A Political Meltdown

For decades, Canada has been a world leader in the production of medical isotopes. So why did the government announce that it was dumping the entire program?
Illustration by Doublenaut
If you’ve ever had a cardiac perfusion test to see how the blood was flowing in and around your heart or a bone scan to determine whether your cancer had metastasized, then you, like some thirty million people around the globe every year, have been the beneficiary of medical isotopes. What makes these unstable atoms so handy is that they can be injected, swallowed, or inhaled, and once inside the body they emit radiation from predetermined places. From there, their radioactivity can be used to kill off cancer cells or, far more often, to etch a detailed picture of your innards.

Canada is the world’s largest single producer of medical isotopes. In fact, they were practically invented here. Most of the world’s isotopes are made inside nuclear reactors. In Canada, they’re produced in one in particular, at the Chalk River Laboratories nuclear facility, northwest of Ottawa. And when, in November 2007, that reactor was unexpectedly shut down, large parts of the world faced their first real “isotope crisis.” Their entire supply had suddenly been cut off.

This was when isotopes punctured the national consciousness. Doctors offered daily updates like sports scores about the thousands of patients who would be forced to forgo tests and what dire consequences this might have. The Canadian Nuclear Safety Commission said the reactor, which is owned by Atomic Energy of Canada Limited, couldn’t be turned back on until a coolant pump was installed. Then parliamentarians stuck their noses in and voted unanimously to restart the reactor without the pump, overruling the nuclear regulator.

The government carefully framed the crisis as a medical calamity brought on by an overly persnickety regulator. The reactor was restarted in mid-December, and soon the hysteria died down. On the surface, everything went back to normal. But just a few months later, AECL abandoned two new nuclear reactors that had been built exclusively to produce medical isotopes. A year after that, Prime Minister Stephen Harper declared that Canada was getting out of the isotope business altogether. “For whatever reason,” he said, “Atomic Energy was not able to make that project work.”

To many of us who’d been following the saga, that announcement felt like craziness. We were turning our backs on one of the best gigs going. Demand for isotopes is growing, and it’s a niche business: churning them out in mass volume requires a reactor. Perhaps best of all, isotopes seem distinctly Canadian — a feel-good by-product of an unpopular technology, a sort of peacekeeper of the nuclear world.

But in time, what I learned is that our isotope fiasco wasn’t really the result of an overly strict regulator or incompetent engineers. The new reactors were shuttered, and the industry was dispensed with, because it was far from being the lucrative money spinner many presumed it to be, and Harper knew the truth: that isotopes were hemorrhaging millions of dollars from the public coffers every month. It turns out that the lust to privatize federal assets some quarter century ago drove us to make a deal so bad that it put Canada’s future producing isotopes in jeopardy. A deal so bad that it made better economic sense to forfeit the whole industry than to pony up and fix it.

The idea that radioactive materials could treat disease was pioneered in Europe and the US around the turn of the twentieth century, when radium, a product of uranium and thorium breakdown, showed promise as a tumour-fighting agent. Canada’s isotope reign began a little later, in 1947, with the construction of the National Research Experimental reactor (NRX for short), in Chalk River, which was for a time the most powerful and versatile reactor in the world. Soon after its completion, the NRX was shipping iodine-131 to various places around the world to treat thyroid cancer. It was Canadian researchers at the National Research Council’s Montreal laboratory who saw that cobalt-60 could be used to fight cancerous tumours; and doctors in London, Ontario, who were the first, in 1951, to treat a patient with it. Later, sales of our cobalt-60 beam therapy units pushed us to the forefront of nuclear medical technology. Profits from those sales helped finance research into further uses for isotopes, including sterilizing medical devices through irradiation.

These days, the most common medical isotope, used in about 80 percent of all nuclear medicine procedures, is technetium-99m. It starts out as highly enriched uranium, which is put inside a reactor, where it undergoes nuclear fission and produces a by-product called molybdenum-99 (pet named moly-99), which is extracted and purified and then placed in a lead canister called a generator.

