Medical innovations could lead to people being cured at once. Instead of long-term and consequently, expensive treatments, gene therapy, for example, could lead to a one shot cure.
For analysts of Goldman Sachs, this is a reason to ask the question: 'Is patient cure a sustainable business model? That is what the CNBC news organisation released last week.
In the report entitled The Genome Revolution, analyst Salveen Richter writes: "The ability to deliver a one shot cure is one of the most attractive aspects of gene therapy, genetically modified cell therapy and gene processing. However, the prospect of recurring income from such treatments is very different from that from long-term treatments. This opportunity is of enormous value to patients and society. But it can be a challenge for developers of gene medicines who are looking for a sustainable flow of money."
The hen with the golden eggsThe report provides an example of successful treatment for hepatitis C. The company Gilead Sciences launched a cure that cured 90 percent of patients. This resulted in rapidly diminishing profits: In 2015, 12.5 billion dollars was still earned from the drug on the American market. Goldman Sachs predicts that this will drop to USD 4 billion in 2018.
Particularly in the case of infectious diseases such as hepatitis C, successful treatment leads to fewer patients. Richter writes: "By curing existing patients, the number of carriers of the virus decreases. Infection will therefore be transmitted less frequently."
Richter points out that other types of disease are less risky profit-wise: "For diseases where the growth of new patients remains stable (e.g. cancer), the potential of successful treatment is less of a risk for the sustainability of the company."
Perverse incentivesCNBC's coverage spread rapidly through traditional and social media. Goldman Sachs' approach touches a sensitive point. The investment bank assesses a potentially revolutionary development that can be a blessing for public health, through the eyes of profit maximization.
It is a symptom of a wider problem. That is to say, that technological development is being restricted by the ramifications of market thinking. It leads to us not being able to repair our devices ourselves, a poorly secured, ramshackle Internet of Things being rolled out, and copyright law hampering scientific progress.
Place health at the heart of your businessInstead of squeezing new technological possibilities into old business models, it may be more beneficial to develop new business models. The Dutch MD Emma Bruns argues for a different revenue model for health care: Where health should be central, health care today revolves around a revenue model of illness", she says. "Health insurers, the pharmaceutical industry and even hospitals benefit from as many patients as possible. It therefore calls on the government to work on a revenue model that is aimed at making people healthy and keeping them healthy."
SubscribeTag alert: Subscribe to the tag Elektor Ethics and you will receive an e-mail as soon as a new item about it is published on our website!
Image: Goldman Sachs head Office. By: Quantumquark. CC BY-SA 3.0 licence.