Summit Technology (Waltham, Mass) announced in late January that clinical investigators using the company's excimer laser system had completed the number of treatments required by the FDA for photorefractive keratectomy, marking another milestone toward the commercialization of this technology. These investigators will perform follow-up studies on the patients before Summit can submit its clinical data to the FDA in the format of an application for premarket approval. Filing of the premarket approval may take place in 1 or 2 years, according to the company. Meanwhile, clinical investigators will continue to enroll additional patients in the photorefractive keratectomy trials. To date, more than 10 000 patients throughout the world have been treated with Summit's Excimed UV200LA excimer laser system.
During the waiting period for the clinical testing and regulatory approval process to be completed, many analysts are hard at work determining the market potential for photorefractive keratectomy in the US. Summit Technology has commissioned a private study, while Wall Street analysts are more liberal with publicizing their estimates. In the January 1992 issue of MedPRO Month, Sam Navarro of Needham & Company joins forces with a publication's analysts to project that 100 000 eyes will be treated in 1995 (if FDA approval is granted then) at a per procedure charge of $1250 per eye, generating $125 million in revenues. By 1997, MedPRO forecasts 1 million eyes treated annually at a per procedure charge of $1200, boosting the market to $1.2 billion. And by 1999, 2 million eyes may be treated at $1000 per eye, leading to a revenue of $2 billion per year. However, a highly competitive US market could drive down the fees for photorefractive keratectomy.
Ophthalmologists will not be the only beneficiaries of revenues from photorefractive keratectomy. Aside from initial capital equipment sales, there are plans to charge a per-procedure royalty fee that will be collected by the laser companies. Franchise concepts such as Laser Vision Centers (St Louis, Mo) may also share in the revenues, as well as patent holders such as IBM (which will receive 2% of net revenues).
Distribution of income from photorefractive keratectomy will also be affected by the maintenance cost of owrdng and operating a photorefractive keratectomy excimer system. Using current cost figures, MedPRO calculates that $1 million will be required over 5 years to purchase and maintain an excimer laser. Thus, the owner of a photorefractive keratectomy laser would have to treat 200 eyes per year just to break even. However, the unknown per-procedure royalty fees and the costs of practice marketing in the face of competition will significantly increase this minimum number. In fact, given the heavy patient load required to make a profit with an excimer, it is likely that groups of ophthalmologists will share systems. MedPRO predicts an installed base of up to 1000 excimer lasers by the end of this decade.
Biomedical Business International reported in a recent issue of its newsletter that the US market potential for photorefractive keratectomy excimer systems would be 875 units sold within 5 years of approval (estimated to occur in 1995). These analysts expect the per-unit price of excimers to decline over that period of time, with total sales in the 5-year forecast period of roughly $300 million. In addition, revenues from per-procedure fees charged by the laser companies are expected to reach $230 million annually by the year 2000.
ARE OPTIMISTIC PROJECTIONS JUSTIFIED?
All of these analysts seem to be making the assumption that millions of Americans will undergo photorefractive keratectomy to correct relatively mild cases of myopia (up to 6.00 diopters). If this is true, then photorefractive keratectomy will provide a much-needed economic boost to the US ophthalmic community. However, observers should note that less than 20 000 eyes have been treated with the approximately 200 photorefractive keratectomy lasers installed outside of the US. And even though these units are largely installed in affluent countries where patients can now be treated without government restriction, we have not seen the volumes of patients that market analysts are projecting for the US once government restrictions are lifted here. If the success of photorefractive keratectomy lasers in developed countries throughout the world is a model for what the American market will be like after FDA approval, then there is an apparent gap between perception and reality. Those who caution that the market may not be 1 to 2 million cases cite the experience with radial keratotomy in the early 1980s when the predicted high volume of surgery never occurred. On the other hand, we could assume that cultural dynamics may play an important role in the US following FDA approval. Perhaps patients in this country will spend more money and take greater risks with their vision.
by MICHAEL MORETTI