Then it’s a race against time. The stuff starts to decay immediately. As it does, it turns into technetium-99m — the isotope we want. Moly-99 has a half-life of sixty-six hours, which means that within about three days half of it will have been transformed. Technetium-99m has a half-life of a mere six hours. Canisters of moly-99 are sped to a nearby airport, loaded onto a chartered aircraft, flown to an airfield near a hospital or a pharmaceutical company, and manufactured into the substance that will be used in medical tests and treatments. In just over a week, there’s no product left, so isotope manufacturers have to run a very tight ship.

By all accounts, Canadians did pretty well in the early years of producing and selling isotopes. According to the 2000 book Isotopes and Innovation: MDS Nordion’s First 50 Years, 1946–1996, by Paul Litt, 1980 revenues for AECL’s Radiochemical Company, which dealt with the isotope side of the business, had shot up by 30 percent for the second year in a row. Total sales were almost $49 million, $3.4 million of which was profit. Better yet, by 1982 the US Food and Drug Administration had given the nod to a whole new class of drugs known as radiopharmaceuticals, which utilize radioactive isotopes, and the future looked good.

Brian mulroney came to power in September 1984, with the most elected seats in Canadian history. He campaigned as an anti-patronage crusader and a debt slayer. (During the previous Liberal regime, the debt had ballooned from around $32 billion to more than $200 billion.) And, throwing a bone to the right wing, he also promised to sell off Crown assets wherever possible. It didn’t take long before his eye fell on AECL’s profitable radiochemical division.

According to Litt’s book, the 1985 budget pledged that the “operation of AECL will be rationalized and profitable activities commercialized.” Throughout its thirty-three-year history, there hadn’t been many profitable activities within AECL. The agency consisted mainly of physicists and engineers doing experiments and designing complex nuclear reactors, mostly to produce energy. If anything, the government saw AECL as a big money pit.

So in September 1988, the isotope division was wrested away from its parent. Like a child up for adoption, it was given a new name, Nordion International Inc., and a glowing spec sheet, then moved into the orphanage of the Canada Development Investment Corporation, where all Crown corporations awaiting new owners were sent to bide their time.

In the push to privatize, Fishery Products International Ltd., Air Canada, and Petro-Canada would all leave public hands by the end of 1991. But compared to airlines and oil companies, the isotope business was a tangled mess. The central issue was that it relied on nuclear reactors that would remain in public hands. AECL would continue to operate and maintain the reactors, and its workers would extract the raw isotopes; only the processing, sales, and distribution part of the business was to be sold. That was problematic for the seller as well as for potential buyers. While AECL produced the isotopes, it wouldn’t receive any of the profits.
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10 comment(s)

R.March 15, 2011 01:51 EST

Great article.
This entire ordeal is simply enraging.

sandyMarch 19, 2011 10:32 EST

puts me in mind of the Avro Arrow...
sadly

Bill MacCallumMarch 20, 2011 22:25 EST

All reactor isotopes are produced paraciticly, that is they use research reactors that are bankrolled by governments, and exist for other purposes. The Maple X reactor (originally estimated to cost ~$20 million) was to be the first designed and built specifically for the production of radioisotopes. The costs incurred by AECL would be incremental (operating, security, waste management, etc.) and this project should have been a profit center, contributing to, but not underwriting all AECL operating costs. This would be like adding strawberries to your produce department for incremental profit; no one should expect to operate a store profitably if you only sell strawberries.

MichelleMarch 23, 2011 23:20 EST

Great article! A refreshing look at how backroom deals made by a few impinge on us all. The art of illuson lives on thanks to Canadian beaurocrats.

BrucieBMarch 26, 2011 18:54 EST

This seems typical and sad nuclear science in canada like most things high tech are being discarded for the sake of political expediency driven by petro-dollars. Investments in R&D should be part of Canada's movement to market energy power plants for emerging economies, nuclear research and use of small modular reactors (SRM) technology like use of thorium-232 reactors. Politicians of liberal/conservative parties should educate themselves on real nuke science and not let anti-nuke flawed science in media pass for nuclear science.

