First reported by CNBC, a report issued earlier this month entitled “The Genome Revolution” by Goldman Sachs, one of the world’s largest investment banks, recently posed the question to investors, “Is curing patients a sustainable business model?”.
It is remarkable that this question should even be asked out in the open like this, but it merely demonstrates what we already know, that profit always comes first, no matter the human consequences. The irony, in this case, is that an investment bank is in the news for telling the truth.
Bankers’ Lament at the Success of Cures
Authored by Salveen Richter, Goldman Sachs analyst, the report recognised the proposition of providing “one-shot cures” as one of the “most attractive” elements of gene therapy, but goes on to state that, “while this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for a sustained cash flow”.
As an example of the harm that curing people can do to your bottom line, the report referenced Gilead Sciences’ treatments for hepatitis C, which has achieved cure rates of more than 90%. As hepatitis C is a contagious disease, the more people you cure now the fewer people can you sell your treatments to in the future, or as Goldman Sachs put it:
“the success of [Gilead Science’s] hepatitis C franchise has gradually exhausted the available pool of treatable patients…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”.
To demonstrate the effects of this on the balance sheet, as a result of the treatment’s success, Gilead Sciences’ US sales declined from $12.5 billion in 2015 to a projected $4 billion in 2018. This is clear evidence that there is an inverse profit motive in the case of curing patients with infectious diseases.
Goldman’s report ends by encouraging biotech companies to focus on illnesses that are already high-incidence or have a growing number of sufferers alongside expanding their portfolio of treatments in order to “offset the declining revenue trajectory of prior assets”. Whether intentional or otherwise, the message to any investors reading the report is that you will not make as much money if you invest in cures, or similarly in treatments for infectious or rare diseases where the pool of potential sufferers is unstable. The outcome is that a sensible investment strategy is directly contrary to the outcomes desired by patients and by wider society, who would surely see the incentive as being to help those who need it.
Healthcare and Profit Don’t Mix
This isn’t the first time that the profit motive in medicine has made headlines, particularly in America.
Most people will remember the furore regarding Martin Shkreli’s jacking up of the price of lifesaving drug Daraprim (used to treat AIDS, malaria, cancer patients and those who are at an increased risk of toxoplasmosis) by 5,000% after his company, Turing Pharmaceuticals, took control of it.
The cost spiked from $13.50 per pill to $750 per pill overnight and despite the public outcry and the eventual jailing of Martin Shkreli for an unconnected offence, Vyera Pharmaceuticals (the new name for Turing Pharmaceuticals) still sells the drug for the inflated price in the US – demonstrating that once the heat from the media died down, the remaining members of the company decided that yes, profits are more important than patients.
It is worth mentioning that prior to his incarceration into the primarily for-profit prison system in America, Shkreli acknowledged during an interview with Bloomberg that the cost of production of Daraprim is close to $1 per pill.
In a similar vein, EpiPens, a life-saving medication which most readers will be familiar with as the go-to for anaphylaxis, hit the headlines in 2016 when the CEO of the pharmaceutical company, Mylan, purchased the rights and increased the price from $100 to $600 for a pack of two pens between 2009 and 2016. Mylan’s CEO, Heather Bresch (who is the daughter of the US Democratic senator for West Virginia, Joe Manchin) earned a reported $19 million dollars in 2015.
From a US perspective, each of these stories is symptomatic of a broken system which exists not to treat people but to profiteer off of their need for treatment. Studies suggest that between 18,000 and 50,000 people die every year in America simply because they cannot afford medical insurance and because successive governments refuse to legislate to provide them with an NHS-style system, despite the majority of the American public being in favour of it.
When you view this through the prism of the pharmaceutical industry’s economic stranglehold on each administration through massive political campaign contributions, it is easy to understand why: again, the incentives are all wrong. Politicians do the bidding of lobbyists in return for the cash required to be re-elected or in return for the promise of highly-paid jobs or speeches once they retire from public office, the lobbyists do the bidding of the pharmaceutical industry who pay their salaries and the general public are left metaphorically banging their heads against a brick wall.
The problem with the contents of the report is that the observations and conclusions immediately ring true. It is a truism that is it more profitable for a company to sell repeated prescriptions for years to a cancer sufferer than it would be to sell them a one-off cure.
Whilst the report demonstrates that the current system does provide an incentive for doing so, there is no current evidence that anyone is deliberately trying to avoid curing cancer, for example, but it does make clear that if your starting point is that you must make as much money as possible (the inherent starting position of any company), then selling a cure instead of repeated treatments is a fool’s errand, akin to a weekly child’s magazine giving you all of the pieces to build that impressive model train in the first edition – you aren’t going to buy any more magazines and the publisher knows it.
But, this isn’t Sunday afternoon model train building, this is life and death and more abstractly, the advancement of medical science.
Surely, in light of all of these obvious examples of the incentive problems in mixing medicine and money, we have to ask ourselves the question, if it is the case that the most logical decision for a business to take within the sphere of the current system is to deny “customers” a one-off cure in favour of prolonged treatment simply because it will increase the profits of a few rich investors, then isn’t there something fundamentally wrong with the way things are organised?
If we were to start again we would surely build an economy in which the victor in the battle between preventing suffering and increasing profits is always the former, but that is demonstrably not where we are today.
Our global system of crony capitalism and oligarchy cloaked in the myth of representative democracy continues to produce profits for the few and misery for the many, this is simply one example of how this comes to pass.
Credit goes to Redacted Tonight for bringing this story to our attention, check out their great analysis on YouTube here: https://www.youtube.com/watch?v=pFn0UqgRrx8