Radiotherapy market purchasing insights
October 22, 2021
By Julie Johnson
The radiotherapy market has seen substantial growth as the prevalence of cancer cases continues to rise across the U.S. The market was valued at over $6 billion in 2020 and is expected to grow at a CAGR of 5.9% from 2021 to 2028. Although the market continues to grow, purchasing activity for radiotherapy systems began to slow in 2020 as resources were reallocated to other areas to combat the COVID-19 pandemic. This prompted many facilities to put capital equipment purchases on hold. Over the past few months, as 2021 budgeting restrictions are starting to lift, we have begun to see an uptick once again in purchasing activity in the radiotherapy market.
A key consideration in the radiotherapy market has always been the high cost of purchasing a new system. In addition to equipment costs, other concerns such as vaulting, shielding, and construction expenditures can factor into the decision-making process. The treatments offered and applications will also determine what type of radiotherapy system healthcare organizations will purchase. Due to the complexity and high cost of the technology, choosing the right radiotherapy system can be a meticulous process. It often involves multiple groups that can include physicians and other clinicians, capital equipment teams, and administrators.
The most common type of system symplr customers purchase is a linear accelerator (LINAC). A medical LINAC delivers external beam radiation treatment to target cancer cells in the body using high-energy X-rays, which can include:
• Image-guided radiation therapy (IGRT)
• Intensity-modulated radiation therapy (IMRT)
• Volumetric modulated arc therapy (VMAT)
• Stereotactic radiosurgery (SRS)
• Stereotactic body radiation therapy (SBRT)
The two vendors in the market with the most activity and customer interest are Varian and Elekta. Siemens Healthineers previously produced linear accelerators but withdrew from the market in 2011. However, on April 15, 2021, Siemens Healthineers announced it had completed the acquisition of Varian in a $16.4 billion deal, which positions it to be a leader in the radiotherapy market.
Varian has led the market with 73% of all quoting activity seen in the past 12 months. The majority of customer interest is for the TrueBeam system, with an average purchase price (APP) of $2,843,800. Elekta is second in the market, with 17% of all quoting activity. Customer interest has been equally divided between the Versa HD, with an APP of $2,849,150, and the Elekta Infinity, with an APP of $1,778,041. As Varian and Elekta are the two leaders in the market, competition is limited, and negotiating price can be challenging, as most customers will remain loyal to one vendor due to the complexity, cost, and time of replacing a single unit. Standardization is imperative, especially for centers that are operating multiple LINACs.
Two other active vendors currently seen in the market are Accuray and ViewRay. We see limited quoting activity for the Accuray CyberKnife stereotactic radiosurgery system, the Accuray Radixact system, and the ViewRay MRIdian MR-Guided system. Over the past 12 months, there has been increased customer interest in MR-guided radiation therapy systems but limited quoting activity, because they tend to be more expensive than standard LINACs and range between $5,350,000 and $5,9000,000.
Proton therapy systems promote lower-dose treatments over conventional LINACs; however, the cost of a proton therapy system can range between $20,000,000 and $150,000,000. symplr has not seen any quoting activity or customer inquiries in over 36 months for proton therapy systems. Currently, 38 proton therapy centers are treating across the U.S.
When faced with budget constraints, many customers will opt to upgrade their older systems with the latest software and hardware technology to mitigate costs. Upgrade configurations can vary widely based on customer needs and typically average between $150,000 and $300,000. Customers are choosing options such as VMAT to provide faster and more precise treatments. With upgrades and new technology enhancements, LINACs can often outlive their useful life of 5-7 years depending on the type of system.
We highly recommend full-coverage maintenance agreements due to the complexity of the technology and the high cost of replacement parts and labor. We see a great deal of quote activity for service renewals on both old and newer LINACs. Pricing for service will range on average between $200,000 and $300,000 annually, depending on the age of the equipment, models covered, type of coverage, and condition of the equipment.
The market is poised to see significant growth once the pandemic has ended; however, with the recent COVID-19 resurgence in many areas of the U.S., it is unclear how this will impact the radiotherapy market in the near future. Customers purchasing a linear accelerator are looking to enhance value while promoting better clinical outcomes. With the projected growth and innovative technology emerging in the market, customers must consider factors such as cost, functionality, upgradability, and maintenance as they navigate the purchase of a new radiotherapy system.
