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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.
"Slashdot asks: Is posting fresh stories a sustainable business model?"
Ezekiel 23:20
Time to blacklist anyone working at goldman sachs from getting any sort of cure.
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.
If your competitors can't. If you develop a treatment and your competitor has a cure then your business is flushed down the toilet while your competitor gets rich. So unless the biotech companies collude with each other there is always the risk that a competitor will produce a cure killing your business, so you had better get there first and kill their business instead.
Yes, bloody idiots.
The longer the person lives the longer he might be a client of various medical/pharmaceutical companies because we're not getting younger and healthier with each passing day.
The main problem is looking at health care as a profit driven business in the first place. Take a look at Europe / Scandinavia for examples of much better models.
Many of us here probably know people who convinced that a cure for all cancers already exists, but somebody big (the government, pharma, maybe both) doesn't want it out because the revenue stream from current expensive treatments will dry up. This just feeds into their arguments that big business is against us all.
The drug companies already avoid cures, as that would eliminate their customers.
They just make drugs that temporarily suppress symptoms (and often introduce others) just so they have a repeat customer base.
There are two choices, and they have their detractors:
1. Socialism: We all pay for this and enjoy the benefits of a healthy society.
2. Ferengi: Mortgage. Because the treatment works so well, it is also expensive, and the only way to finance it is by taking a lifetime loan. If you need a second treatment, better take a second mortgage then.
"Everybody's naked underneath" -- The Doctor
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!
...and that is the reason why we don't have a cure for cancer etc.
This is simply bullshit. You may not like the treatment but most forms of cancer can be successfully treated.
As long as we accept that the medication for keeping people alive is as expensive as it is there is no economical drive for curing.
Funny as vaccination is one way to preemptively "cure" diseases and all Scandinavian countries vaccinate for instance against HPV which can lead to cancer. So how did that vaccine get developed?
btw. Scandinavia is better but is far from perfect, much of our medico has been sold so now we pay 500% more for medication than we would if we have kept them.
Medico? Also citation needed (and you'll obviously not provide any).
Politicians have been cutting the health budget so we are now in a situation where we look at the "do this patient need to survive or would it be better if he/she died" problem.
That is obviously wrong. It sounds like you are one of those that can't accept that someone will die and that it would be more dignified not treating that person.
Medical ethics is a thing and knowingly causing suffering when that suffering can't cure or enable a longer/more dignified life goes against that ethic.
I am actually from Scandinavia end I live in Scandinavia.
Scandinavia isn't a country, your generalization is wrong. I frankly doubt you are telling the truth given this should be obvious to someone living in a Scandinavian country.
This statement of what should be obvious is a great service. They are saying what we have suspected for quite some time. That the for profit biotech business model is very likely against the best interests of individuals and society in circumstances where there could be a cure for disease.
Society and individuals have great interests in curing people at least cost. Biotechs clearly have the contrary interest of creating treatments that create dependency and not cures. Having this stated succinctly is the kind of frank discussion we need.
The answer isn't immediately clear, since there is nothing wrong in finding treatments that make people's lives better. And if there is "no cure" then a treatment is better than nothing.
If cures are being ignored because resources are all going toward predatory dependency inducing treatments (like the opiods), then government regulation that encourages more free market competition to push the business interest further towards making cheap cures and better treatments should be on the table. In a free market would you rather pay a doctor to cure you or to just treat your symptoms? If there is only one doctor in town, then good luck. If there is only one doctor in town because government makes it so onerous to become a doctor or stay in private practice... then shame on the government. Likewise many government regulations appear to benefit big pharma and big biotech. Yes quality is of great importance when lives are on the line, but innovation is also of great importance when lives are on the line and we see areas of stagnation in medical advancement with only expensive treatments making it to market.
Also on the table should be treating the discovery of cures as a critical public interest to be funded with more government dollars instead of private. Government funded research has a mixed track record also. But here too there should be a big enough pool of money that it allows for sustained competition between the Universities and non-profit, or even for-profits getting grants.
