In an April 10 financial report titled “The Genome Revolution,” company analysts allegedly posed the question “is curing patients a sustainable business model?” The report broke down the pros and cons of new gene therapy treatments being worked on by biotech companies. Turning the search for medical remedies into a numbers game, analyst Salveen Richter called potential “one shot cures” a bad business decision that will hurt a company’s bottom line...Offered without comment.
Goldman researchers pointed to pharmaceutical company Gilead Sciences, which developed a treatment for hepatitis C, as an example of the financial impact treating diseases can have on profits. “In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients,” the memo argued.
03 May 2018
"Is Curing Patients A Sustainable Business Model?"
That's the question asked by financial analysts at Goldman Sachs.
OMG!
ReplyDeleteNo surprises there at all.
ReplyDeleteI'll comment, first by stating that I am concerned with companies that put profit ahead of what's good for the consumer, but I don't see much about that in this report other than a knee-jerk reaction to an uncomfortable question.
ReplyDeleteIn reports like this it really troubles me what media decides to focus on. The question "Is Curing Patients A Sustainable Business Model?" really is an important question to be asking. Because if companies that develop cures are unable to do it in an economically sustainable manner then they are not going to be able to stay in business and we are going to see fewer companies investing in cures.
So I don't have a problem with the question. I don't even have a problem with the conclusions that "'one shot cures' [are] a bad business decision that will hurt a company’s bottom line" or "it could represent a challenge for genome medicine developers looking for sustained cash flow." This is really what reports like this are for. And the statement “In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients,” is given with no context other than implying that these kind of treatments negatively impact profits.
These kinds of reports are very important for making business decisions. What is sorely lacking in this kind of reporting is any kind of discussion as to what kind of decisions are being made. If a company decides not to invest in a cure because there wouldn't be a good return doesn't necessarily make them evil. They might be concerned with how it will impact their stock, or they might be concerned about this cure's impact on their ability to continue to develop other cures. I certainly suspect the former, but that could be how I've been conditioned to think.
The kind of followup questions that need to be asked are along the lines of "If these kind of positive cures are bad for business, what can we do change the business model?" I would hope that some of the companies out there are doing that. And I wish that the media would ask those kinds of harder, more thought provoking questions rather than fomenting outrage at the questions that make us uncomfortable.
I don't disagree with you, and I quite understand that Goldman Sachs' role is to analyse profit/loss and business models, not to optimize health care delivery.
DeleteOne solution for developing non-profitable therapies/cures is to assign that role to government (federal or state), because it is their citizens who will benefit, and the state/country would theoretically then profit from healthier citizens.
However, developing a magic bullet (?gene therapy) for diabetes for example would devastate existing businesses that produce insulin, oral hypoglycemics, monitoring devices, etc. So there's that.
It sounds an awful lot like an anecdote, which I will try to find some evidence for, about the Russian generator industry (LARGE generators) that we talked about in poli sci years ago.
ReplyDeleteThey produced the heaviest generators/Kw in the world during this period of time. Huge things and seemingly unable to be miniaturized or engineered stronger but lighter.
The motivation just wasn't there.
They were being paid based on the weight of the generators.
It is used as a classic example of what incentives (perverse or unintended incentives) can accomplish and why they must be managed.
And the managers are the regulators. Which makes sense.
But then there is regulatory capture either via corruption, promises of future benefits, or industry infiltration of what should be the job of career political scientists.
And the idea that government should be run like a business? Not unless that means growing an uber educated populace that knows how to act like adults and has the smarts and know-how to show the world how tomorrow will be shaped by looking at our problems and dealing with them. And let ME list the problems in case there is any confusion (right?)...
Eh, but what do I know.
Glad your Mac is happy again ;)
Like chiropractors. "Would you like to book your next appointment"
ReplyDelete