“Is curing patients a sustainable business model?” asks Goldman Sachs (2018)
arstechnica.com
arstechnica.com
Parent's point is well received: it's much harder to be a startup when you need to fund laboratories, complex supply pipelines, diverse and deep know-how, interaction with government agencies etc.
It's not like you have AWS for medical doctors.
Until about 25 years ago, the normal bolus insulin was Regular insulin, which is just like what your body makes. However, injecting it into fat makes it work more slowly, so you'd take it a half hour before eating, and it would peak a couple hours later. Currently bolus insulins are a genetically tweaked version that allows the body to absorb it more quickly, within a few minutes, with a peak in an hour or so. In the human body, there's an even faster phase 1 insulin response, but to get it as a type 1, you'd need to inject insulin into a vein. It can be done, but it is considered extremely dangerous.
Basal insulins are generally regular insulin mixed with something to delay action or modified to do the same. Older ones like NPH needed to be taken roughly every 12 hours, but had a relatively high peak, which sometimes meant you needed to time a snack to deal with that. Newer ones offer a much flatter action curve, and can often be taken just once a day.
This is the right approach, both for a company and for society. In fact, it's so obvious, that it's weird anyone thought they needed a report to say it.
Even if you only look at the business side (instead of the human side), only developing chronic treatments instead of cures only makes sense if there's no cure on the horizon. Once there is a cure, the people who sell endless treatments will lose money (they'll make basically nothing & they'll have a lot of sunk cost they can't recoup), while those who sell the cure will make practically all the money.
Besides, the people who run companies also have bodies (who knew?)), as well as family & friends with bodies. Eventually they'll want those cures too.
Why would they release a cure when they could make more money releasing their own chronic treatment instead?
People will travel to rogue jurisdictions that choose to make money by defecting, some may even invalidate patents like India.
You can't go to India for a cure that doesn't exist.
Once there is enough research, you can have grey-ish market commercialization.
cancer immunotherapy works, and at times (maybe even often) is curative. Same with stem cells. Zolgensma, a one time cure that costs 2 million dollars, also exists.
Public goods funding as a thing also exists.
I'm not so pessimistic about it. There is still a profit incentive.
This is only true if a company is confident that all other companies are also not working on a cure. That may be feasible when dealing with a local service or commodity (as you only have to come to a wink wink agreement with other companies in the local area) or when only a few companies control a large amount of a limited resource (like OPEC). That does not work well when dealing with an idea or technology.
Any company anywhere in the world could decide to research a cure. A Nation State-run research group could do it and just give the patent away. It is virtually impossible to get all of them to not research it, and if any of them anywhere find a cure, your treatment profits fall off a cliff. So it makes fiscal sense to sell the treatment, use your market position to get the best data on the condition, and research a cure so you can be first to market and control the distribution of the cure and ensure that the profits go back to you.
The more complicated answer is that if it's something poorly-understood where you came make different-but-similar treatments that will work better for some patients than others, and the current patient base isn't fully covered, there's still lots of incentives for treatment. Look at something like chronic inflammatory/immune stuff, and all the biologics out there.
But then the answer to "why didn't someone just develop a cure" isn't just economics and greed, but also nobody knows how.
In the surgical space, we actually do push expensive procedures over chronic therapy fairly often for things like joint or back issues. Of course, in that case, the economics are obvious - the surgeon and facility make their money that way. So if you can similarly convince the governments and insurance companies that your expensive cure is gonna save money compared to a lifetime of treatment (for surgery, this is being increasingly questioned, even), you can charge a lot for it.
Because the probability of finding a cure, chronic or not, is extremely small.
The right approach for a company is to give up making medicine. Why would you spend billions of dollars on scientists to research a cure and fighting the bureaucracy for its approval, only to have the people and the government turn around and scream at you that they cost too much, and demand you should give them away for free? Heck, just look Biden giving away the coronavirus vaccines — not buying the vaccines (or licenses to the vaccines) and giving them away, which would be eminently defensible and a fine expenditure on foreign policy outreach — just saying it'd be fine if no one enforced the IP rights on these things, giving away someone else's work.