About the author: Julie Johnson is R&A senior advisor for symplr.
The radiotherapy market has seen substantial growth as the prevalence of cancer cases continues to rise across the U.S. The market was valued at over $6 billion in 2020 and is expected to grow at a CAGR of 5.9% from 2021 to 2028. Although the market continues to grow, purchasing activity for radiotherapy systems began to slow in 2020 as resources were reallocated to other areas to combat the COVID-19 pandemic. This prompted many facilities to put capital equipment purchases on hold. Over the past few months, as 2021 budgeting restrictions are starting to lift, we have begun to see an uptick once again in purchasing activity in the radiotherapy market.
A key consideration in the radiotherapy market has always been the high cost of purchasing a new system. In addition to equipment costs, other concerns such as vaulting, shielding, and construction expenditures can factor into the decision-making process. The treatments offered and applications will also determine what type of radiotherapy system healthcare organizations will purchase. Due to the complexity and high cost of the technology, choosing the right radiotherapy system can be a meticulous process. It often involves multiple groups that can include physicians and other clinicians, capital equipment teams, and administrators.
The most common type of system symplr customers purchase is a linear accelerator (LINAC). A medical LINAC delivers external beam radiation treatment to target cancer cells in the body using high-energy X-rays, which can include:
• Image-guided radiation therapy (IGRT)
• Intensity-modulated radiation therapy (IMRT)
• Volumetric modulated arc therapy (VMAT)
• Stereotactic radiosurgery (SRS)
• Stereotactic body radiation therapy (SBRT)
The two vendors in the market with the most activity and customer interest are Varian and Elekta. Siemens Healthineers previously produced linear accelerators but withdrew from the market in 2011. However, on April 15, 2021, Siemens Healthineers announced it had completed the acquisition of Varian in a $16.4 billion deal, which positions it to be a leader in the radiotherapy market.
Varian has led the market with 73% of all quoting activity seen in the past 12 months. The majority of customer interest is for the TrueBeam system, with an average purchase price (APP) of $2,843,800. Elekta is second in the market, with 17% of all quoting activity. Customer interest has been equally divided between the Versa HD, with an APP of $2,849,150, and the Elekta Infinity, with an APP of $1,778,041. As Varian and Elekta are the two leaders in the market, competition is limited, and negotiating price can be challenging, as most customers will remain loyal to one vendor due to the complexity, cost, and time of replacing a single unit. Standardization is imperative, especially for centers that are operating multiple LINACs.
Two other active vendors currently seen in the market are Accuray and ViewRay. We see limited quoting activity for the Accuray CyberKnife stereotactic radiosurgery system, the Accuray Radixact system, and the ViewRay MRIdian MR-Guided system. Over the past 12 months, there has been increased customer interest in MR-guided radiation therapy systems but limited quoting activity, because they tend to be more expensive than standard LINACs and range between $5,350,000 and $5,9000,000.
Proton therapy systems promote lower-dose treatments over conventional LINACs; however, the cost of a proton therapy system can range between $20,000,000 and $150,000,000. symplr has not seen any quoting activity or customer inquiries in over 36 months for proton therapy systems. Currently, 38 proton therapy centers are treating across the U.S.
When faced with budget constraints, many customers will opt to upgrade their older systems with the latest software and hardware technology to mitigate costs. Upgrade configurations can vary widely based on customer needs and typically average between $150,000 and $300,000. Customers are choosing options such as VMAT to provide faster and more precise treatments. With upgrades and new technology enhancements, LINACs can often outlive their useful life of 5-7 years depending on the type of system.
We highly recommend full-coverage maintenance agreements due to the complexity of the technology and the high cost of replacement parts and labor. We see a great deal of quote activity for service renewals on both old and newer LINACs. Pricing for service will range on average between $200,000 and $300,000 annually, depending on the age of the equipment, models covered, type of coverage, and condition of the equipment.
The market is poised to see significant growth once the pandemic has ended; however, with the recent COVID-19 resurgence in many areas of the U.S., it is unclear how this will impact the radiotherapy market in the near future. Customers purchasing a linear accelerator are looking to enhance value while promoting better clinical outcomes. With the projected growth and innovative technology emerging in the market, customers must consider factors such as cost, functionality, upgradability, and maintenance as they navigate the purchase of a new radiotherapy system.
About the author: Julie Johnson is R&A senior advisor for symplr.