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Medical Isotope Production without Highly Enriched Uranium 10 Conversion to LEU-Based Production of Molybdenum-99: Prospects and Feasibility The focus of this chapter is on the first and last charges of the statement of task for this study (Sidebar 1.2). The first charge calls on the National Academies to assess “the feasibility of procuring supplies of medical isotopes from commercial sources that do not use highly enriched uranium [HEU].” The last charge calls for additional information if these feasibility criteria are not met: If the National Academies determine that the procurement of medical isotopes from commercial sources is not feasible as defined in Section 630 of the Energy Policy Act, it should estimate the magnitude of the cost differential and identify additional steps that could be taken by the Department of Energy [DOE] and medical isotope producers to improve the feasibility of such conversions. In estimating the magnitude of cost differentials, consideration should be given to facilities utilized by both large and small producers. The National Academies should also identify any reliability of supply issues that could arise as a result of such conversions. This chapter is organized in four sections. The first provides a review of the current status of conversion efforts by large-scale molybdenum-99 (Mo-99) producers, the second addresses conversion feasibility, the third suggests additional steps to improve feasibility of conversions, and the fourth presents findings and recommendations.
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Medical Isotope Production without Highly Enriched Uranium CURRENT STATUS OF CONVERSION As discussed in Chapters 1 and 3, the U.S. supply of Mo-99 is produced primarily by two companies, MDS Nordion and Mallinckrodt, at their facilities in Canada and the Netherlands, respectively (Table 3.1). Two other companies provide backup supplies of Mo-99 to North America: Institut National des Radioéléments (IRE) in Belgium and Nuclear Technology Products (NTP) in South Africa. All four of these companies produce Mo-99 using HEU targets.1 Conversion prospects for these four producers are described briefly in the following sections. MDS Nordion (Canada) As was noted in Chapter 3, MDS Nordion obtains impure Mo-99 under a revenue-sharing agreement with Atomic Energy of Canada, Ltd. (AECL) a Canadian Crown Corporation. AECL produces Mo-99 at its Chalk River, Ontario, site by irradiating HEU targets in the National Research Universal (NRU) reactor (Table 3.2) and processing those targets in an onsite hot cell facility. Mo-99 production was planned to be shifted to a new facility at the Chalk River site, but this plan was never realized for the reasons described below. In August 1996, AECL agreed to construct two new reactors and a processing facility for MDS Nordion at the Chalk River site. These facilities, referred to as the Dedicated Isotope Facilities (DIF), include two reactors (referred to as the Maple reactors; Sidebar 10.1) and a New Processing Facility (NPF) with five hot cells to process irradiated targets and to manage the resulting solid, liquid, and gaseous wastes from the Mo-99 extraction process.2 Construction of the DIF, including the Maple-1 reactor, was completed by AECL in 2000. However, Maple-1 hot commissioning was halted by the Canadian Nuclear Safety Commission because of a technical problem with the reactor (see Sidebar 10.1). The delay in commissioning the reactor resulted in large cost overruns3 and culminated in mediation proceedings initiated by MDS Nordion. A settlement was announced in early 2006: According to a representative of MDS Nordion, the settlement involved the 1 The targets used by NTP are 45 percent HEU, not the 93 percent HEU used by the other producers. 2 The DIF was designed to irradiate and process HEU targets of a different design than the HEU targets that are currently being irradiated in NRU (see Table 2.2). 3 A representative of MDS Nordion reported to the committee that the original budget for the project was $145 million, but the company spent over $350 million on the project. The committee has not independently confirmed these figures, nor does it know what AECL spent on the project.
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Medical Isotope Production without Highly Enriched Uranium SIDEBAR 10.1 Maple Reactors The Maple-1 and Maple-2 reactors are 10-MWt pool-type dedicated medical isotope production reactors fueled with LEU. When operated at their design capacities, the output of Mo-99 from one of the two reactors would have been roughly equal to current worldwide demand. These reactors were designed to operate with HEU targets. The decision to use HEU targets was controversial because at the time the construction of the Maples was initiated, there was an international push, led by the United States. and supported by IAEA, to eliminate the civilian use of HEU (see Chapter 11). AECL discovered that the reactor had a positive power coefficient of reactivity in June 2003, after the Maple-1 reactor had been operated at a reactor power of 8 MW. This behavior was unanticipated and, because its origin could not be identified, it was deemed by the regulator (the Canadian Nuclear Safety Commission) to be a safety issue. AECL engaged the services of organizations such as Brookhaven National Laboratory, Idaho National Laboratory, and INVAP, an Argentinian company that designs research reactors, from 2005 to 2008 for computer simulations and development of a test program to identify the cause of the discrepancy between the predicted negative and measured positive coefficient of reactivity of the reactor, but a cause was never determined. In May 2008, AECL halted work on Maple-1 and announced that it was discontinuing the project. transfer of ownership of the DIF from MDS Nordion to AECL, assumption by AECL of all future capital and operating costs, and a $25 million cash payment to MDS Nordion. In return, AECL agreed to supply medical isotopes to MDS Nordion under a 40-year revenue-sharing arrangement. As noted in Sidebar 10.1, work to understand and correct the technical problems with the Maple reactors continued until May 2008, when AECL announced that it was discontinuing that work.4 AECL also announced that it intended to seek a 5-year extension of the operating license for NRU (from 2011 to 2016) to maintain production of Mo-99 for the intermediate term. As noted in Chapter 4, this life extension will reportedly cost several hundreds of millions of dollars. Natural Resources Canada, a Canadian federal department, has been charged by the Canadian government with developing contingency plans for medical isotope production by AECL. The goals of this planning are to (1) avoid unplanned outages at NRU, (2) help 4 Following this decision, AECL was served with a notice of arbitration proceedings. MDS Nordion is seeking to compel AECL to meet its contractual obligations under the 2006 agreement. MDS Nordion has also filed a $1.6 billion lawsuit against AECL and the government of Canada for breach of contract and interference with economic relations.