So forget it. If the dollars work out so that the smart investor should spend his money on something else, it will happen. Will this result in fewer cures? Yes, but society has decided punishing people for making money is a more important priority than actually finding these cures, and our democracy operates on the premise that we've made our bed, so we can damn well sleep in it.
(There will of course continue to be a few cures coming out of publicly funded research and academia, but if they need to fight for grants with every other project out there, there's no way they'll have enough money to have the same output.)
Prior to Sovaldi, the best selling drugs were Lipitor, then Humira which made ~$10B per year at peak worldwide (peak being a decade or more post launch). Think about the time value of money when your R&D investment hit peak revenue 10-15 years later.
Sovaldi made $12B in its first year full year. What did Gilead make across all its hepatitis C drugs that year? $19B. That blew all records out of the water. And 6 years later it’s pulling in $4B. Note this is in an industry where exceeding $1B at peak is a success.
The hepatitis C cures are an absolute blockbuster by any stretch of the imagination.
https://www.evaluate.com/vantage/articles/data-insights/hep-...
We also need to start putting in sunset provisions in laws of this nature. Governmental intervention in the economy should have mandated expiration/review dates.
So 100% nationalizing them would change the cost of a $300,000 per year treatment to ... $270,000 per year. Nobody is waiting for that. Frankly even a 30% reduction, the top of the line, would not really matter to people.
The only thing separating medicine and the profit motive will do is stop the development of new drugs. There's no way in hell the government will invest even 10% of what the private sector invests in new drugs. That would be a 10000%+ budget increase for universities. It's not happening. So drug and treatment development will slow to a crawl. So is it better to die because no-one cares to look at you at all than to die because someone doesn't want to pay for your cure?
Apparently it is, according to responses here, but I truly don't understand why.
And if that's what you want to do, let people die, then why not just legislate that you can't buy coverage for diseases with <N cases per year? That would avoid all the inefficiency.
MRI scans, which could sometimes mean the difference between life-saving diagnoses, or a missed diagnosis, were cheaper and easier to come by in the U.S. because clinics could run a scanner at a profit and specialize in MRI scans. Locking them away under government rationing destroys the cycle of signal and response a market can bring. We've seen this in other countries where it is exceedingly difficult to get one when you need one.
That doesn't mean there aren't sensible cases for government-funded research. But looking at the current health system with massive government interventions already in place and saying the problem is not enough government intervention seems like a mistaken conclusion.
Well, I don’t know which country you refer to but it’s not the case in France and lots of European countries where healthcare is totally free.
Yes you have to wait months for a scheduled PET scan or an MRI but you also can have access to one as soon as you enter the hospital as long as the medical team think it may save your life. It’s just ressource planning. I know it because it saved my life twice and for 0.00€.
edit : Just to be clear, I’m not writing this as « US bashing » but to help you consider that free and effective healthcare is totally possible and that working models already exists around the world. Free healthcare IS a solved problem.
Now you don't get 5 star service that the private healthcare has like luxury rooms and better food, but that's not the core focus when your life is on the line.
It seems simple, but only if you know it. Managing means you have at least two factors that form a 'dynamic,' so that there is a differential between them that you can extract variable levels of value out of. Managing a team means you have different people whose work is like cylinders of an engine firing at different times to create continuous motion. Some people have a knack for maintaining the equillibrium that produces power. Managing a product is a dynamic of market demand and feature cadence that produces sales.
From this perspective, a disease is a dynamic, however dubiously ethical it may to treat it as one, whether as a business making money or a government effecting policy.
However, curing patients is only a business model insomuch as you can produce cures dynamically to create a cure-machine to rent out. From a business perspective, curing diseases is zero-sum and destroys long term value. If you cured covid, the ~$100bn+ of value you created would be a one-off, and it would remove a powerful dynamic from both government and industry, and just be another relatively small capital management problem instead of a long term growth disease mangement problem, like say, periodic booster shots.
Solving problems collapses uncertainty and in-effect, destroys opportunity for people who use the dynamic to manage the world. Viewed this way, disease management is not a conspiracy, it's just a lot of people with a certain skill set who respond to the same incentives. It's truly a banal sort of evil.
(edited to remove digression)
There's also an episode of Star Trek: The Next Generation in which one alien planet has hooked a second alien planet's entire population on addictive drugs, having convinced the addicts that withdrawal symptoms are a terrible, incurable disease that the drugs are treating.
