What Happens When Curing Patients Is Bad for Business?


John Coughlin/CNN


Every so often, someone asks a question honest, simple, and sharp enough to cut through the noise.

On April 11, that question came from a rather unlikely source: a Goldman Sachs report for biotech companies, was obtained by CNBC, which asked, quite directly, “is curing patients a sustainable business model?”

Goldman had reason to be concerned. Since the beginning of the decade, the biopharmaceutical company Gilead Sciences has been the leading producer of hepatitis C treatments – the most notable of which, the medication sold under the brand name Sovaldi, has a cure rate of greater than 90 percent.

Sovaldi was phenomenally expensive for Americans ($1,000 per pill, $84,000 for the recommended 12-week course of treatment), but it was also phenomenally successful for Gilead: in 2015, U.S. sales for the company’s hepatitis C treatments clocked in at $12.5 billion.

Shortly thereafter, though, business began to slow. This year, Gilead’s U.S. sales are projected to be less than $4 billion – a fairly dramatic drop, especially for drugs as safe and effective as these.

But the problem isn’t with the medicines or their price points. The problem is that, thanks to the medicines, fewer people need treatment for hepatitis C.

“GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients,” a Goldman analyst wrote in the report.

“In the case of infectious diseases such as hepatitis C,” they continued, “curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines.”

Gilead’s hepatitis C treatments are too effective. They’re curing nearly every person taking them, and, thus, the company is running out of people to take them. There is only a finite amount of money to be made in curing patients with infectious diseases.

This is not good for Gilead, whose stock price has dropped by nearly a quarter since January. More importantly, it’s not good for people who have infectious and other rare diseases.

The Goldman report, which was titled “The Genome Revolution”, contained a series of suggestions for its clients on how they might be able to stay profitable – extraordinarily profitable – while saving lives.

One of those suggestions is for companies to focus on “large markets”, conditions that affect a very large number of people. But where does that leave those who are afflicted by rarer conditions and need their lives saved all the same?

Two years ago, the MIT Tech Review ran a feature on the British pharmaceutical company GlaxoSmithKline’s cure for the immune deficiency known as bubble boy disease, calling it “the first outright cure for a rare disorder to emerge from gene therapy.”

It was a tremendous breakthrough. It also cost $665,000, would have cost more if not for the negotiating work of the price-setting Italian Medicines Agency, and still had no path to financial viability for GlaxoSmithKline. There simply aren’t enough children born with the disorder.

So, two days after CNBC’s account of the Goldman report, GlaxoSmithKline sold its gene therapies to a comparatively tiny British company called Orchard Therapeutics.

The sale might be a sign of what’s to come. Gene therapies like this one, by altering a patient’s DNA, can immediately cure diseases that have claimed and diminished the quality of countless lives. They’re the future of medical care. But can they make money?

In Goldman speak: “While [‘one-shot cures’] carr[y] tremendous value for patients and society,” analyst Salveen Richter wrote, “[they] could represent a challenge for genome medicine developers looking for sustained cash flow.”

Where does big pharma see a sustained cash flow? Take the cancer industry.

In 2016, per CNBC, the world spent $107 billion on cancer treatments. By 2020, that number is projected to hit $150 billion. In the U.S., those treatments have gotten progressively more expensive even as the cancer rate has remained largely steady.

That’s not to say that there aren’t organizations working to find a cancer cure. There are, if for no other reason than that being the company that didn’t find the cancer cure is going to be pretty bad for business when one is found.

But is finding cures sustainable? Unless a company can find multiple cures for common illnesses and disorders in very quick succession, and sell them for massive amounts of money, the answer may very well be no.

The fact that the question even merits discussion highlights how dangerously incompatible a for-profit healthcare system is with the generally assumed singular goal of healthcare: helping people.

For-profit companies are motivated, at the end of the day, by profit. Our healthcare system is undergirded by the notion that we can tether profit to helping people, but, as Gilead Sciences can attest, the system is unalterably flawed.

Companies might continue to pursue gene therapy “one-off cures”, yes, but will they price them such that they won’t make any difference for people who don’t have health insurance or, say, a few hundred thousand dollars lying around.

The long view is that no, curing patients is not a sustainable business model. That much is obvious. No more patients, no more business. But the fact that those two phrases would ever be thrown so callously together, “curing patients” and “sustainable business model”, is an affront to human dignity in this country.

Government does what it can – funding research, leaning on companies like Gilead to lower prices – but its reach in our current setup is limited, and not just by Republicans who regard science itself as an enemy of the state.

There are other ways. Jonas Salk’s work on polio, for instance, was funded by the American people, more than 80 million of them, who donated to the National Foundation for Infantile Paralysis and got a vaccine that was affordable and accessible to all.

The process that led to Salk’s discovery, a discovery which was never patented, was socialized healthcare. That’s how we got vaccines for cholera, typhoid, and a number of other destructive diseases.

It is grotesque that public health should have anything to do with private profit. It shouldn’t matter whether curing patients is a sustainable business model. That it does suggests something very sinister about the capitalist heart of the American experience.

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