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Aragorn
14th April 2018, 12:22
Even though this article primarily focuses on a financial-economic matter, I'm posting it here in the Medicine & Health category because it's about health and the pharmaceutical industry. I've also given this thread a title of my own choice, rather than to go with the title of the article itself. Once you've read the article, you will understand.

The sad thing about this article is that it's not really news, because the World Health Organization (https://en.wikipedia.org/wiki/World_Health_Organization) has already published a report several years ago with regard to the pharmaceutical industry's refusal to develop an actual cure for AIDS — even though they had come very close to finding one — in favor of the further development and production of AIDS inhibitors, because the inhibitors tie the patient to the pharmaceutical industry for the remainder of their life, whereas a cure is deemed less profitable for the industry. So it should come as no surprise that the banks are feeling the same way.


:shocked: :shocked: :shocked:





Source: Ars Technica (https://arstechnica.com/tech-policy/2018/04/curing-disease-not-a-sustainable-business-model-goldman-sachs-analysts-say/)




https://cdn.arstechnica.net/wp-content/uploads/2018/04/GettyImages-874995642-800x531.jpg




“Is curing patients a sustainable business model?” Goldman Sachs analysts ask




Analyst report notes that Gilead’s hep C cure will make less than $4 billion this year.


One-shot cures for diseases are not great for business—more specifically, they’re bad for longterm profits—Goldman Sachs analysts noted in an April 10 report for biotech clients, first reported by CNBC (https://www.cnbc.com/2018/04/11/goldman-asks-is-curing-patients-a-sustainable-business-model.html).

The investment banks’ report, titled “The Genome Revolution,” asks clients the touchy question: “Is curing patients a sustainable business model?” The answer may be “no,” according to follow-up information provided.

Analyst Salveen Richter and colleagues laid it out:











"

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... While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.


"










For a real-world example, they pointed to Gilead Sciences, which markets treatments for hepatitis C that have cure rates exceeding 90 percent. In 2015, the company’s hepatitis C treatment sales peaked at $12.5 billion. But as more people were cured and there were fewer infected individuals to spread the disease, sales began to languish. Goldman Sachs analysts estimate that the treatments will bring in less than $4 billion this year.

“[Gilead]’s rapid rise and fall of its hepatitis C franchise highlights one of the dynamics of an effective drug that permanently cures a disease, resulting in a gradual exhaustion of the prevalent pool of patients,” the analysts wrote. The report noted that diseases such as common cancers—where the “incident pool remains stable”—are less risky for business.

To get around the sustainability issue overall, the report suggests that biotech companies focus on diseases or conditions that seem to be becoming more common and/or are already high-incidence. It also suggests that companies be innovative and constantly expanding their portfolio of treatments. This can “offset the declining revenue trajectory of prior assets." Lastly, it hints that, as such cures come to fruition, they could open up more investment opportunities in treatments for “disease of aging.”

Ars reached out to Goldman Sachs, which confirmed the content of the report but declined to comment.


Source: Ars Technica (https://arstechnica.com/tech-policy/2018/04/curing-disease-not-a-sustainable-business-model-goldman-sachs-analysts-say/)

Emil El Zapato
14th April 2018, 14:14
Hi Aragorn,

This is a shining example of when Government subsidy is vital...Of course, this works when the government isn't flooded by big business. The American right are the enablers of all that is 'evil' in modern society. And surely the left is not blameless. Both houses of congress have for many years passed legislation that is 'good' for business and, of course, themselves. The trick for the little people is to hook into those perks where they can. I have and I know that isn't selfless either...lol, hardly.

But at least it could also be argued that the left tends to favor small business on some occasions.

Dumpster Diver
14th April 2018, 14:49
Money again at the root of evil.

Octopus Garden
14th April 2018, 21:38
Yes. Government has to quit being hand maiden to big pharma and directly compete, when it comes to curing rather than managing disease.