Historically, many cultures put medicine and spirituality under the same umbrella. A "medicine man" was both a spiritual leader and a healer.
You need someone to actually care about you to get you well. When their relationship to your disease is rooted in profit motive, the end result is torturing you so you die slowly.
This needs to stop.
I don't know how we fix our medical system, but such things exist to serve humanity. Humanity should not be a prisoner or slave to such garbage.
Taylor et al. have been studying effects of short-term fasting on diabetes 2nd type and they claim that they can cure or at least significantly improve the condition by fasting, especially if the fasting therapy is introduced soon enough after the initial diagnosis of T2D. Even NHS England is paying attention to their work.
https://www.ncl.ac.uk/magres/research/diabetes/reversal/#pub...
This is about as cheap cure as it gets. Eating nothing for some periods of time does not cost any money and there are no patents/royalties attached. The only trouble is that it might be less comfortable than taking pills.
If Taylor is right, we could get rid of a significant part of our disease burden. Fast food producers would fall on harder times, though.
Maybe we need to start paying for cures like we do chronic treatments?
Ultimately you're never going to be able to coax the market into valuing 40+ years of rent over a cure.
More and more as our capabilities increase we have more options than ever before in deciding what to do and how to do it. In the past, any treatment for any prevalent condition was a no-brainer benefit to society.
Now we're heading into territory where our government+economics+capitalism is a solution to an X-Y problem. There will come a tipping point where capitalism is less efficient than alternatives. Healthcare is perhaps the largest, most visible, and pressing one of these. Once we recognize the pattern, more will become apparent.
Because the USA pays massively more than anyone else for its medicine, it's logical that the USA has more pharma industry, producing more medicine, than anyone else.
But because the US Pharma industry is profit-driven, as TFA says, it is interested in making only profitable medicine. And as TFA says, curing things may not be profitable.
If the USA adopted socialised medicine, would we see less drugs but better outcomes? Would the pharma industry get more spread out, and less focused on making vast piles of cash in the USA and more focused on actual cures for everyone?
Put it like this: does a hypothetical Indian biochemistry genius with a passion for solving hard pharmaceutical problems work on some interesting but tricky disease in India that could save millions of lives, or do they go to the USA to earn lots of money creating expensive drugs for not-so-many rich people that doesn't even cure them?
In any case, the basic research behind >90% of US drug inventions is publicly-funded, with private companies productizing this research and reaping huge profits:
>This report shows that NIH funding contributed to published research associated with every one of the 210 new drugs approved by the Food and Drug Administration from 2010–2016. Collectively, this research involved >200,000 years of grant funding totaling more than $100 billion.
Expensive treatments only seem bad when they're just about within reach then people pour all their money into it. Normal people just get old and die because there's nothing available to save them at any price.
It's a bit of both in my country with free healthcare because some treatments aren't funded by the government so poor people just die or endure the chronic condition while those who can afford it have the option to pay full price like those unfortunate Americans.
She was studying a potential product to 'cure' some disease or other. Apparently her initial tests on the company's product worked amazingly well, removing all trace of the disease with just a few doses.
She was excited to report this success to her boss, who replied "That's Horrible!". The company wasn't interested in a cure that requires only a few doses, but something that requires a longer-term rent-seeking subscription plan.
I would need more proof before being able to believe an executive team would throw away a sellable cure for an extremely low probability of finding a longer term rent seeking subscription plan.
As an example, the new Hep C medications are $80k+ per dose or something if I recall correctly, and Medicaid pays for it.
The latter, as reported by GP, doesn't seem very plausible.
Source is in this video, link starts at 5:35, watch until 8:15ish. https://youtu.be/J8vdDy7SN9k?t=335
The purpose of patents is to allow for a period to earn an ROI and then release it to everyone. Alternative could be taxpayers paying for it and it going into the public domain immediately.
no, that parenthesis, (in increasing amounts), is a feature of capitalism, not inherent to all human motivation. the need for ever increasing income stems from the need to provide capital investors with a return.
But I do not claim this is a scientific conclusion, I simply landed on this model as it seemed to match up with my reality.