JanetMarch 30, 2011 13:08 EST

The elephant in the middle of the room in this article is the extreme danger to all life, of nuclear reactors. That this article appeared for the April 2011 issue, when Japan is struggling to contain its nuclear accidents from earthquakes and a tsunami, is prescient. As a people, we Canadians have become so comfortable believing that radiation can diagnose and solve our medical problems, when it causes at least as many health problems as it solves. This does not even begin to discuss the total financial costs of nuclear energy, or the continual threats to the safety of the areas in which nuclear reactors exist. In the case of Japan, the winds carry water and air born radiation toward western Canada. We are being told that the radiation that is now found on the west coast from this accident, is so slight as to be non-harmful. I doubt this, and I must consider that this is only the beginning, as the problem has not yet been resolved at Japan's reactors. Japan is only one nation with reactors on large waters, and the affected reactors are only a few of Japan's total number of reactors.
Nuclear reactors require a lot of water to function at the best of times. When there are droughts, or high heat in summer, much more water is needed, such as occurred in France in 2003. The excessive need to channel water to the overheating reactors in France caused a lack of water available to people, resulting in deaths in the vulnerable, especially the old.
In diagnosing and treating medical conditions, the full life of radioactive substances is underestimated. The severe dangers and costs to create all the kinds of radiation used in the medical world are not included in understanding whether this is safe. The possibility of later health problems from having radiation diagnostics or treatment is not discussed, yet, a few scientists have warmed of this for years.
If we become caught in political reasons or health care reasons to champion nuclear reactors, we are blind to the horrible dangers of this technology. We need to decrease or stop its use completely. Even if all 404 known reactors in the world were shut down now, the cost in safely storing the present radioactive substances including the equipment that has become radioactive, the waste, and the substances themselves, is so costly, and will be so for thousands of years, that it shows how we cannot possibly afford to keep them running, as to do so is hugely compounding these costs in lives and finances.

Tom AdamsApril 01, 2011 15:05 EST

Thanks to Ms. Motluk for the very informative piece.

If we survey AECL's history in many lines of business, from historic heavy water production and organic cooled reactors all the way to present day retubing contracts, we see the same patterns — irrational confidence and blindness to risk. As the liabilities have mounted, the liabilities themselves became a guarantee of institutional continuity for AECL.

One of the craziest aspects of AECL's isotope business model is its reliance on weapons grade uranium. This reliance brought AECL into conflict with antiproliferation legislation in the US and resulted in the creation of vast quantities of heat generating, liquid nuke waste capable of criticality stored on the bank of the Ottawa River upstream of our capital city. As the whole world moved away from weapons grade uranium for research and isotopes, AECL fought a decades long rear guard action to keep the insanity going.

The circumstances surrounding the firing of Linda Keen deserve more investigation. Keen was pushing nuclear safety standards towards international norms, which started to freak out the Candu boys because they knew they couldn't measure up. Keen's initiative came just as the Harper government was looking to privatize AECL's Candu business line. In light of what we are seeing in Japan, it is worth remembering that the issue the government used as the excuse to decapitate the nuclear safety regulator was the security of back-up power to reactor cooling pumps. AECL lied to the regulator about having complied with an earlier order to upgrade the system. Keen's reaction — ordering a shutdown and full review — was exactly consistent with the CNSC's mandating legislation. Keen's replacement with a deputy minister seems to have been a big relief to the regulator's licensees.

Norm RubinApril 03, 2011 12:52 EST

Let me echo my former colleague\'s (Tom Adams\'s) appreciation for this thorough and carefully researched article!