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Medical Isotope Production without Highly Enriched Uranium the health care community manage any disruptions, and (3) arrange for an international backup supply of Mo-99.5 The committee was told by AECL and MDS Nordion representatives that conversion of the DIF to low enriched uranium (LEU)-based production was under consideration prior to the May 2008 announcement. This work was apparently a continuation of a conversion feasibility study that was initiated in the late 1990s by these organizations; that study is described by Malkoske et al. (2003).6,7 That study was organized into three phases: a Phase 1 feasibility study; a Phase 2 development program; and a Phase 3 implementation program. The Phase 1 study determined that it was technically feasible to convert the Maple reactors to LEU targets but that significant technical work was required, regulatory approvals would be needed, and the costs associated with conversion would be significant. A design concept for an LEU target was reportedly developed that could provide the basis for engineering qualification, development, and assessment of potential technical issues for converting NPF to LEU-based production. The feasibility study also identified potential capacity and throughput problems in the NPF associated with processing the larger volumes of LEU targets that were anticipated as a result of conversion. Phase 2 focused on process and technology development and was jointly carried out by MDS Nordion, AECL, SGN (a subsidiary of the French company AREVA), and Argonne National Laboratory. The work in this program was focused on ways to overcome the capacity and throughput problems identified in Phase 1 as well as improvements to the waste processing system. Phase 2 was to have been completed in 2004 (Malkoske, 2003) but it was not clear whether this work was completed.8 The Phase 3 program was never implemented. This conversion feasibility study was apparently restarted by AECL and MDS Nordion while this National Academies study was in progress. The 5 Sylvana Guindon, Natural Resources Canada, verbal communication with committee chair Chris Whipple and study director Kevin Crowley, June 20, 2008. 6 The committee was given a high-level briefing on this study by MDS Nordion but was not provided with any company-produced written documentation. The committee was also able to obtain and review correspondence from Argonne National Laboratory about its research and development collaborations with MDS Nordion. This correspondence is in the public access file for this study. 7 This program was initiated after a 1997 exchange of diplomatic notes between the Canadian and U.S. governments concerning the conversion of medical isotope production and processing facilities to LEU. 8 As noted in footnote 6, the committee obtained copies of correspondence between DOE and Argonne National Laboratory concerning Argonne’s work for AECL and MDS Nordion during this Phase 2 program. The program appeared to be making good progress into 2002 when it was terminated.
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Medical Isotope Production without Highly Enriched Uranium committee understands that three conversion options were investigated: (1) Convert the NPF before it is hot commissioned; (2) retrofit the facility to handle LEU targets after hot commissioning with HEU targets; or (3) build a new facility for processing LEU targets while using the NPF to process HEU targets. An MDS Nordion representative told the committee that conversion of the NPF before hot commissioning was preferable from both a cost and logistical standpoint but that there might not be enough time to complete conversion and establish a reliable supply of Mo-99 with an LEU-based process before the scheduled NRU relicensing period in 2011. The representative noted that retrofitting the NPF once HEU-based production begins would be costly and would disrupt isotope production. The committee agrees with the MDS Nordion representative’s assessment that conversion prior to hot commissioning is the most attractive alternative from both a timing and cost standpoint. In fact, it would have been even more attractive from a timing and cost standpoint to have designed the new reactors and processing facility to irradiate and process LEU targets: AECL and MDS Nordion could have continued to irradiate and process HEU targets in its current facilities (the NRU reactor and hot cell process line) while the LEU process was brought online. This would have allowed conversion without supply disruptions and would probably have been the most cost-effective conversion option. AECL’s decision to discontinue work on the Maple reactors (and presumably the NPF) potentially complicates its conversion options. A representative of Natural Resources Canada told the committee that AECL has determined that converting NRU to irradiate LEU targets is a “deal breaker” because of cost. However, this representative also confirmed that the government had done no independent evaluation of costs but was instead relying on AECL’s estimates.9 On the other hand, assuming life extension to 2016, AECL’s decision to continue to produce Mo-99 in the NRU reactor eliminates the time pressures to hot commission the NPF; consequently, if AECL were to reconsider its decision to abandon the DIF, including the Maple reactors, there would still be time to convert that facility to process LEU targets. The necessary target design, irradiation, and process development work could be carried out using the NRU reactor10 and the NPF while HEU-based isotope production continues in the current facilities. As discussed in Chapter 7, much of the needed development work could be carried out with cold and radioactive tracer tests that do not require the use of hot cells. 9 Sylvana Guindon, Natural Resources Canada, verbal communication with committee chair Chris Whipple and study director Kevin Crowley, June 20, 2008. 10 NRU is a large multipurpose research reactor that could likely accommodate work on LEU target development as well as irradiations of HEU targets for Mo-99 production.