What is attractive is social status - in capitalism this is linked mostly to wealth but that's not a given at all. Another thing that's attractive is stability, but that doesn't have anything to do with consumption, in today's world it means having stable access to housing, ideally owning it, mainly.
Having access to shelter in a desirable place is currently one of the best signals about one's ability to procure resources and I would categorize it as consumption. You can have stable access to housing where few people want to live, but it will not help you in attracting from a larger pool of mates (if that is your goal).
Its not a signal of the ability to procure resources, it's that housing is the single most major cost and homelessness is the most major financial risk. What's attractive about it isn't that you can consume endless amounts of plastic and steel by proxy, it is that you eliminate risk.
In my opinion, that one can afford the single most major cost and avoid the most major financial risk is a possible signal of the ability to procure (or defend) resources.
>What's attractive about it isn't that you can consume endless amounts of plastic and steel by proxy, it is that you eliminate risk.
I agree. But I choose to define the word "consume" in this context to refer to being able to walk away with a contested resource. The more contested the resource, and the more you obtain of it, the more you signal your ability to procure and defend it.
That is why I distinguished access to housing in places with high demand versus access to housing in places with low demand in my previous post.
Even in places with low demand stable access to housing is still attractive. It's just rarer in places with high demand. This is reproduced in many cultures, for example in some Arab countries "renter" is an insult to someone you are dating.
I do not understand what you mean by this, but I do not claim that "all housing does is signal income".
Let me re-characterize my statement for the basis of this discussion, which is that the vast majority of people would have an ideal goal of earning an ever increasing amount of money, regardless of capitalism.
My contention is that due to the way people rank themselves versus each other, they will be interested improving (or at least maintaining) their position in the rankings. Why would they want to rank themselves? I posit that it helps for attracting mates. One can even go deeper and attribute it to the function of an ego, or some mechanism in the brain that incentivizes one to assert their priorities over others', allowing them the ability to not only survive, but compete.
Going back to your initial reply:
>What is attractive is social status - in capitalism this is linked mostly to wealth but that's not a given at all. Another thing that's attractive is stability, but that doesn't have anything to do with consumption, in today's world it means having stable access to housing, ideally owning it, mainly.
I agree that it is about social status, which is what I am referring to by people ranking themselves (and each other). But money or not, the root of the ranking is power. Who has more power than who. Money is a proxy for power, which can exist with or without capitalism, so as long as there is money, I would bet that people (in general) will want more and more of it.
It would never be the case that a single researcher does some tests and reports them to the boss except in the very earliest stages of drug development. The "boss" in this situation would be another research scientist, far removed from business strategy.
Even then, success in a petri-dish doesn't mean much - it would be years of research with a large team to determine if it was safe and efficacious in human trials.
The idea that the pharma industry suppresses viable medicines because they are "too good" is just conspiracy theory.
By the time a company has spent that amount of research effort and money, there's no way they'd just abandon a drug because it isn't rent seeking enough. Businesses want to recover whatever investment they can.
There's little reason NOT to make money on a developed drug.
Could create it and make a profit selling it.
If the cure generates less profit than current treatment, and if you’re currently selling treatment, then that’s not going to be worth it for you.
If you don’t, well you still need to get it to market, which requires substantial investment.
My point is that the described scenario is not entirely unlikely. For example, type 1 diabetics in the US need something like $600 worth of insulin, every single month for the rest of their lives. Say that’s 60 years, you’re looking at $430k, not even counting needles, sensors, and other stuff they might need (or absolutely need). Average patients won’t be able to cough up nearly as much for a cure.
Pharma has just been way faster than tech in realizing that the subscription model has far better yields.
Your idea only works if you believe there is a global conspiracy of businesses and scientists who all agree to embargo research into cures, and who are all willing to forgo any profits on the cure while also recognizing any scientist and company not in their conspiracy could wipe out their profits at any time.
There is no "global conspiracy" required at all. Not actively doing research towards reducing your own profit is enough.
Outsiders could theoretically come in, yes. But the hurdles are huge for biotech startups, and of course the established players are lobbying to keep it this way, so I won't be holding my breath. It's different from the tech world.
There is no need for a global conspiracy. Just a little lobbying.