Oct 7, 2018
This afternoon I leave for Denver for the American Society of Reproductive Medicine (ASRM) meetings, a conference I have attended since 1988. Having lived in the in vitro fertilization (IVF) world in varying roles for three decades, I offer the following observations about what’s good and what’s bad about assisted reproduction today.
What Can Be Better:
Access — still. There are 7 million women with infertility in the United States. Using in vitro fertilization, approximately 1% of those successfully deliver a baby per year. Imagine another area of medicine where the percentage is that low. This brings us to…
Out-of-pocket cost — still. The United States IVF industry has found an equilibrium point in the upper left corner of their market demand curve. The industry has traded off volume for price. As a result, IVF accounts for 1.5% of newborns in the U.S. versus much higher percentages in other developed countries. In Australia, Japan, and in many parts of Europe, IVF newborns account for a percentage more than three times that of the U.S. The reason is cost. Graphing out-of-pocket costs versus per capita use of IVF results in an almost perfect demand curve, right out of economics textbook.
This is not a result of anything evil or intentionally consumer un-friendly on the part of IVF centers or reproductive endocrinologists. The existing supply of IVF labs, reproductive endocrinologists and embryologists have adapted to a size-constrained market. It does point, however, to a need for disruption within the industry, to provide options for those in need of the service at a lower price point.
A lag in engineering behind the advances in science. Robotics, microfluidics, machine learning, more aggressive data collection, analysis and application have not yet catalyzed innovation in IVF the way they have in oncology, orthopedic surgery, clinical laboratories, and medical genetics. A future IVF that is more reproducible, more standardized, more efficient and less costly will result when we take these tools off the shelf and put them to work to create the scalable IVF labs in the future.
The disconnect between investment in industry consolidation and investment in innovation. I view the private equity industry’s interest and investment in IVF favorably, since it has accelerated the proliferation of the techniques and outcomes of the highest functioning laboratories through their entry into other markets. This market consolidation, which is straight out of a business strategy textbook for private equity, has resulted in a higher overall standard of care. It has not, however, provided a groundwork for scaling the industry to affordably accommodate the as yet unmet needs of the large percentage of potential patients that are currently untreated. The IVF industry makes too many MacBook Pros, and too few Chromebooks, too many suites at the Four Seasons and too few standard rooms at Hiltons and Sheratons, and even Motels 6. Private equity investment consolidation will not solve this. Investment in innovation will.
We are leaving the largest opportunity for IVF on the table, almost untouched. IVF is a wonderful tool for treating infertility, decreasing the risk for miscarriage, preserving fertility in cancer patients, and facilitating proactive family planning. Active and/or evolving markets exist for each of these indications. But IVF’s greatest potential contribution to medicine, its use for disease prevention using preimplantation genetic diagnosis, is a blip in the reproductive medicine marketplace. Between 4000 and 5000 pregnancies are conceived at risk in the U.S. per year for having a baby with cystic fibrosis. Over 7000 pregnancies are conceived at risk for a baby with sickle cell anemia. Tens of thousands of other pregnancies are conceived with considerable risks for monogenic diseases, in addition to the thousands of pregnancies conceived with no thought to active management of, for example, BRCA status. PGD could prevent all of these diseases — with an IVF procedure that is cheaper, safer and and more effective than methods either in place or in development to treat them.
There are a lot of reasons for the lack of development for preventive gene therapy using IVF. The absence of a patient supply chain from rare disease centers of excellence, the lack of knowledge regarding preventive genetics at the point of diagnosis in hematology departments and in children’s hospitals, and the uneven screening and counseling in OB/GYN’s offices throughout the country. The result is that these patients rarely appear at IVF centers prior to conception.
Medicine reveres the concept of disease prevention. In the IVF world, our actions have not matched this reverence.