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Medical Isotope Production without Highly Enriched Uranium Perhaps the two most significant potential obstacles to conversion to LEU-based Mo-99 production at Chalk River are strategic and financial, which are intertwined: What are AECL’s long-term plans for medical isotope production? Who pays for conversion? Under the 1996 agreement with AECL to develop the DIF, MDS Nordion was responsible for paying the costs of conversion. The committee understands that this part of the original agreement is still intact. At present, MDS Nordion has no business reason to convert to LEU-based production under its current agreement with AECL. Even if a business case could be made, however, MDS Nordion might be reluctant to foot the costs of conversion without some assurance of a long-term commitment by AECL to produce Mo-99. The decision to discontinue work on the Maple reactors would appear to call this commitment into question. The decision to discontinue work on the Maple reactors is not consistent with AECL continuing to produce Mo-99 over the long term. The committee assumes that the worst-case scenario for fixing the Maple reactors involves the replacement of the reactor cores. The cost of such replacements would likely be small (tens of millions of dollars) in comparison to the cost of building a new reactor (hundreds of millions of dollars) or refurbishing NRU (also hundreds of millions of dollars according to a representative of Natural Resources Canada, as noted previously). Further, it is unclear how such extensive refurbishment work could be carried out without affecting the reliability of Mo-99 supply, especially if the NRU reactor needed to be shut down for extended periods of time. The extended shutdown of NRU without a backup source of production would have dire consequences for Mo-99 supply worldwide. AECL could probably contract with another organization to fix the Maple reactors—and, if desired, to convert the NPF to LEU-based production—if it does not have the necessary in-house technical expertise or resources to do the work itself. The committee judges that there is enough time to fix the Maple reactors and refurbish the NPF before 2016 if work begins within the next year (see Chapter 9 on timing). The committee submitted a list of questions to AECL concerning its future plans for the Maple reactors, NPF, and LEU conversion (see Appendix E).11 11 The questions were submitted to Richard Cote, AECL’s chief financial officer who is also in charge of AECL’s Mo-99 production program, and also to William Pilkington, AECL’s vice president and chief nuclear officer.
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Medical Isotope Production without Highly Enriched Uranium AECL declined to provide either a verbal or a written response to the committee’s request for information.12 AECL’s decision to abandon the Maple reactors has probably put on hold any plans to convert to LEU-based production until the long-term Mo-99 supply issue is settled. The long-term prospects for conversion are likely poor absent a strong push from the U.S. or Canadian governments. The Canadian government is currently reviewing its options for AECL and could decide to sell all or part of it.13 This is another complicating factor in any conversion decision. Mallinckrodt (Netherlands) As discussed in Chapter 3, Mallinckrodt has an agreement with the Nuclear Research and Consultancy Group (NRG) to irradiate HEU targets in the High Flux Reactor (HFR) at the Petten site in the Netherlands. Mallinckrodt also processes the irradiated targets at a hot cell facility on that site. In late 2007, NRG and Mallinckrodt announced that they would begin an assessment of the feasibility of converting to LEU targets. The initial focus of this assessment is to develop an LEU target that is usable in the Pallas reactor, which is being planned to replace HFR in about 2016.14 NRG will then determine if this LEU target can be used in HFR. NRG staff told the committee that development work on LEU targets could be supported by experimental irradiations within the current HFR operating license but would require a change in NRG’s hot cells (to allow it to process LEU targets) but that this was not seen as a significant obstacle. Mallinckrodt is examining two options for obtaining Mo-99 from processes that do not use HEU. First, it is assessing the feasibility of converting its current Mo-99 processing facility at Petten to accommodate LEU targets. This includes an examination of a range of possible target materials and alternative processing approaches. In 2007, Mallinckrodt reported to the 12 An assistant to Mr. Cote did set up a phone conference with study director Kevin Crowley for the purpose of discussing how answers to the committee’s questions might be provided. However, that phone conference was subsequently canceled by Mr. Cote and was never rescheduled. 13 In 2008, the Canadian government hired National Bank Financial to advise on the options for the future of AECL. Those options could range from the outright sale of AECL to a public-private partnership to inject capital and stability into the company. The core focus of AECL has been its CANDU reactor business, and its continued viability in that business will likely depend on its ability to continue to attract contracts to support existing CANDU reactors and new reactor designs. The NRU reactor is the only remaining irradiation platform at AECL for CANDU reactor fuel and core materials and testing. 14 As noted in Chapter 3, 2016 is an optimistic date. A reactor design has not yet been selected nor has funding been committed.
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Medical Isotope Production without Highly Enriched Uranium committee that the level of annual investment in this development work was in “six figures.” However, the committee does not know the basis for these estimates; it is the committee’s assessment that the company is investigating different LEU processes but has not selected a particular process for in-depth development work. Mallinckrodt has not developed a detailed cost estimate for the construction of a new processing facility, but a representative reported to the committee that such a facility could cost several tens of millions of dollars. The company also reported that all of the LEU-based technologies examined to date are likely to result in increased production costs. Mallinckrodt’s second focus is on the identification of other production technologies that do not utilize HEU. The company was unwilling to share detailed information with the committee on the options under consideration, but it seems likely that the company is examining options to obtain Mo-99 from current and/or potentially new LEU-based producers. The committee is aware of two organizations that are seeking to partner with organizations such as Mallinckrodt to provide Mo-99: the Missouri University Research Reactor (MURR) and Babcock & Wilcox (B&W). The capabilities of these organizations are discussed in Chapter 3. Mallinckrodt indicated to the committee that converting within its current facility was not possible based on processing cycle times and reliability of supply. However, the committee was not convinced that such conversion was infeasible. Because of the large number (10) of available hot cells for Mo-99 production in its Petten facility, Mallinckrodt would appear to be well positioned to convert to LEU-based production without the need for major new construction, especially if it could use a hot cell elsewhere on the site or at another site for process development work. As discussed in Chapter 7, much of the needed process development work could be done without hot cells. The committee has not undertaken a detailed analysis of the Mallinckrodt facility to assess its suitability for conversion. Instead, the committee’s judgment is based on the number of hot cells available at the Mallinckrodt facility relative to the number of hot cells that are used by other Mo-99 producers (typically about five hot cells) to process targets and recover Mo-99. However, the rate-limiting step for conversion could well be the schedule for developing LEU targets that are compatible for use in both the existing reactor (HFR) and in the Pallas reactor that is planned to replace it. Although targets are simple in their design, it takes time to develop, test, and qualify targets for routine use for Mo-99 production. The process is not unlike that required for fuel except that physical requirements for targets may be easier to meet given their shorter residence times in reactors.15 15 See also the discussion of the Belgian Reactor II (BR2) in the next section.