The government should be in the business of making sure we have a healthy and efficient free market and stepping in with regulation, policing, and even some money when we don't.
No, it's actually about high time somebody asked this question.
I've recently been thinking about this a little in terms of game theory: Insurance companies see medical care as an expense and premiums as income. Patients see medical care as a benefit and insurance premiums as an expense. This has led to a system with a whole lot of problems, but the fundamental flaw is that the two sides have fundamentally conflicting goals.
How can we rework this into a better system?
The first thing we need to do is define the goal of the system, and "longer average lifespan" seems like the right goal. We can also add a quality of life rider by saying that anyone can check out if their life becomes unbearable, with lots of safeguards against coercion and suicidal depression and such. (I imagine a process similar to sex-change operations - the patient has to really want it over an extended time, and have psychiatrist buy-in.)
With "longer average lifespan" as the goal, now how do we pay the doctors?
One answer might be to assign to the *doctor* (primary care physician) a monthly fee per patient, regardless of that patient needing medical service. If patients could switch to a new doctor at any time and for any reason, doctors would then have incentive to a) provide the best medical care, b) compete with each other for quality of service, and c) keep their patients healthy, happy, and long-lived.
This seems to work at the "primary care physician" level, but it isn't a good fit for specialist and above, hospital care and ER. The PCP should feel free to refer a patient to a specialist without incurring a drop in salary, and an ER doc should have incentive to save a patient's life without regard to payment.
Also, medical research should be included, so that there's incentive to cure diseases instead of masking symptoms.
Anyone good at game theory like to add to this model?
Drillem, Billum, Killem and Chillum. Seriously, there is a whole class of human endeavor that is not made better by the profit motive. Healthcare certainly belongs in it. It is something that should be pursued by practitioners and institutions to improve the public good not to get filthy rich. Charging large sums of money to prolong life is essentially extortion. Most developed societies recognize this by having long ago instituted single-payer systems. It is expensive, but demonstrably such a system vastly improves the society's productivity and quality of life from the bottom up -- a measurable plus economically. And, besides, it is just the decent way to run things.
"No fear. No envy. No meanness." Liam Clancy
"Cancer survival rates" are a baloney statistic. What matters are mortality rates. If I diagnose a cancer earlier and the treatment does exactly nothing, my survival rate improves while the mortality rate stays the same. In fact, if I can diagnose false positives, my survival rate looks even better while mortality stays constant. The more harmless lumps I remove from the breasts of healthy women, the better and better my survival statistics look.
Measured by mortality rate the US is not substantially better or worse than any other rich industrial nation, including the UK. It is a myth that the US system is better at all.
That is basically the ancient Chinese model. Everyone living in the same lock with the doctor payed a monthly fee.
Got he sick, he stopped paying and visited the doctor. As soon as he was cured, he payed again.
I'm not sure this would work under game theory, because people would have an incentive to get out of paying by claiming to be sick when they're not, or get out of paying by going to the doctor for trivial reasons.
For the system to work, there can't be any monetary incentive to "game" the system. The system has to be viewed from all angles, and cheating and other abuses have to be eliminated from the point of view of incentive.
The Jews in India came to India when the early Christians were massacring them for being complicit in the death of Christ. Hindu kings gave them sanctuary. Hindu kings also gave sanctuary to early Christians when the Romans were oppressing them. They gave sanctuary to Zoroastrians from iran when the Iranians were being forced to convert to Islam. India has a long tradition of sanctuary and allowing people to continue to practice their religion. This is a function of the Hindu religion which is Polytheistic with many gods. For a typical Hindu there is no contradiction in someone believing in a different god - for all they care it's just one more God in the Hindu Pantheon whether the god is called Jehovah, Jesus Dad or Allah.
**Life is too short to be serious**