What’s right about IVF:
Access is improving, and rapidly. Ask a human resources executive what the most valued benefit is for high cost of acquisition and high cost of retention employees, and he or she will tell you that it is insurance coverage for assisted reproduction. In the past three years, over 1 million employees have gained very generous employee-based IVF coverage, up to $100,000 per person, and the number is rising rapidly. This has tremendous implications for the industry. Consider that we routinely treat approximately 150,000 patients with IVF in the U.S. per year. Applying the 8% infertility prevalence to 1 million newly insured people implies up to 80,000 new consumers who can now afford in vitro fertilization. This is a massive increase that the industry, through increased expansion, better leverage of existing facilities and physicians, and the adoption of innovation, will need to adapt to. The good news is that, after meeting dozens of entrepreneurs and reading many business plans focused on the goal of innovation and IVF, I am confident that the industry is up to the task. The question is only how rapidly it adapts.
New practice models are evolving. The rapid growth of egg freezing stimulated a rethinking of the traditional IVF center. Where the model since the introduction of IVF has been a single facility where intake, monitoring, retrieval, oocyte freezing, oocyte thaw, fertilization, embryo development, blastomere or trophoblast biopsy and preimplantation testing, transfer and subsequent embryo freezing all occur, technology is being developed the could facilitate a decentralization of IVF into a stimulation/ retrieval/ vitrification phase, freestanding cryo storage sites for eggs, sperm, and potentially embryos, and a concentration of oocyte thaw/ fertilization/ development/ PGD and transfer into the IVF lab itself. Currently, the triage of both expensive laboratory space and the hours of highly trained medical sub-specialists and embryologists has been inefficient. A bioengineering process that closes the in vivo oocyte to vitrified oocyte stage could move retrievals out of the laboratory and into procedure rooms (which cost 1/10 the buildout per square foot vs laboratories) and possibly the the movement of egg retrievals to already existing satellite offices that currently do only intake and monitoring. Of course the issue of sedation during retrieval needs to be worked out, but experience in other medical specialties suggests that realistic solutions may already be at hand. Thus the first part of a large-scale expansion of the IVF infrastructure should be leveraging the facilities, assets and personnel already in place.
I mentioned earlier the under the radar development of an early stage innovation community for in vitro fertilization. After I started writing about the industry several years ago, I began to receive, unsolicited, business plans and phone calls from a range of academic researchers, tinkering engineers, and patients who noted inefficiencies in the IVF process and were working on solutions. Some of these were quite good, and several of them were outstanding. Currently, there is no shortage of capital for innovation in healthcare, and the investment community has proven itself efficient in finding new markets where early-stage capital can provide excellent investment returns while opening up new markets to large populations of underserved people. In other words, the inputs for innovation are in place. We need to connect them with capital and provide solutions to the large, currently underserved, of potential IVF patients.
Finally, the groundwork for greater use of IVF with PGD as preventive gene therapy is being established. A gradual commodification of a preconceptual genetic screening is resulting in greater availability of screening for serious medical conditions and predispositions, ranging from sickle cell anemia to BRCA status. As patients and potential parents are screened and found to be at risk for having children with serious medical conditions, they should be counseled about disease prevention through IVF. Obviously, a lot of work is needed to identify these families and couples, not only during preconceptual OB/GYN visits, but also by identifying and educating families with known carrier statuses or with siblings or relatives already affected with genetic diseases. Exacerbating the problem is a great shortage of genetic counselors. Here, too, technology offers opportunities to leverage a pre-existing population of specialists with solutions like telemedicine, as has been happening in many areas of primary care.
In vitro fertilization, preimplantation diagnosis, proactive fertility planning, and preventive gene therapy have so much to offer current patients and families in the future. The same vision and imagination that resulted in the invention and ever increasing use of IVF, embryo freezing, ICSI, oocyte vitrification, and preimplantation genetics will, fed and watered with a little bit of innovation capital and seed funding, evolve the IVF industry into one of the most important branches of medicine in the 21st-century.