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Medical Isotope Production without Highly Enriched Uranium Conversion might be possible within 3–5 years if LEU targets can be developed for HFR; otherwise, conversion would not take place until the new reactor is up and operating. As discussed in Chapter 3, this is planned to occur in 2016 (i.e., in about 8 years). As noted in Chapter 4, HFR is estimated to reach the end of its operating life by 2020. Lantheus (United States) As discussed in Chapter 3, Lantheus is the other main supplier of technetium generators to the North American market. It does not produce Mo-99 itself and therefore has no direct role to play in LEU conversion. Its key Mo-99 supplier is MDS Nordion.16 However, Lantheus could play an important indirect role in conversion by signing a Mo-99 purchase agreement with an LEU-based producer. The committee learned through a reliable source that Lantheus is in talks with at least one potential producer about establishing a purchasing agreement for LEU-based Mo-99. IRE (Belgium) A representative of IRE told the committee that it has no plans to convert to LEU targets at present and is doing no research or development work on conversion. However, there appears to be ample hot cell space within the existing facility at IRE that could be used for conversion if desired. As noted in Chapter 3, IRE currently processes its HEU targets in a dedicated bank of hot cells. It has a backup set of processing hot cells that are rarely, if ever, used for target processing, and a third set of hot cells that are used intermittently for strontium recovery. Either of the latter two sets of hot cells could be used for target and process development and conversion. Both IRE and Mallinckrodt rely primarily on HFR for target irradiation. Consequently, it is possible that IRE would be forced to convert to an LEU-based process if LEU targets are successfully developed for HFR or its Pallas replacement. It could be hard for IRE to justify the continued use of HEU targets once an LEU replacement target is developed and demonstrated for use in these reactors. Of course, LEU targets would also have to be developed for use in the BR2 and Osiris reactors if they are to continue to be used for Mo-99 production. These could be the same target designs that are used in HFR 16 This company may have agreements with other producers for backup supplies of Mo-99, but the committee was not able to obtain any information from the company because it declined to participate in this study.
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Medical Isotope Production without Highly Enriched Uranium and its replacement or targets of a different design that are compatible with Mallinckrodt’s and IRE’s processing equipment. The loss of BR2 and Osiris for Mo-99 production could have an impact on supply reliability during outages at HFR (and later the Pallas reactor). Compatible LEU targets would also have to be designed for use in the Jules Horowitz Reactor (JHR, Table 3.2) if that reactor is to be used for Mo-99 production. NTP Radioisotopes (South Africa) NTP Radioisotopes is currently working to convert its reactor fuel to LEU (see Chapter 3), but the committee is aware of no plans at present to convert to LEU targets for Mo-99 production. The organization declined to participate in this study, so the committee was unable to obtain the information needed to determine whether there is adequate existing hot cell space at NTP to support target conversion. As noted in Chapter 3, NTP uses domestic HEU enriched to 45 percent for Mo-99 production. It could continue to use its domestic supply even if the remainder of the world converted to LEU-based Mo-99 production. As noted in Chapter 7, NTP could probably convert to LEU-based production using Comisión Nacional de Energía Atómica (CNEA)-type targets without a significant increase in target throughput. CONVERSION FEASIBILITY Congress specified that production of medical isotopes is deemed to be feasible if the following three conditions are met (see Sidebar 1.2): LEU targets have been developed and demonstrated for use in the reactors and target processing facilities that produce significant quantities of medical isotopes to serve U.S. needs for such isotopes; Sufficient quantities of medical isotopes are available from low enriched uranium targets and fuel to meet United States needs; and The average anticipated total cost increase from production of medical isotopes in such facilities without the use of HEU is less than 10 percent. In the sections that follow the committee provides its assessment of whether current production of LEU-based Mo-99 is sufficiently mature and cost-effective to satisfy these three congressionally specified conditions. Condition 1 LEU targets have been developed and demonstrated for use in the reactors and target processing facilities that produce significant quantities of medical isotopes to serve U.S. needs for such isotopes.
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Medical Isotope Production without Highly Enriched Uranium At present, neither MDS Nordion nor Mallinckrodt is producing Mo-99 using LEU targets nor have they announced plans to begin such production. For this reason, Condition 1 is not met. However, this literal interpretation is not helpful for differentiating between the technical feasibility of producing significant quantities of medical isotopes (and specifically the isotope Mo-99) using LEU targets and the economic feasibility of such production. Economic feasibility is the focus of the third condition established by Congress and is discussed later in this chapter. The committee judged that a more informative approach to address this first condition is to divide it into two parts that focus specifically on technical feasibility: Have LEU targets been developed and demonstrated for large-scale production of Mo-99? Could these targets be used in reactors and processing facilities that produce significant quantities of medical isotopes for the U.S. market? With respect to the first question, at least two LEU target designs have been developed that could support the large-scale production of Mo-99 (see discussion in Chapter 7): (1) uranium metal foil targets developed by Argonne National Laboratory in collaboration with several other organizations and (2) high-density uranium-aluminum dispersion targets developed by CNEA. The uranium metal targets have been tested for Mo-99 production but are not being used at present to produce Mo-99 commercially; however, the committee sees no technical barriers to their use for such production. The high-density uranium-aluminum dispersion targets are being used by CNEA for Mo-99 production on a commercial basis, although in less-than-large-scale quantities at present. The Australian Nuclear Science and Technology Organisation (ANSTO) plans to begin large-scale production of Mo-99 using this equipment in the near future as described in the Regional Producers section of Chapter 3. With respect to the second question, the committee sees no technical barriers to the use of LEU targets for large-scale production of Mo-99 by producers that currently supply the U.S. market. There is nothing unusual about the materials used in these targets that would prevent them from being irradiated and processed in a wide range of reactors and processing facilities. The NRU reactor and HFR were converted from HEU to LEU fuel in 1991 and 2006, respectively. There is little difference between the materials and designs used in these targets and the materials and designs used for the fuels for the reactors in which these targets are irradiated.17 17 In other words, any design that was qualified as a fuel would also qualify as a target. However, the reverse is not necessarily true; reactor targets are designed to be irradiated only for
