Note: This report originally appeared in the July 2008 edition of DOTmed Business News. A list of registered users that provide sales & service can be found at the end. Read about GE and Hologic's fan beam technologies at https://www.dotmed.com/news/story/6272

Here is a perfect intersection of drugs and technology.

In the old days, there was little that doctors could do to treat osteoporosis. Tums and Tylenol were the only weapons in the armamentarium. Everything changed in 1999 with the approval of the first drugs to build bone mineralization. Examples include Merck's Fosamax and GlaxoSmithKline's Boniva, among others. The treatment has finally caught up to the diagnostic capability of bone densitometers.

"These are connected for sure," said Gitte Andreasen, Director of Global Marketing, Lunar Division, GE Healthcare, Waukesha, WI. "When the first osteoporosis treatment received approval, we did see an increased interest in BMD [bone mineral density] testing, because the dilemma physicians had faced - 'I would love to test you but I have no therapy available' - now had a solution."

Bone mineral density is measured by various types of equipment at various sites on the body, including the spine, hip, femur, forearm, heel, and fingers. DEXA or (DXA) scanners come in two main types - older pencil beam and the new fan beam designs that have tremendous diagnostic capability. The smaller or peripheral body parts are assessed with ultrasound or more compact X-ray units.

"Each device and each measurement site has its place. For a quantitative bone density measurement I would say go get a measure of your spine and hip to check for fractures," said John Jenkins, Senior Director of Skeletal Health Division, Hologic, Inc., Bedford, MA. "The peripheral measures of the forearm or heel are for widespread screening - it's a risk indicator but not a diagnostic tool." The distinctions are important since they affect the cost of the equipment and the potential target market for it, which range from modest screening systems that might be utilized by private practitioners, up to cutting-edge technologies in hospitals.




"There are $10,000 systems [sold] around the world. These are less expensive, but also less advanced when it comes to clinical applications," noted Andreasen. "They do have a smaller footprint ... this is often an issue for primary care physicians."

Compared to other capital investments, BMD testing is a bargain at a price range from about $50,000 to $150,000-plus for new equipment; with refurbished as low as $20,000 to $30,000, as a ballpark.

"Everybody knows CT, MR and nuclear medicine. But now more people are doing mammography or bone densitometry," said Leon Gugel, President, Metropolis International, Long Island City, NY.

"Bone densitometers never really were big money makers like a CT or nuke med cameras, but they still brought in some decent money [for health care providers]," said John Cline, Vice President, Tritech Services, Louisville, KY. "The fact is that it's still something that patients need."

Huge unserved market

Bone densitometry is an extremely promising technology that has far from fulfilled its market potential.

BMD testing procedures are growing at a rate of 15 percent each year. Yet the market remains untapped since 70 percent of women over 60 years of age - prime candidates for the exam - are not tested. This suggests a very promising future for this specialized modality.

"If you have 20 to 30 patients a month that you can test based on the number of patients in the practice, then [a refurbished] system will pay for itself and generate revenue," suggested said Jeffrey Rubinoff, Vice President of Marketing and Business Development, Complete Medical Services, Warren, MI. "We try to educate our dealers and end users that it's a critical modality. It's not a STAT test [of life-saving urgency], but it's important if you look at the numbers."

Osteoporosis is a major public health threat for an estimated 44 million Americans, or 55 percent of people 50 years of age and older. In the U.S. today, 10 million individuals are estimated to already have the disease and almost 34 million more are estimated to have low bone mass, placing them at increased risk for osteoporosis. As the population ages, those numbers will grow. While the disease is concentrated in women, men are also afflicted and represent a largely ignored patient base.

Costs associated with fractures argue for a more concerted effort to measure and treat osteoporosis. In 2005, osteoporosis-related fractures were responsible for an estimated $19 billion in costs. By 2025, experts predict that these costs will rise to approximately $25.3 billion, according to the National Osteoporosis Foundation.

Also favoring the market for bone densitometers is a diverse customer base of many medical specialties. They include orthopedists, rheumatologists, OB/GYN, endocrinologists, internal medicine, primary care and family practice, radiology, and even oncology.

Sales down in non-hospital settings

Despite the many factors favoring bone densitometry, reductions in Medicare reimbursement have put a damper on the market. (Note that as of this writing, legislation is pending in Congress that may reinstate higher funding levels. For updates as we get them, visit DOTmed.com's Weekly Online News.) Meanwhile, many vendors are reporting that sales are flat for both new and pre-owned machines.

"A lot of bone density machines have already been sold, so there is a saturation factor in the last few years. Couple that with DRA [reimbursement cuts] and you have a flat if not slightly shrinking market," said David Denholtz, CEO, Integrity Medical, Fort Myers, FL. "You hear gloom and doom but there is still a market there."

"Demand is going to pick up [for pre-owned equipment]. As the economy is turning down, more people are going to buy used versus new equipment," said Gugel.

In terms of new equipment sales, two separate markets - hospital versus non-hospital - have very different outlooks since the hospital market is not affected by cuts in reimbursement.

"When you are focused on selling to private practices, and their reimbursements start to get cut, everybody takes a wait-andsee approach. They don't want to invest if there are going to be major negative changes," said Hologic's Jenkins. "So it's been a shift from selling to the primary care physician and the specialties, to really renewed growth in radiology. We did hit a valley as far as [sales] performance, but are hiking back out and seeing increases in the U.S. as more hospitals purchase the units."

GE has enjoyed steady sales growth (about eight percent in recent years) in the hospital market, but in non-hospital settings, Andreasen observed, "there's definitely a lower uptake." However she noted new markets are emerging for bone density testing. "We see new customers entering this market and we have a new focus on secondary osteoporosis, which is caused by breast and prostate cancer treatment. So we do see a new customer group as the awareness grows and scientific evidence becomes available stating how important it is to monitor bone density in cancer patients."

