Market

Around 10% of the world’s total population is living with some form of chronic kidney disease. In the US alone, Chronic kidney disease is a growing public health problem. 10% of US adults – more than 20 million Americans – have chronic kidney disease. The prevalence of chronic kidney disease increased by 30% in the decade between 1994–2004 largely because of an increased prevalence of diabetes, hypertension and obesity. At current there is no indication of a slowdown of this growing burden of kidney disease.

It is uncertain how many of the of these would benefit from renal replacement therapies. However, only developed countries with a well-funded healthcare system can fund this most expensive chronic treatment.

The global hemodialysis market is driven by increase in incidence of hypertension and diabetes. Moreover, rise in number of end stage renal disease (ESRD) patients and shortage in availability of kidneys for transplants are the key factors that augment the growth of the market. The presence of untapped markets in the emerging nations is expected to provide new opportunities for the key players.

“ESRD patients in 2013. A global perspective”, by Fresenius Medical Care

Significant R&D and commercial investment is required. Any transformational innovation will require the innovator to spend significant funds for R&D and commercialisation efforts. In addition, the innovator must take on the high risk of development and lengthy approval processes. This large investment inhibits disruption by smaller startups so far. At current, there are relatively few startups focusing on dialysis innovation, while there are hundreds working in the oncology and diabetes space out of the total estimated 7000+ startups in the US.

This has contributed to only incremental innovations by the multinational companies as well as startups.

Significant infrastructural investments: existing dialysis centres have invested large sums in setting up infrastructure and purchasing current generation dialysis devices. The centres require to recoup their investment over a long period of time as fixed costs are comparably high. Ideally, these costs should be spread across a large number of patients. This inhibits innovation and adoption of disruptive technologies.

Further, there exists a discrepancy in funding and reimbursement for kidney disease in some markets: nephrology as a specialty has received insufficient funding for research as compared to other specialties such as oncology and internal medicine. In the US, there was a huge discrepancy in Medicare cost of care for patients with kidney disease (US$33 billion) and National Institute of Health (NIH) funding for kidney research (US$0.56 billion) in 2016. This means that less than 2% of total Medicare costs for the care of patients with kidney disease was spent on research.

Current reimbursement models focus on dialysis and do not have a process for reimbursing disruptive new technologies, resulting in R&D investment being disincentivised.

Overcoming Barriers in Kidney Health—Forging a Platform for Innovation

EY Analysis, NIH Categorical Spending, Medical Expert Panel Survey (MEPS) by AHRQ

Reference: United States Renal Data System. Annual Data Report: Atlas of Chronic Kidney Disease and End-Stage Renal Disease in the United States. Bethesda, MD: National Institutes of
Health, National Institute of Diabetes and Digestive and Kidney Diseases; 2013

United States Department of Health and Human Services. National Chronic Kidney Disease Fact Sheet: General Information and National Estimates on Chronic Kidney Disease in the United States. (CDC). 2014. Available at: http://www.cdc.gov/diabetes/data/statistics/2014statisticsreport.html.

Reference : Coresh J, Selvin E, Stevens LA et al. Prevalence of chronic kidney disease in the United States. JAMA. 2007;298(17):2038–2047.