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Medical Isotope Production without Highly Enriched Uranium $44 million for Mallinckrodt based on its 25 percent global market share; and $35 million for IRE based on its 20 percent global market share. The committee judges that these additional revenues would be more than sufficient if conversion could be carried out within producers’ existing facilities. This appears to be the case for all three of these producers: As noted previously in this chapter, AECL could convert within the NPF facility; IRE could convert one of its backup sets of hot cells; and Mallinckrodt could convert some of its existing hot cells. In these cases, additional conversion costs would likely be much less than the present values of these additional revenues, likely no more than a few millions to the low tens of millions of dollars for minor facility modifications,21 LEU target and process development and implementation work, and regulatory approvals. Conversion might also be feasible even if extensive facility modification or new facility construction is required to support conversion. As noted in Chapter 2, for example, MURR estimates that it would cost between $30 million and $40 million to construct a facility adjacent to its reactor with two complete process lines that could be used to process either the uranium metal foil targets developed by Argonne National Laboratory or the LEU dispersion plate targets developed by CNEA. Each process line would have either three or four hot cells plus one additional common cell. Consequently, the committee judges that the $70 million in additional revenues available to MDS Nordion is probably more than sufficient to convert within existing facilities at the Chalk River site, even if some refurbishment of hot cells is required. Similarly, the $44 million in revenues available to Mallinckrodt for conversion would almost certainly support conversion within its existing facility even if the processing equipment needed to be modified. As noted previously, IRE told the committee that it has no plans to convert and did not provide a cost estimate for conversion. However, the committee judges it very unlikely that new facility construction would be required given the number of hot cells available to that organization. The committee judges that conversion is most certainly feasible for all large-scale producers based on the present value of additional revenues that would be available from a 10 percent cost increase in technetium generators or Tc-99m doses—even if producers had to build completely new facilities to process LEU targets. As shown in Table 10.1, the present value of revenues available from a 10 percent cost increase in technetium generators ($435 million globally) is more than twice the revenues available from a 10 percent increase in Mo-99 production costs ($170 million). The present 21 For example, modification of the hot cells themselves or the process equipment contained within them.
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Medical Isotope Production without Highly Enriched Uranium value of revenues available from a 10 percent cost increase in Tc-99m doses ($545 million globally) is more than three times the revenues available from a 10 percent increase in Mo-99 production costs. The forgoing discussion focused on fixed costs primarily associated with facility modifications and other one-time expenditures such as regulatory approvals. There could also be differences in variable costs that are not accounted for by this analysis. Such costs include labor, materials (e.g., for targets and chemical reagents), services (e.g., irradiation, waste management, and utilities), maintenance and repair, and taxes. The variable cost differences, if any, will depend on the specific conversion pathway selected by each producer. Because none of the four large-scale producers have selected a conversion pathway, it is not possible to estimate these variable cost differences. CNEA recently presented a comparison of its variable costs for producing Mo-99 using LEU and HEU targets (Cestau et al., 2008). As discussed in Chapter 7, CNEA converted from HEU- to LEU-based production in 2002. It estimated its variable costs for Mo-99 production for the 4 years prior to (1998–2001) and 5 years following (2003–2007) conversion. Costs were presented in three categories: (1) labor; (2) materials; and (3) services, maintenance, taxes, and miscellaneous. The costs were presented as present-value (see Appendix F) estimates normalized on a per curie basis for the number of curies produced in 2007. The results of the study can be summarized as follows: Labor costs (for LEU-based production) increased by about 26 percent (compared to HEU-based production) primarily due to the increased costs associated with fabricating LEU targets (more steps are required to fabricate these targets). Costs for materials decreased by about 1.9 percent. Costs for services, maintenance, taxes, and miscellaneous decreased by about 1.7 percent. Overall costs for LEU-based production compared to HEU-based production increased by about 5 percent. This cost increase is less than the 10 percent feasibility criterion mandated by Congress. However, the committee emphasizes again that HEU-based production costs are producer specific, and the variable costs of producing Mo-99 from LEU-based systems will also be producer specific and will depend on the conversion pathway selected. Nevertheless, this example illustrates that production of Mo-99 from LEU-based systems can be obtained for less than a 10 percent cost increase. As noted at the beginning of Chapter 1, one of the balancing interests that motivated this study was ensuring the continued availability of reason-
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Medical Isotope Production without Highly Enriched Uranium ably priced medical isotopes in the United States. For most medical patients and their insurance companies, the term “reasonably priced” does not apply to a 6-day curie of Mo-99 or a Tc-99m dose, but rather to the price for a medical isotope procedure. Although the analysis presented in this section has not addressed the impacts of medical isotope cost increases on the prices for such medical procedures, those impacts can be easily assessed. Note that cost increases near the top of the supply chain (e.g., cost increases for Mo-99 production) will have diminishing impacts on prices as they are translated down the supply chain (e.g., the price for a medical isotope procedure). For example, using the cost/price estimates developed in this section, a 10 percent cost increase for a 6-day curie of Mo-99, if translated down the supply chain, would result in about a 4.5 percent price increase for a technetium generator or about a 2.5 percent price increase for a Tc-99m dose. The impact on the price of a medical isotope procedure would be even smaller, as illustrated by the following example. In calendar year 2007, the Centers for Medicare & Medical Services reimbursement rates for two of the most common diagnostic imaging procedures, whole body bone imaging (CPT/HCPCS22 code 78306) and myocardial perfusion imaging (CPT/HCPCS code 78460), were $240.79 and $253.65, respectively. These reimbursement rates include the cost of the Tc-99m dose used in the procedures. A 10 percent increase in the cost of the Mo-99 that is used to produce the Tc-99m doses would translate to about a 0.1 percent increase in the prices of these procedures. A 10 percent increase in the price of a Tc-99m dose itself would only translate to about a 0.4 percent increase in these procedure prices. In other words, the increases in the prices of these medical procedures would be trivial given a 10 percent cost increase at any point in the Mo-99/Tc-99m supply chain. Consequently, if the congressionally mandated 10 percent cost increase for Mo-99 production is intended primarily to reduce impacts of price increases on patients, the committee concludes that cost increases for Mo-99 production many times greater than 10 percent would not result in substantial increases in prices to patients, assuming that such costs are passed along without added margins. In fact, the committee is aware of substantial recent price increases in the costs of Mo-99 and Tc-99m generators that exceed the 10 percent criterion set by Congress. These increases have not had any apparent impact on the availability or price of diagnostic imaging procedures. 22 CPT® (Common Procedural Terminology) and HCPCS (Healthcare Common Procedural Coding System) are coding conventions used to designate various medical procedures.
