study task, and also to clarify whether Congress intended to specify the point in the supply chain where this cost differential was to be estimated. Dr. Lyons told the committee that Congress did not intend to specify a particular point in the supply chain, and he recommended that the committee should use its best judgment in deciding how to develop these estimates.

The committee recognizes that its report will have several audiences (e.g., the sponsor: Department of Energy-National Nuclear Security Administration [DOE-NNSA]), Congress, and medical isotope producers and users) that will be interested in costs at different points in the supply chain. The committee also recognizes that its report could be used by Congress and NNSA to inform future policy decisions that could affect the availability of HEU for medical isotope production. The committee judged that its report would be most useful to all of these audiences and purposes if it provided cost estimates at several points in the supply chain.

The committee concluded that it could develop reasonably accurate cost estimates at the following three points in the supply chain:

  1. Costs to medical isotope producers for making Mo-99;

  2. Costs to radiopharmacies, hospitals, and clinics for purchasing technetium generators loaded with Mo-99;

  3. Costs to patients (or their insurance companies) for purchasing Tc-99m doses obtained from these technetium generators.

The next section of this chapter describes how the committee estimated costs at these three points in the Mo-99/Tc-99m supply chain. Subsequent sections present the cost estimates. The timeframes for the estimates are specified where they are presented.

APPROACHES USED TO ESTIMATE COSTS

It is important to recognize that the cost estimates developed by the committee do not need to be exact to meet the needs of this study. The National Academies were asked by Congress to estimate the potential cost differential for producing Mo-99 from HEU-based versus LEU-based production systems. As discussed in Chapter 10, the variability in costs identified in this chapter, which are substantial and judged by the committee to be real, greatly simplifies the analysis.

In conventional business terms, the cost of producing an article includes both the fixed costs associated with construction of the facilities used for production as well as the variable costs attributable to production and distribution. When that article is sold, the price to the purchaser of that article reflects the producer’s cost for making it, plus a premium that reflects the



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