Tom could have brought the parallel even closer, between the dispute that got Linda Keen fired, and ongoing events in Fukushima, Japan: What nuclear-regulator Keen was insisting on, before the NRU reactor could be licensed for operation, was the installation of a \"seismically qualified\" (=~ earthquake resistant) power supply to keep NRU\'s circulation pumps operating after an earthquake shut down the reactor! Instead, we got her dismissal, numerous government discussions behind closed doors, and a series of debates in Parliament, in one of which our PM famously promised \"There will be no earthquake!\" (In Japan, they\'re likely to find the corresponding official who decided there would be no 30\' tsunami, and I\'m betting he\'ll eventually be imprisoned for his obvious irresponsibility.)

But my main frustration with this remarkable article, is what I consider its failure to connect the financial dots. The \"profitability\" of AECL\'s \"Nordion\" radioisotope division was always mythical, since it included nothing — zero dollars — to reflect its biggest cost, the cost of building the NRU reactor that produced the isotopes! Indeed, late in the article, we learn that AECL did not even cover the OPERATING costs of producing the isotopes, but that\'s presented as if to prove that the government \"gave away the farm\" through over-generosity to MDS in the privatization of the division, rather than proving that NRU\'s isotopes were sold at a huge loss to everybody.

The simple fact is that it would have been easy for MDS and the feds to split the profits fairly, if there had been any profits to split, but there were only losses. Other short-lived medical isotopes are manufactured in linear accelerators at or near big hospitals, and their results are typically scanned with PET scanners. Both the accelerators and the PET scanners are typically supplied by large commercial companies, aka \"big pharma\". Those transactions ARE generally profitable to the suppliers (I am also assured by people far more expert in medical scanning than I that the images from these PET scans are far superior to those obtainable from Tc-99m scans.)

But the world has simultaneously been flooded with cheap below-cost Mo-99 (which \"breeds\" Tc-99m), produced in old government-owned reactors whose construction costs have literally been forgotten, operated by government agencies like AECL who naturally care much more about job security than about profits or risks. Not amazingly, the cheap \"drug\" has created a worldwide addiction, and Mo-99/Tc-99m has captured the lion\'s share of the diagnostic isotope market — not, apparently, because it is ACTUALLY more efficient or easier/cheaper than the competitors, and certainly not because it gives a better, more informative scan, but because government agencies managed to use Voodoo Economics to channel large amounts of taxpayers\' money into this money-losing foray into the world of medical products!

There is no easy way to determine what the market share of these isotopes WOULD be if they were sold the way prescription drugs and surgical tools are sold, rather than the way initial quantities of addictive drugs are sold. (In Ontario and much of Canada, it is just as difficult to determine how much electricity we would be using if it were produced and sold by businesses, the way natural gas is, instead of by agencies who are only accountable to the government in power, behind closed doors!)

But the fact that the sudden loss of a majority of the world\'s Mo-99/Tc-99m supply created so little apparent suffering suggests that their legitimate full-cost market share is only a small fraction of their recent market share.

Recent developments also suggest that accelerators can replace reactors to manufacture Mo-99, so we may be able to keep using it, when it makes sense to pay its production costs, without continuing to distort the world\'s use of medical diagnostic techniques by supplying it at silly prices — and without having to continue to build, operate, and decommission inherently hazardous reactors, operated by unaccountable and secretive government agencies like AECL.

AnonymousApril 04, 2011 14:04 EST

\"In mid-2009, AECL signed agreements with three Chinese entities to develop and demonstrate the use of thorium fuel in the Candu reactors at Qinshan in China.\" (source: world.nuclear.org). Thorium has been touted as a much safer alternative to uranium (source: \"Uranium is So Last Century\" wired magazine 2009/12). Wake up CANADA! With the right leadership, and political will, we can change the face of the nuclear industry forever. No more meltdowns, period! Selling AECL is shortsighted and fails to take into account intangible assets and benefits. The potential upside is obviously not being taken into consideration by the current government, which seems all too eager to sell out government assets for the short term benefit of covering the deficit.

allan ZMay 27, 2011 11:18 EST

Where is the accountability? To blame the Former Minister who has absolutely no culpability is absurd.There are men of vision buried in Deep River doing more for Chalk river than some of the current management.

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