor and middle-income countries will lose $7.3 trillion in output from heart disease, cancer, diabetes and lung disease by 2025 (see chart)—an annual loss of about 4%.
So far the world's response has been to have meetings, most recently a UN summit in New York on September 19th-20th. The only other summit devoted to health was on HIV in 2001. A sense of crisis then brought a decade of dramatic progress. Heart disease does not arouse the same passion. The meeting passed a “political declaration”, but could not agree on targets for reducing non-communicable diseases. The declaration's wording on drugs was opaque, reflecting stalled negotiations.
With no clear global lead, countries muddle along. Mr Orem's institute in Kampala spends most of its money on drugs. He says a budget rise from $2.5m to $8m would help to train nurses and improve palliative care. But money is scarce and even the simplest tasks are tricky. It can take a month for a patient outside Kampala to get results from a biopsy.
Ala Alwan of the World Heath Organisation suggests that even simple steps can make a difference, such as reducing salt in foods, offering inexpensive drugs and raising tobacco taxes. This last is perhaps the single best way of curbing cancer and diseases of the heart and lungs, as well as raising money for health care. But James Sekajugo of the Ugandan health ministry says it is hard to fight the tobacco industry: “a very rich group here”. His country is trying to stop cancer before it starts. The ministry is considering spending more on vaccines against cervical cancer, one of the most deadly cancers for women.
Some hope to build on arrangements in place for treating HIV (itself now a chronic condition, not a death sentence). A programme in western Kenya called AMPATH once treated only HIV patients. Now it offers care for those with such illnesses as cancer and diabetes. Its door-to-door screening programme for HIV now tests for blood pressure and blood sugar. America's PEPFAR (the President's Emergency Plan for AIDS Relief), is trying to fight HIV by boosting broader health care.
The most sustainable efforts will be those that provide care and make money, too. In India Dr Mohan's Diabetes Centres, a business, charges middle-class patients to subsidise care for the poor. Eli Lilly, an American pharmaceutical giant, is testing models for diabetes treatment in countries such as India, South Africa and Brazil (it also provides free insulin to AMPATH in Kenya). Help now, it reckons, and profit later. Novo Nordisk, the world's biggest insulin manufacturer, is especially ambitious. In China it has given training to doctors and education for diabetics. Last year the firm controlled 63% of China's insulin market. Now Lars Rebien Sorensen, its chief executive, wants to replicate the programme in Indonesia, Malaysia and Vietnam. Chronic diseases are already a huge market. Sadly, it is also a growing one.
Of Ugandans who die of cancer, 96% never see a medical practitioner. The country's health-care system was designed to treat infectious diseases: the institute's neighbour is a big tuberculosis unit. Non-communicable diseases such as cancer, diabetes, and heart and respiratory ailments have not been priorities. Dr Orem's institute has the only cancer unit for the country's 34m people. Kidney failure (a result of diabetes) is a death warrant. Uganda has only seven dialysis machines. The cheapest transplant (in India) costs $40,000.
Time was when people in poor countries were too hungry and hardworking to be obese, could not afford cigarettes and mostly died before the ailments of ripe middle age kicked in. Non-communicable diseases were a rich-world problem. Not any more. Affluence and urbanisation mean new kinds of unhealthy lifestyles. Developing countries already bear more than 80% of the burden of chronic illnesses. Their share will grow—at a time when older diseases are still ravaging the poor. In India over two-fifths of children under five are malnourished, yet obesity is mushrooming. The leader of the main opposition party, Nitin Gadkari, is the latest public figure to be fitted with a gastric band.
Old and new diseases compound each other. Diabetics are three times as likely to contract tuberculosis. Burkitt's lymphoma, a cancer common in equatorial Africa, is linked to malaria. HIV patients on antiretroviral treatment are at a higher risk of developing diabetes and cancer. Two-thirds of Mr Orem's cancer patients in Uganda also have HIV. “None of the HIV resources went to cancer—a very big mistake,” he says. Julio Frenk, dean of the Harvard School of Public Health, highlights the contradiction between spending thousands of dollars on each patient with AIDS but not offering “pennies” for those with diabetes.
