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Utopia Talk / Politics / Healing patients is no business model
LazyCommunist
Member
Fri Apr 13 04:09:53
Capitalism is retarded

http://www...ustainable-business-model.html

Goldman Sachs asks in biotech research report: 'Is curing patients a sustainable business model?'


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."

"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. "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, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise."

The analyst didn't immediately respond to a request for comment.

The report suggested three potential solutions for biotech firms:


"Solution 1: Address large markets: Hemophilia is a $9-10bn WW market (hemophilia A, B), growing at ~6-7% annually."

"Solution 2: Address disorders with high incidence: Spinal muscular atrophy (SMA) affects the cells (neurons) in the spinal cord, impacting the ability to walk, eat, or breathe."

"Solution 3: Constant innovation and portfolio expansion: There are hundreds of inherited retinal diseases (genetics forms of blindness) … Pace of innovation will also play a role as future programs can offset the declining revenue trajectory of prior assets."
Seb
Member
Fri Apr 13 07:10:24
Sounds like the quote in the report is saying long term treatment also shrinks the market so any idea that this is preferable to one shot treatments is not well founded.

Instead, focus on large markets, common diseases and innovate as rent seeking strategies around treating chronic conditions is a an illusion: inevitably going to be a shrinking market due to both genomic medicine and reduction in disease spread and new cases due to treatment.
Seb
Member
Fri Apr 13 07:11:23
I.e. it's the opposite: healing patients *is* a business model, and the preferred one.
Aeros
Member
Fri Apr 13 10:18:25
This is the thing. Money is not going to just sit around doing nothing. If we weren't spending hundreds of billions of dollars keeping sick people alive, those hundreds of billions of dollars would do something else. It might be bad for Drug companies, but great for companies that don't sell drugs.
Cthulhu
Tentacle Rapist
Fri Apr 13 15:52:02
Sounds like the quote in the report is saying long term treatment also shrinks the market so any idea that this is preferable to one shot treatments is not well founded. '

Not really. They used the example of the Hep C cure. It's not a long term treatment. Before they came up with it, people needed to be treated for the duration of their lives after being infected. Now they get a treatment over a year or 2 that cures it.
patom
Member
Sat Apr 14 06:50:07
Sounds like the business plan for Methadone Treatment centers.
Nimatzo
iChihuaha
Sat Apr 14 06:59:49
"Is curing patients a sustainable business model?"

And example of a question that is coherent and grammatically correct, even rational, yet deserves no answer.
Seb
Member
Sat Apr 14 07:51:23
Cthulhu:

Even so, the reports conclusions are not "don't develop cures". The implication of the answer given these recommendations is "yes".

The other insight here is that if you have an established treatment for a chronic condition, someone with IP for a cure will come along and steal your lunch anyway as a cure has superior value. They can charge up to the discounted net present value for chronic treatment if pricing based on value (I.e. as much as you will get for a lifetime treatment). Sure you can slash prices but as patients realise benefit up front, and your returns are discounted over a lifetime, the cure is going to win.


and its quite possible their margins will be fatter as after 20 years most drugs will be competing with generics anyway.

State run health systems and insurers will take the long view and buy the cure.

So the sensible thing to do is develop cures and invest in innovation. Hence the mergers.

The real problem is investment in cures for niche diseases.





swordtail
Anarchist Prime
Sat Apr 14 08:10:38
new and improved diseases will solve the problem
Seb
Member
Sat Apr 14 08:41:28
Recreational and performance enhancing drugs, health additatives.

But we are a long way from running out of health conditions to treat.
Rugian
Member
Sat Apr 14 09:06:48
The report didn't say "curing diseases causes a loss in revenues, so you shouldn't do it," it said "curing diseases causes a loss in revenues, so here are some ways to mitigate the losses." I don't see the big deal.
swordtail
Anarchist Prime
Tue Apr 17 13:36:54
http://med...illing-for-profit-41f2812b8704
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