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Goldman Sachs Asks: 'Is Curing Patients a Sustainable Business Model?' (cnbc.com)
Goldman Sachs analysts attempted to address a touchy subject for biotech companies, especially those involved in the pioneering "gene therapy" treatment: cures could be bad for business in the long run. "Is curing patients a sustainable business model?" analysts ask in an April 10 report entitled "The Genome Revolution." From a report: "The potential to deliver 'one shot cures' is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies," analyst Salveen Richter wrote in the note to clients Tuesday. "While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow."
Richter cited Gilead Sciences' treatments for hepatitis C, which achieved cure rates of more than 90 percent. The company's U.S. sales for these hepatitis C treatments peaked at $12.5 billion in 2015, but have been falling ever since. Goldman estimates the U.S. sales for these treatments will be less than $4 billion this year, according to a table in the report. "GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients," the analyst wrote.
Richter cited Gilead Sciences' treatments for hepatitis C, which achieved cure rates of more than 90 percent. The company's U.S. sales for these hepatitis C treatments peaked at $12.5 billion in 2015, but have been falling ever since. Goldman estimates the U.S. sales for these treatments will be less than $4 billion this year, according to a table in the report. "GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients," the analyst wrote.
Curing something does not mean you won't sell the same cure to the same person again. Just because you cured HepC, hell, even curing AIDS in a person does not mean they can't get infected again and need your cure again.
The number of diseases that grant lifetime immunity to it after you survived it once is fairly low.
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
No that's not why we don't have an AIDS vaccine, not even close.
As opposed to the rest of the 1st world countries which manage to have affordable and working health care systems. Canada, France, UK etc all have single payer systems with working hospitals and better health outcomes at a fraction of the price.
Computer modeling for biotech drug manufacturing is HARD!
There's a lot of misinfo and half truths in there ... I'll address some of the bigger ones:
1. Collective bargaining benefits exist in the US also. Insurance companies pay much lower prices than those cited, exactly because of their bargaining power. The costs you're discussing are costs outside of the insurance system, and as such aren't really comparable to anything in nations which control all sale/distribution.
2. Insulin has changed significantly over the years, and the prices for newer products are therefore higher. The newest generation of insulin is far safer and more effective than the stuff being made back in the 1930s. If you want some of the older stuff you can get it way cheaper in many markets.
3. Looking at solely the cost of production and then saying that "a 100% markup is insane" is just ridiculous. There are many other costs associated with these products, not the least of which are regulatory costs, and R&D. Pharmaceutical R&D in particular is insanely expensive. While the costs for R&D on insulin specifically may not be as high as some others, companies use profits from one product to offset general research costs, not just development costs of that one line.
4. I don't think you understand how patents work. You don't get to hang on to a patent for longer just by making small changes. You can probably get a new patent for your changed product, but the old patent will still expire. Once it expires, others are free to copy your old product. The issue in the US is that, if you want to copy an older form of insulin for example, you still have to jump through the regularity hoops to get your product approved for sale by the FDA. You also still have the usual marketing costs to try and make people aware of your cheaper product, AND you'll probably have to work to convince doctors to actually prescribe your cheaper version rather than the better, more expensive product. All of that is going to raise your costs quite a bit higher than just those "production" costs you were talking about earlier. The easiest way to get more generics on the US market would be to get the FDA out of the way by lowering standards or automatically accepting generics which are approved in other markets ... but then you're potentially sacrificing safety for speed (see Thalidomide, for example).
All that said, if you think that you can compete by making an older, cheaper form of insulin ... what's stopping you? Go fire up a Kickstarter to get some initial funding, get your business set up, and then maybe hit up some of the charitable foundations for funding. If you had a workable plan to bring low cost generic insulin to the US market (and actually succed in selling it) I'm sure you could get plenty of startup funding from, say, the Bill and Melinda Gates Foundation.
I hear lots of people like you banging on about the immorality of making money selling medicine, yet none of you seem to be interested in actually doing something about it. The only "solution" you have seems to be price controls, which is wonderful because it allows you to act morally superior without having to actually do anything. Just get the government to fix things for you; that's always the best solution!
Salveen is Indian. Also obvious from her instantly googleable photos, Ms Richter is clearly a practicing Hindu.
50 year Type 1 diabetic here.
> Insulin has changed significantly over the years
The purity improved drastically since its discovery in 1921, which is how animal source insulins became safer and less likely to cause sensitivities, basically allergies, that reduced their effectiveness profoundly. The patent for insulin itself was made public domain by its inventor. The release of "human" insulin, and the patents for making it, were an effective attempt to get new patents, not to provide medical benefit from a natural chemical which cannot be patented. There seems to be no measurable medical benefit to the human insulin molecule over animal sources, and there are some reports of medical deficits with it.
The folks at Novo are always *really excited* by the insulins. But the short acting human insulin only replaces the older regular insulin, and its speed of action is overwhelmed by the modern glucometer use and by the quick action of delivering insulin with an insulin pump. The longer acting human insulin based Lantus simply replaces NPH or UltraLente, older and cheaper ways to make insulin last longer. There is *zero* net benefit from the modern human insulins over the older and vastly cheaper animal based insulins. Using e. coli to make insulin doesn't actually improve it in any measurable way.
> The newest generation of insulin is far safer and more effective than the stuff being made back in the 1930s.
That is a false equivalency. Compared to the 1930's sure. Improvements in insulin effectively ceased in the 1970's with the last upgrade to "U-100" concentrations of insulin. The developments for insulin since then have been like the "new" and "improved" labels on detergent, or like marking farmer's market produce as "non-GMO". Very exciting and an excuse to charge more, but involving no useful change in the product and likely untrue.
Yes, the "human" insulins were exciting. But using the human rather than the animal insulins has no demonstrable medical benefit, and costs roughly 10 times as much. Insulin is *grotesquely* expensive due to the captive market and the basically fraudulent "upgrades" over the last 30 years.. A classic example of drug companies continuing to blow smoke up our asses is seen at the "article" at https://www.adwdiabetes.com/ar.... I've not seen such a nonsensical puff piece since Sarah Palin campaigned for Trump.
Cuba actually has the best health care system in the world, idiot.
Cost free eBook I read (by iBook/Kobo/Amazon/ObookO/Gutenberg etc.): "The Green Odyssey" by Philip Jose Farmer.
Man, these guys at Goldman Sachs are really stuck between a rock and a hard place.
On one hand, they have their investors to consider.
But on the other hand, they have their investors to consider.
Politics; n. : A religion whereby man is god.
Wow, you actually believe that.