Cancer Blaster Pits U.K. NHS Against Private Investors

Photographer: Nelson Ching/Bloomberg

Evidence for proton therapy’s benefit is limited, except in pediatric brain and spinal tumors, where research has shown it reduces damage such as cognitive decline and deafness. Close

Evidence for proton therapy’s benefit is limited, except in pediatric brain and spinal... Read More

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Photographer: Nelson Ching/Bloomberg

Evidence for proton therapy’s benefit is limited, except in pediatric brain and spinal tumors, where research has shown it reduces damage such as cognitive decline and deafness.

The U.K.’s state-run health system, often criticized for not funding innovative treatments, wants to build the country’s first football-field-sized proton-beam cancer therapy centers. Private investors may beat the government to it.

The U.K. is behind other nations in Europe in offering the therapy and now sends about 100 patients a year who qualify for it to the U.S. The government is poised to decide within weeks whether to spend as much as 250 million pounds ($380 million) on two centers, with the ultimate goal of saving the National Health Service money by cutting treatment cost almost in half.

At the same time, at least three private health-care companies plan to build their own machines, seeing a lucrative opportunity to treat both NHS and privately insured patients. In the U.S., a single machine, though breathtakingly expensive, can generate as much as $50 million in annual revenue.

“This is the biggest medical device in the world and probably the most expensive as well,” says Jan de Kerpel, an analyst at KBC in Brussels who covers Ion Beam Applications SA (IBAB) of Louvain-La-Neuve, Belgium, the biggest builder of proton therapy centers. “It is much more expensive than standard therapy by order of magnitudes.”

The NHS, which makes up the bulk of U.K. health-care spending, has signaled it isn’t interested in working with private hospitals, preferring to keep such facilities under its own control.

Good Investment

“We aren’t pursuing” partnerships with the private sector, Adrian Crellin, the NHS clinical leader for proton therapy, said in an interview. “It would pull the rug out from under the NHS efforts.”

Still, Feroz Agad, an Atlanta-based financier who controls SAH Global, plans to build a center in the U.K. “regardless of whether the NHS sends us patients.” Treatment would cost about 60,000 pounds, compared with the 110,000-pound cost of sending patients to the U.S., Agad said.

The contest echoes U.S. hospitals’ rush to be among the first to offer the treatment which has become a mark of prestige. Many have concluded that even with the hefty price-tag, proton-beam facilities are good investments because they draw in patients and fees are lucrative.

The devices rely on huge particle accelerators, which use magnetic fields to increase the energy in protons. It then shoots a concentrated beam of protons at a tumor to damage the DNA in its cells so they can’t reproduce.

Proton therapy spares more of the surrounding tissue and reduces side effects in patients, including later development of secondary cancers associated with existing radiation exposure, proponents say.

Limited Evidence

Still, evidence for proton therapy’s benefit is limited, except in pediatric brain and spinal tumors, where research has shown it reduces damage such as cognitive decline and deafness, said Ezekiel J. Emanuel, chair of medical ethics and health policy at the University of Pennsylvania’s Perelman School of Medicine in Philadelphia and a former White House health-care adviser.

“Lots of places are building them where the case is low to non-existent,” Emanuel, who trained as an oncologist, said in a telephone interview.

The U.S. has 11 high-energy proton beam therapy centers and plans another 13; Europe has 12 with a dozen more proposed, according to the website of the Particle Therapy Co-Operative Group, an industry body.

“We would be very keen for there to be some further supply in the U.K.” for cancer treatment options, said Katrina Herren, medical director of Bupa Health Funding, part of health insurer Bupa. “Our members should be able to get it in the U.K. but it needs to be proven.”

U.K. Funding

Two hospitals, one in London and one in Manchester, are seeking funding from the U.K. Treasury and Crellin expects it to rule on the requests in coming weeks.

Three private companies that are considering building centers in the U.K. have all said they would offer some capacity for NHS patients.

Advanced Proton Solutions has planning permission to build a center in London’s financial district and has until September 2014 to break ground. Its publicly traded partner in the venture, Advanced Oncotherapy Plc (AVO), which owns about 29 percent of APS, has also agreed to develop proton therapy centers in Birmingham, Manchester and Scotland with BMI Healthcare Ltd., a private-hospital operator owned by Apax Partners LLP and Netcare Ltd (NTC).

“What we’re proposing to the NHS is that they don’t spend any capital at all,” said Samuel Dayani, executive vice president of real estate at Jersey, Channel Islands-based Advanced Proton Solutions. “We’d be happy to provide a full turn-key solution to the NHS.”

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