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Medical Isotope Production without Highly Enriched Uranium ADDITIONAL STEPS TO IMPROVE THE FEASIBILITY OF CONVERSION The last charge of the study task is to identify additional steps that could be taken by DOE and medical isotope producers to improve the feasibility of conversion to LEU-based production if such conversion is not currently judged to be feasible. As noted in the preceding section, the committee judged that conversion is feasible under the 10 percent cost criterion defined by Congress. However, no large-scale producers are currently producing LEU-based Mo-99 nor have they announced their intention to convert to LEU-based production. There is a good reason that current large-scale producers have not yet converted to LEU-based production: namely, there is no good business reason at present for doing so. Under current market conditions, producers would realize little or no direct revenue benefit from conversion, because it would not enhance product quality23 nor would it reduce the cost of production. In fact, conversion could require an up-front financial investment that would require producers to increase prices or accept lower rates of return on the commercial sale of Mo-99. The committee judges that additional steps need to be taken by producers and the U.S. government to improve the near-term feasibility of the conversion. Several possible steps are identified by the committee in the following discussion. Mo-99 Producers The three large-scale Mo-99 producers that cooperated in this study (Mallinckrodt, IRE, and MDS Nordion) have acknowledged the security concerns that are driving global HEU minimization efforts, and representatives of two of those producers (Mallinckrodt and MDS Nordion) told the committee that they see conversion as inevitable if commercially feasible (see also NNSA and ANSTO, 2007). The Canadian government has also committed to conversion to LEU targets as soon as it is feasible to do so.24 An industry association, Council on Radionuclides and Radiopharmaceuticals (CORAR) has expressed support for conversion but at the same time has asserted that conversion technologies are unproven. The work being carried out by Argonne National Laboratory and its collaborators on LEU-based production as well as the development of a 23 However, there could be indirect benefits of conversion, for example, being seen to support international security objectives associated with HEU minimization. 24 On September 4, 1997, the U.S. Embassy and the Canadian Ministry of Foreign Affairs exchanged diplomatic notes that offered Canadian assurances that LEU targets would be used to produce Mo-99 when such targets became available, provided that their use did not result in a large percentage increase in costs.
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Medical Isotope Production without Highly Enriched Uranium commercially viable LEU-based production system by CNEA have shown two viable pathways for conversion. However, the committee has not seen any evidence that large-scale producers are taking the necessary steps or have committed to a schedule for conversion. In fact, the recent developments at AECL appear to call the Canadian conversion commitment into question. Perhaps the most important step that Mo-99 producers can take at this time to improve the feasibility of conversion is to (1) announce their commitment to convert; (2) announce a best-effort schedule for conversion; and (3) identify needs for technical assistance, if any, to enable conversion. The committee judges that these steps would result in the following benefits: The commitment and schedule announcements would demonstrate that the industry is taking leadership of this important effort; it would also help to protect the industry against externally imposed solutions that might not be in its best long-term interests or in the best interests of medical patients. These announcements would serve as an important source of peer pressure within the industry that could help to push along producers that might be reluctant to convert. This step is critical for creating the “level playing field” that producers have identified as an essential precondition for conversion (NNSA and ANSTO, 2007). The identification of technical assistance needs would be an important first step in focusing the considerable R&D assets available in the U.S. national laboratories and from other technical organizations on conversion. Additional discussion of this issue is provided in a following section. Industry organizations such as CORAR and its European sister organization, the Association of Imaging Producers and Equipment Suppliers (AIPES), working with the scientific and medical societies concerned with Mo-99 production, can play key roles in marshaling, coordinating, and supporting an industry-wide conversion effort. DOE The committee judges that DOE, and specifically NNSA, can also take additional steps to improve the feasibility of conversion. First, DOE can expand on the good work being carried out by Argonne National Laboratory and the Idaho National Laboratory that is currently supporting conversion (see Chapters 2, 3, and 7) by making the considerable technical expertise of the DOE national laboratory system25 available to assist 25 This includes the laboratories run by the Office of Science, Office of Environmental Management, and Office of Nuclear Energy, which have considerable expertise with nuclear and chemical processing.