The service market is blossoming

Both GE and Hologic offer state-of-the-art fan beam DXA technologies that will replace the older designs like the pencil beam. The new units are amazingly capable and can even spot vertebrae fractures, which might lead to another dimension of osteoporosis assessment. But the shift to cutting-edge approaches raises concerns over ongoing support for the installed base of older technologies, including the GE Lunar DPX and Hologic QDR 4500.

"We do still support our DPX product portfolio in terms of service, but we do recommend our customers start looking into newer technologies because at some point, it will 'end of life,'" said GE's Andreasen, referring to the service phaseout process. "DPX is one of the older technologies and as we introduce newer and better technology, we try to 'end of life' some of the old products. Otherwise we end up having 15 to 20 products and that is just not good business for anybody."

Hologic, with an installed base of more than 15,000 bone densitometry systems worldwide, is also focusing on the future with its fan beam technology. "We no longer sell any pencil beam products. We felt the future was completely in fan
beam because we can get very good images [and] the fastest throughput," Jenkins said.

Regarding service, Jenkins also acknowledged an end-oflife strategy. "We never just say [to customers] that one day we can't support your product. However, as technology changes, we have to make sure that we can continue to support products and give customers warning if we see that sometime down the road we may not be able to buy a certain part.... So we declared an end of life status on [QDR] 4500s manufactured before the year 2000.... End-of-life status means that we can't guarantee support. Though we will continue to support the products as long as we possible can."

When one door closes, another opens and refurbishers and independent service organizations are poised to maintain and repair older machines coming off OEM service contracts. So while sales have slowed, service opportunities abound in
the aftermarket.

"In 2005, we put in a table every 10 days. Now it's every 15 to 20 days. Sales are off 30 percent," said Desmond Johnson, Service Manager, DEXAScanners, Inc., Lebanon, TN. "A huge number of pre-owned units are on the market and prices
have dropped accordingly. But service has blossomed so revenues are the same."

"It's great for us because we've got literally tens of thousands of parts stocked for these machines. So when the manufacturers stop supporting them, that is when we can support those customers that don't want to upgrade because they don't need to and the machines are working great and are reliable," Denholtz said.

Other players in the market

Smaller OEMs are also a factor in bone density testing, among them Norland, Sunlight, and Schick.

Alara, Inc.'s MetriScan® uses a simple, affordable design for screening patients. Technically, it's not a DEXA scanner because the MetriScan uses digital radiographic absorptiometry of the hand. (DEXA or DXA stands for dual-energy X-ray absorptiometry.) The MetriScan brings bone density screening
to the masses and is useful in family medicine and other healthcare settings, including a growing export market.

"There is definitely a big shift in the marketplace getting away from whole body DEXAs of the spine or hip to these smaller, compact machines," said Kuldip Ahluwalia, Vice President of Sales and Marketing, Alara, Inc., Fremont, CA. "Two years ago, I got calls from people who said they were looking for a 'real' DEXA. Now they are asking why the big boys [large OEMs] aren't talking about [lower-cost technology]. My rallying cry is: 'For what you pay for a service contract on a whole body DEXA, you can buy my machine.' Our retail is under $13,000."

"Like every bone density test, it is one of the arrows in the quiver of the M.D. to help make a decision about how to treat a patient," said Christopher R. Mitchell, Ph.D., Chief Scientific Officer at Alara. "We felt that if the machine was compact, easy to use and less expensive, it could go in the primary care physician's office or the OB/GYN as part of a standard health workup."

"In the future we will see many more primary care physicians taking on BMD testing," GE's Andreasen affirmed. "They are at the forefront of healthcare and they see patients first. So it makes a lot of sense for the physician to say: along with your mammogram and pap smear, you also need to have your bones tested. That would be our dream come true."

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DOTmed Registered Bone Densitometers Equipment Sales and Service Companies
Names in boldface are Premium Listings.

Domestic
David Denholtz, BoneDensitometers.com, FL
DOTmed Certified/100
Jenny Marshall, UCI, FL
Bob Serros, Amber Diagnostics, Inc., FL
John Cline, Tritech Services, Inc., KY
Davyn McGuire, Med Exchange International, Inc., MA
DOTmed Certified
John Gladstein, Medical Device Depot, MD
Krista Kotrla, Block Imaging International, Inc., MI
Jeffrey Rubinoff, Complete Medical Services, MI
Mark Hennessy, Southern Winds Int. Med., NC
Mark Samii, DMS Health Group, ND
Robert Manetta, Nationwide Imaging Services, Inc., NJ
DOTmed Certified/100
Marc Todd, Longevity LLC, NY
DOTmed Certified
Leon Gugel, Metropolis International, NY
DOTmed Certified/100
John Kollegger, Bay Shore Medical, LLC, NY
DOTmed 100
Desmond Johnson, DEXAScanners, Inc., TN
Courtney Lane, Innovative X-ray Services LLC, TX
Saulo Waisenberg, Selcon Business Solutions LLC, WA
Mark Schiferl, Schiferl System Resources, Inc., WI
Don Settergren, Inside Outside Sales, LLC, WI

International
David Lapenat, ANDA Medical, Canada
DOTmed Certified
Gautam Sehgal, Ads Diagnostic Limited, India
DOTmed 100
Haitham Khoury, MEDMACK I T E, Syria
Rienthong Nanna, Mongkutwattana Hospital, Thailand
Barbaros Bulent Temiz, BBTEK TIP CIHAZLARI, Turkey
DOTmed Certified

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