This realization goes beyond medicine, and is key to understanding why we live in an 'economy' that produces masses of landfill junk while our technology and manufacturing processes keep on improving.
It's ok if healthcare losses money, in fact it should be ok for all public sevices to operate and not being profitable.
The trick is to still find ways to apply pressure so that a service gets better and more efficient in time, instead of attracting parasites that'll use it as money drain. Like a lot of healthcare-related businesses seem to do (heard plenty of horror stories from someone I know who's studying medicine and interned at hospitals, and we're talking about a country with public healthcare).
In public services, where making a loss is o.k. this is just included in the loss, and there is essentially nothing that encourages the 'parasite' to not drain the system.
Not if they sell before the shit hits the fan.
A huge part of the problem is the public reaction to how for-profit research is supposed to work.
In theory a cure is highly valuable. People should be willing to pay as much for it as the alternative, meaning as much as it would cost for multiple years of ongoing treatment, plus the value of the inconvenience the cure avoids in participating in the ongoing treatment for all those years. A cure should be more profitable than a treatment because patients prefer it to continuous treatment and are therefore willing to pay more for it.
But a treatment that costs $500/week and continues for 40 years is business as usual. Someone offering a cure with a one-time price in excess of a million dollars is derided as a soulless profiteer taking advantage of the sick, insurers refuse to cover it and everyone starts calling for Congress to pass a law against it.
So the market develops treatments instead of cures.
Just because there exists a multi-million dollar over a lifetime treatment regime doesn't mean that it is okay to suddenly "own" an equivalent chunk of cash from everyone cured.
We invent treatments because we CAN'T find a cure. The treatment represents society's best effort to alleviate suffering.
We solve problems so that we don't have to suffer them as a society/species anymore.
Businesses exist until we figure out a way to live without them. Profit should never be the end all justification for doing something.
The chunk of cash is the only reason the company is doing the research to begin with.
If finding a cure was easy then it would have been found a thousand years ago -- as some of them were. The ones remaining are hard and require a lot of resources to solve. If you want someone to put that kind of money in against a high probability of failure, they have to be able to expect an even larger amount of money to come back to them if they succeed or they won't do it.
The alternative is government funding, but then you're spending pretty much the same money. The taxpayer now has to pay the tab for all the high risk/reward research that didn't pan out. And then you're subject to all the usual government issues with bureaucracy and cronyism and principal-agent problems because you've put a thick layer of abstraction between the researchers and the patient outcomes.
As far as I know the most productive research places like xerox-parc was pretty open ended. There was not clear profit driven goals.
We also see massive success with open source projects which suggests to me that there are other ways of organizing this research which we have done very little to explore.
Not strange since there is a mssive profit incentive by industry to lobby us against ever trying alternatives.
That's a nice little scam they put together a while back. If the government funds the research then it shouldn't be patented -- the taxpayer already paid for it, they shouldn't have to pay for it a second time.
But the industry has better lobbyists than the public, so they get the taxpayer to fund the research, then wait to see if it pans out, then buy it for pennies on the dollar after they already have some evidence that it works. If it doesn't work, the taxpayer foots the bill and gets nothing. If it does work, the taxpayers have to pay even more money to use the fruits of the research they already paid for.
It's corruption plain and simple.
> We also see massive success with open source projects which suggests to me that there are other ways of organizing this research which we have done very little to explore.
Open source works, but it's mostly non-governmental.
The thing that worked really well historically was small research trials conducted by individual doctors as part of their practice and then replicated at larger scale if they panned out. That's all but impossible with the current FDA rules, somewhat for good reason (some of those experiments had a tangential relationship with ethics). But the current rules are just crushingly bureaucratic.
Maybe. But maybe there's also something wrong with expecting that much. Somehow Sidney Farber didn't decide that he was going to charge the families of kids with ALL the actuarial value of the remainder of their lives.
It can be frustrating to see the public, out of ignorance, grossly misjudge the relative contributions to health of, say, a vaccine developer relative to a self-promoting surgeon. But there is something new and rather strange with this way of seeing medicine as a "capture the value"-type enterprise.
The problem is this. Suppose the total value of a cure is two billion dollars but it takes a billion to do the research. You can say they should get, say, 1.2 billion instead of the entire two, but that isn't actually that much different, and if you make it 0.8 billion then the research doesn't happen. And it's really hard to calibrate that sort of thing -- you can't just look at the amount the research actually cost because that doesn't take into account the risk of failure, which you have to compensate for or you won't get the investment.
Which is also where the apparent inequity comes from, when a million dollars in research produces a billion dollars in profit. But that's usually because it was a thousand to one shot to begin with. If it wasn't, why has it taken this long for someone to take ownership of that huge pile of risk-free money, instead of the cure being discovered 30 years ago and already being out of patent?
Maybe because no one thought of it before?
The picture you're painting is fine if you're evaluating a handful of candidate molecules each with, you'd guess, a 5% chance of having the right PK profile or something.