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Medical Isotope Production without Highly Enriched Uranium producers with conversion-related R&D. As noted in Chapter 7, producers generally lack the necessary expertise to do much of the R&D work that will be required for conversion. DOE could encourage producers to establish Cooperative Research and Development Agreements with national laboratories for this work and should examine options to share costs with producers as a means to incentivize the conversion process. Additional funding from Congress might be needed to allow DOE to provide technical assistance on a cost-sharing basis.26 Technical assistance by DOE could be structured to further HEU minimization goals. For example, cost sharing could be made available only after a producer has announced a commitment and schedule to convert to LEU-based production. To be effective, this technical assistance must be available to all producers who currently supply or might supply Mo-99 to the U.S. market27 and must be appropriately focused and scheduled to meet conversion timelines. DOE can also work with organizations in other countries (especially through its cooperation in support of mechanisms like the International Atomic Energy Agency’s [IAEA] Coordinated Research Project mentioned elsewhere in the report) to provide technical assistance to producers. CNEA and its sister organization Investigaciones Aplicadas Sociedad del Estado (INVAP) are global leaders in LEU-based isotope production technology, having converted their own process from HEU to LEU, and having built all-LEU production systems in Australia and Egypt. There are public-sector technical organizations in other countries with missions similar to the U.S. national laboratories that can potentially provide technical R&D assistance as well. Second, DOE could examine other opportunities available to it to encourage conversion. One possible opportunity in this regard is policies concerning pricing for HEU and LEU. The committee was told by DOE that its sales prices for enriched uranium for research reactors and targets includes all costs associated with the production of the enriched uranium product. This includes the fair market value for the uranium starting material as well as the full costs for the services required to produce the finished enriched uranium product. However, depending on the number and terms 26 Section 31 of the Atomic Energy Act of 1954 authorized the Atomic Energy Commission (and now DOE) to provide such assistance: “The Commission is directed to exercise its powers in such manner as to insure the continued conduct of research and development and training activities in the fields specified below, by private or public institutions or persons, and to assist in the acquisition of an ever-expanding fund of theoretical and practical knowledge in such fields. To this end the Commission is authorized and directed to make arrangements (including contracts, agreements, and loans) for the conduct of research and development activities relating to– … (3) utilization of special nuclear material and radioactive material for medical, biological, agricultural, health, or military purposes….” 27 Of course, DOE could as a matter of policy give funding priority to domestic producers.
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Medical Isotope Production without Highly Enriched Uranium of its long-term contracts with enriched-uranium buyers, DOE’s prices28 for HEU and LEU will not necessarily represent the current costs of producing this material. In fact, during this study, DOE prices for HEU were significantly lower than LEU on a common uranium-235 (U-235) mass basis (the committee received this information from both DOE and from a buyer of enriched uranium). Although the cost of uranium is a relatively small part of the cost of producing Mo-99, maintaining the cost of LEU so that it is at least no more expensive than HEU on a common U-235 mass basis would help to improve the economics of conversion. Department of State The Department of State plays an important diplomatic role in ongoing U.S. efforts to promote the conversion of medical isotope production from HEU to LEU. For example, the department negotiated the 1997 memorandum of understanding with the Embassy of Canada on conversion of medical isotope production to LEU (footnote 24) and is an important partner with the DOE on the Global Threat Reduction Initiative (GTRI, see Chapter 11). The committee judges that there may be opportunities for the department to intensify diplomatic pressure on countries that still use HEU for reactor fuel and targets to induce them to convert. In particular, those countries that are partners in the GTRI and have made a commitment to the “minimization of HEU” should be encouraged to live up to their commitment; this includes Canada, the Netherlands, Belgium, and France. Food and Drug Administration (FDA) As discussed in Chapter 8, the FDA is responsible for regulating the commercial sale of radiopharmaceuticals derived from Mo-99. Technetium generator producers have cited FDA regulations as a potentially significant obstacle to conversion because of the cost and time required to obtain FDA approvals for the sale of radiopharmaceuticals made with LEU-based Mo-99. The industry-wide conversion to an LEU-based Mo-99 production process is likely to raise several generic issues about Mo-99 processing and purity. The committee judges that there may be opportunities for industry and its associations and DOE’s technical experts to work with the FDA well in advance of industry-wide conversion to ensure that (1) there is a common understanding of LEU-based processes from a regulatory perspective and (2) that there is a good understanding of likely FDA requirements for obtaining regulatory approvals. 28 Actual prices set by DOE for HEU and LEU are considered business-sensitive information.
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Medical Isotope Production without Highly Enriched Uranium The committee is not suggesting that the FDA lower its review requirements or give the industry special consideration. The industry is ultimately responsible for submitting technically sound and supportable supplemental new drug applications (see Sidebar 8.1) for FDA review. Instead, the committee is suggesting that advanced discussions can help to clarify expectations and help industry to develop technically strong applications that can be processed expeditiously by FDA staff. U.S. Congress Conversion to LEU-based production of Mo-99 would serve a broader public good—namely, improved national security through the worldwide reduction of civilian HEU commerce. As discussed in Chapter 11, minimizing civilian use of HEU is a major component of the GTRI. There are currently no financial or competitive reasons for industry to convert to LEU-based production. The only reason for conversion is to support HEU minimization goals. One could argue that private industry should not be expected to shoulder the entire cost of obtaining this benefit, but that governments should also bear part of this burden. As noted in Chapter 3, governments are already involved indirectly in the production of Mo-99 through the support they provide to construct and operate reactors and processing facilities. However, there are additional steps that governments can take to hasten conversion. The U.S. government is sending inconsistent signals to current HEU-based producers about the urgency of converting to LEU-based production. On the one hand, the government is aggressively promoting conversion to LEU-based production through the GTRI. This study is part of that effort. On the other hand, the U.S. Congress has sheathed one of its most powerful tools for promoting conversion—the Schumer Amendment (see Sidebar 1.3). Clear and consistent policy signals from the U.S. government concerning conversion to LEU-based Mo-99 production and the importance of domestic production are essential for establishing a strategic trajectory for conversion efforts. There are a number of tactical tools available to the Congress to promote the implementation of such a strategy. The committee provides some examples below. Fund government cost sharing on R&D to support conversion as described previously. Condition the supply of U.S.-origin HEU for medical isotope production. Past efforts to restrict the use of U.S.-origin HEU for medical isotope production have so far been unsuccessful. Congress has at least two options for using its control of the U.S. HEU supply to promote conversion:
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Medical Isotope Production without Highly Enriched Uranium Reinstate the Schumer Amendment (see Sidebar 1.3) with a specific date to phase out the use of U.S.-origin HEU for Mo-99 production. A 7- to 10-year phase-out period would likely allow enough time for all current HEU-based producers to convert (see Chapter 9). Phase in a ban more gradually by prohibiting the export of U.S.-origin HEU for medical isotope production in new reactors. As noted in Chapter 3, at least two new reactors are expected to come online in Europe over the next 8 years. Converting these reactors to use LEU targets would probably promote the conversion of all European reactors to LEU targets.29 This phase-in period could be followed by a total ban on HEU exports for Mo-99 production. Provide temporary financial incentives for the production and/or purchase of LEU-based Mo-99. Several approaches are possible. For example, a production incentive could help to establish new domestic suppliers of LEU-based Mo-99 (e.g., MURR and B&W), improve production capacity, and therefore help to improve supply reliability. However, such production incentives could discourage foreign producers from converting to LEU-based production because new domestic production could reduce demand for foreign-produced Mo-99. A purchase incentive, on the other hand, would allow U.S.-based technetium generator producers to purchase LEU-based Mo-99 instead of HEU-based Mo-99 from both foreign and domestic producers. Such incentives could help establish domestic supplies and at the same time encourage foreign producers who sell Mo-99 to the U.S. market to convert. This would help to provide the “level playing field” for conversion that is desired by current producers because it would not discriminate between domestic and foreign production and would provide some “headroom” for higher LEU-based Mo-99 prices that would help to cover producers’ costs of conversion. Such incentives could be especially effective if they were coordinated with the phase-out of U.S.-origin HEU for medical isotope production to provide both a carrot and a stick for conversion. Any policies enacted by Congress must satisfy at least three important goals: (1) improve the reliability of Mo-99 supplies, especially domestic supplies; (2) avoid directing industry how to convert or selecting particular producers for preferential treatment; and (3) provide a level playing field for current producers who will need to convert and new producers who can supply the market with LEU-based Mo-99. 29 It would probably not be feasible to process HEU and LEU targets on the same process line, and so producers would have to choose a single design for Mo-99 production. There would be a strong reliability incentive to use a design that was compatible with a newer reactor.
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Medical Isotope Production without Highly Enriched Uranium FINDINGS AND RECOMMENDATIONS The committee developed the following findings based on its assessment of the first and last charges in its study task: With respect to the first charge to assess “the feasibility of procuring supplies of medical isotopes from commercial sources that do not use HEU,” the committee finds that: LEU targets that could be used for large-scale production of Mo-99 have been developed and demonstrated. These targets could be used in reactors and processing facilities that produce large-scale quantities of medical isotopes for the U.S. market. However, producers might have to make modifications to their facilities or process equipment to use these targets (see Chapter 7) and the targets must be compatible with existing reactors. At present, there are not sufficient quantities of medical isotopes available from LEU targets to meet U.S. domestic needs. However, the committee sees no technical reasons that adequate quantities cannot be produced from LEU targets. The anticipated total cost increase from production of medical isotopes without the use of HEU would be less than 10 percent for at least three of the four30 current large-scale producers (Mallinckrodt, IRE, and MDS Nordion31). This is true for costs at three points in the Mo-99/Tc-99m supply chain: Mo-99 production, technetium generators, or Tc-99m doses. In fact, a 10 percent cost increase for Mo-99 would provide very substantial resources for conversion and would have a negligible impact on the cost of common diagnostic imaging procedures. The committee recommends that producers and the U.S. government consider several steps to improve the feasibility of conversion. The steps discussed in this chapter include the following: Mo-99 producers. Commit to conversion, announce a best-effort schedule for selecting and implementing an LEU-based Mo-99 production process, and identify additional needs for technical assistance. Work with industry organizations and scientific and medical societies concerned 30 The South African producer, NTP Radioisotopes, declined to participate in this study. This organization uses South African HEU for Mo-99 production. It is in the process of converting its reactor to LEU fuel but to the committee’s knowledge has not announced a schedule for converting to LEU targets. 31 The finding that MDS Nordion could convert for less than a 10 percent cost increase assumes that AECL intends to continue production of Mo-99 over the long term as discussed elsewhere in this chapter.
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Medical Isotope Production without Highly Enriched Uranium with Mo-99 production for marshalling, coordinating, and supporting an industry-wide conversion strategy. DOE. Make the considerable technical expertise of the DOE national laboratory system available to assist producers with conversion-related R&D and examine options to share R&D costs with producers that supply the U.S. market as a means to incentivize the conversion process and encourage domestic production. Maintain the cost of LEU so that it is at least no more expensive than HEU on a common U-235 mass basis. Department of State. Intensify the diplomatic pressure on countries that still use HEU (fuel or targets) to induce them to convert. In particular, countries that are partners in the GTRI (see Chapter 11) and have made a commitment to the “minimization of HEU” should be encouraged to live up to their commitment; this includes Canada, the Netherlands, Belgium, and France. FDA. Work with the industry and DOE’s technical experts to ensure that there is a common understanding of LEU-based production of Mo-99 from a regulatory perspective and that there is a good understanding of likely FDA requirements for obtaining regulatory approvals of this isotope in radiopharmaceuticals. Congress. Provide clear and consistent policy signals concerning conversion to LEU-based Mo-99 production. Consider additional controls on the use of U.S.-origin HEU for medical isotope production and incentives to technetium generator producers that purchase LEU-based Mo-99 to motivate conversion and the development of domestic sources of Mo-99. Specific actions that could be taken are described in the preceding section.