Atlantic Insight, by southeast New Brunswick's W.E.(Bill) Belliveau who analyzes and comments on matters of public policy and the social and economic decisions taken, by all levels of government from local to global. Atlantic Insight Blog is a commentary on current affairs and changes in the marketplaces and/or in the business world. The impact of policy, decisions and changes are explored for their impact on the citizens of Atlantic Canada. You are invited to add your comments.
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Saturday, July 18, 2009
Another CF-105 Arrow in the making…
A medical isotope is a small quantity of radioactive material which is injected into people to detect, diagnose, treat or evaluate serious illnesses such as cancer and heart disease. Millions of these procedures are performed around the world every year with approximately 70 to 80% of them using a substance called Technetium which is produced in nuclear reactors.
The Technetium isotope injection targets specific organ systems such as the heart or goes to specific disease sites in the body. Sophisticated imaging devices are then used to pinpoint the exact location of the disease and track its biological activity. The results of these tests better inform doctors on the state of a disease in patients, help identify the best treatment for them and then monitor response to their treatment.
The vast majority of the world's supply of medical isotopes is produced in nuclear facilities located in Australia, Belgium, France, South Africa, the Netherlands and Canada. Until its recent closure for repairs, the Chalk River plant in Ontario produced about one third of the world's supply. The shutdown is having a major impact on medical care throughout the world. To compound matters, Prime Minister Harper has announced that Canada will get out of the business in the next few years.
Every year, more than 46 million people around the world benefit from medical tests involving medical isotopes. The concern about production losses is that patients will not receive the vital testing they need to detect and treat life-threatening diseases at the earliest stages. Early detection increases the likelihood of better outcomes and survival. I'm told that delayed testing results in delayed treatment, puts patients at risk and increases the cost of treatment.
AECL shut down the Chalk River reactor on May 15th after discovering a heavy-water leak. Officials estimate it will be at least six months before it´s up and running again.
Coincidentally, Mr. Harper has decided that the federal government will sell off Crown-owned Atomic Energy of Canada Ltd. He plans to spin off AECL´s profitable nuclear reactor business as part of a major restructuring that would lead to private-sector ownership of the company´s research facility in Chalk River.
The stage for that policy-shift was set last year when Harper's Conservative government announced it would scrap two next-generation Maple reactors, meant to replace the aging reactor at Chalk River. The Maples were millions of dollars over budget and years behind schedule when the Tories pulled the plug.
"It was a difficult decision" said Harper. "But we can´t spend hundreds and hundreds of millions of dollars and never produce an isotope".
A worldwide shortage of isotopes is causing suppliers to dramatically hike their prices. The cost of bone scans in Canada has soared by as much as 50% since May. It's expected that prices will rise again in August when Covidien, a large global healthcare company and diagnostic-imaging agent raises its prices by another 40%, all of this in a strained global economy.
I know nothing about the economics of isotope production but I do know that medical isotopes represent a $4 billion market. I find it difficult to accept the notion that Canada would abandon a market of this size when it has a one third share, demand is growing and prices are rising. There are few if any markets in the world that can boast $4 billion in revenues. There are fewer markets where Canada has a one third share and even fewer where prices are rising.
The extended shutdown of the troubled nuclear reactor at Chalk River has the U.S. government ready to invest millions to get back into the business of medical isotopes, a move that could eventually push Canada out of the business. An official from the U.S. National Nuclear Security Administration said recently that the outage at Canada's Chalk River reactor, which traditionally has filled about 60% of U.S. demand, has prompted a "supply crisis" that has captured the attention of officials in the White House.
The U.S. has taken the hint from Mr. Harper's announcement that Canada is getting out of the business of isotope production. His policy may cost us dearly. The Americans weren't looking to abandon Canada's isotope supply until Harper forced them to do so. If the United States decides to make its own isotopes, there would be little incentive for Canada to reverse its non-production decision. If this major customer disappears, so might the nuclear scientists, technicians and researchers in Canada's nuclear industry. Remember the CF-105 Arrow!
If Canadians become dependent on the United States for medical isotopes, our dependence will likely increase cost for our hospitals, our medical system and ultimately taxpayers. Market value of AECL could also take a big taxpayer hit.
Is this good strategy or just another example of ideology run amuck?
W.E. (Bill) Belliveau is a Shediac resident and Moncton business consultant. He can be contacted at bill.bellstrategic@nb.aibn.com
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