The World Health Organisation expects deaths from non-communicable diseases to rise by 15% between 2010 and 2020, with jumps of over 20% in Africa and South-East Asia. The number of Chinese diabetics is expected to double by 2025. Even in sub-Saharan Africa, chronic illnesses are likely to surpass maternal, child and infectious diseases as the biggest killer by 2030. Most of them stem from sugar, fat, smoke and sedentary lifestyles. But they also include sickle-cell disease, a blood disorder that is the biggest non-communicable killer of Africa's children. It is easily treatable, but almost always goes undiagnosed.
The countries concerned are woefully unprepared. Their health-care systems are designed for acute problems, not least because that is what foreign donors pay for. Less than 3% of aid for health goes to chronic illnesses. Many patients without health insurance delay treatment until it is too late. Many of the drugs needed are no longer covered by patents, but tariffs, poor distribution and high mark-ups still make them costly and scarce. The demands on health authorities are also greater. The right jab can protect a child for life, but chronic diseases may require lifelong medication. A big cause of diabetes is unhealthy diet—but that stems from a complex overlap between brain chemistry and food-industry practice. Even rich countries find this hard to change.
A feeble response ensures that non-communicable diseases kill people earlier in poor countries than in rich ones. This has a grave impact not just on health, but on growth. According to the World Economic Forum, poor and middle-income countries will lose $7.3 trillion in output from heart disease, cancer, diabetes and lung disease by 2025 (see chart)—an annual loss of about 4%.
So far the world's response has been to have meetings, most recently a UN summit in New York on September 19th-20th. The only other summit devoted to health was on HIV in 2001. A sense of crisis then brought a decade of dramatic progress. Heart disease does not arouse the same passion. The meeting passed a “political declaration”, but could not agree on targets for reducing non-communicable diseases. The declaration's wording on drugs was opaque, reflecting stalled negotiations.
With no clear global lead, countries muddle along. Mr Orem's institute in Kampala spends most of its money on drugs. He says a budget rise from $2.5m to $8m would help to train nurses and improve palliative care. But money is scarce and even the simplest tasks are tricky. It can take a month for a patient outside Kampala to get results from a biopsy.
Ala Alwan of the World Heath Organisation suggests that even simple steps can make a difference, such as reducing salt in foods, offering inexpensive drugs and raising tobacco taxes. This last is perhaps the single best way of curbing cancer and diseases of the heart and lungs, as well as raising money for health care. But James Sekajugo of the Ugandan health ministry says it is hard to fight the tobacco industry: “a very rich group here”. His country is trying to stop cancer before it starts. The ministry is considering spending more on vaccines against cervical cancer, one of the most deadly cancers for women.
Some hope to build on arrangements in place for treating HIV (itself now a chronic condition, not a death sentence). A programme in western Kenya called AMPATH once treated only HIV patients. Now it offers care for those with such illnesses as cancer and diabetes. Its door-to-door screening programme for HIV now tests for blood pressure and blood sugar. America's PEPFAR (the President's Emergency Plan for AIDS Relief), is trying to fight HIV by boosting broader health care.
The most sustainable efforts will be those that provide care and make money, too. In India Dr Mohan's Diabetes Centres, a business, charges middle-class patients to subsidise care for the poor. Eli Lilly, an American pharmaceutical giant, is testing models for diabetes treatment in countries such as India, South Africa and Brazil (it also provides free insulin to AMPATH in Kenya). Help now, it reckons, and profit later. Novo Nordisk, the world's biggest insulin manufacturer, is especially ambitious. In China it has given training to doctors and education for diabetics. Last year the firm controlled 63% of China's insulin market. Now Lars Rebien Sorensen, its chief executive, wants to replicate the programme in Indonesia, Malaysia and Vietnam. Chronic diseases are already a huge market. Sadly, it is also a growing one.
from the print edition | Internationa
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