But for major breakthroughs, there are "unknown unknowns" that make it impossible to estimate that likelihood. It's nice to think that, if you let the full value be captured, it would incentivize more people to pursue one-in-a-million "lottery ticket" cures, but it just doesn't work that way. They're not lottery tickets if they have incalculable odds.
For the most part, the difference between management and cures is in this latter category. I.e. we don't have a cure because we just don't know how to do it, not because we were too cheap to invest in the biochemical trench warfare to find the right molecule.
The odds aren't incalculable. They might have wide error margins, but that's hardly the same thing.
> we don't have a cure because we just don't know how to do it, not because we were too cheap to invest in the biochemical trench warfare to find the right molecule.
You're thinking about this at the wrong level of abstraction. It isn't a matter of having some candidate molecules and we just need some monkeys on typewriters or a huge bank of supercomputers to test them all.
It's that if you want a cure for cancer, you have to pay scientists to look for it. Not knowing where to look is not the same as not knowing how to look. The fact that it's hard is the reason it's expensive.
We do that. It's a two-tier system where the public pays for the science and the companies fish ideas from the science to make into medicines.
>The fact that it's hard is the reason it's expensive.
No, the reason it is expensive is because we've signalled that we are willing to pay large amounts of money, essentially regardless of the actual benefit extended by the state of the art treatment. Even if the state of the science doesn't have much to offer in the way of a cure, you can count on the private sector to make drugs that push the envelope of what we are willing to pay.
But because the job that the private sector does is not the "rate limiting step" as it were, dumping more cash on them is just wasted money.
Not the cost of medicine, the cost of medical research. If finding a cure for cancer wasn't expensive then either we've been doing something very wrong or we should have found it already.
And if it's expensive then the reward has to meet the expense in order to get someone to do it.
In fact I think this is the sad truth behind a lot of privatisation stories in the West... various government running out of cash but rather than admit poverty put on the rich mouth and claim its “better”
It gets worse if you look to the UK where a of lot public services are handed to companies, for example the merger of all social benefits Universal Credit is run by companies and in a manner that can only be called unprofessional and anti-social.
The idea sounds great on paper - there are a lot of different benefits, why not reduce duplication by merging them into one scheme then only asking for personal information once - but it ignores cashflow. People can be left without money to live on for weeks. It's also a classic "big bang" project which just piles the requirements of existing systems together, and hands them to one of the traditional government crony contractors: Accenture, HP and IBM. At least it didn't involve Serco.
(those are all real cases you can find in UK newspapers, mostly the Guardian)
You can certainly keep a 'competitive' environment which is regulated with incentives. And I do agree healthcare needs this, and shouldn't live purely by the free market.
This is the model many rich country healthcare runs on, and provides measurably better outcomes for less expenditure than the US.
I think that worrying about removing the profit motive entirely misses that fact that not only is the profit motive not the only motive for doing things, but oftentimes not even the determinate factor.
The more likely explanation for Castro seeking treatment in Spain is that Cuba is a relatively small country of only 11 million, and it should be expected that they're not at the very forefront of the world on every area of medical expertise.
However, in a single payer or similar systems, if a drug company decides to hike the price, the state (or institution) can swallow the cost and continue medical services to citizens until the situation is resolved (either by legislation or court cases). Since the state (or institution) is not a for-profit it doesn't matter as much if they sink a lot of cost as long as everyone can get their medical treatment.
IIRC, the research typically comes from state-funded academics, and the development comes from the manufacturers.
And big pharma companies don't do early stage research. Small companies do. Most of those are in US
I am completely on the side of having government agencies developing cures and licensing out to companies then. This would avoid the perverse incentive of the OP. It also would stop the pervasive argument that patents are necessary to get new pharmaceuticals developed (I don't believe in patents benefit to society).
I would say in some cases that is a good thing.
Private R&D is around 60% - however a large part of that is making minor changes to existing molecules in order to obtain fresh patents.The bigger, riskier research is done by the NIH and other publicly funded bodies. See
Also - the quality of privately funded research is much worse, with non-reporting of negative results, data dredging and other dodgy activities being routine - see
Goldacre's book (he also has a blog) is well worth reading - describing _many_ ways in which drug companies can cheat.
Novartis? AstraZenica? Gsk? Bayer? Siemens? Hitachi? Philips? Olympus?
this works quite very much the other way as well..
well I'm living in Germany and I agree with that it is cheaper, but "better outcomes"? I do not think so.
I mean in Germany treating Diabetes means taking Insulin for a life long. However newer studies, actually found out that a treatment where the patient should be dieting and starts to do more sport can actually reduce the needed insulin dose or patients can even completely dismiss insulin or are cured from it completely in rare cases.
(not a lot of doctors would actually help the patient or even tell them that this would be beneficial to them, hell not even the public health care sector cares)
However the thing is if you can sell Insulin for a life long to somebody who will probably die earlier you make a profit. On multiple fronts. Treating it means that once the person is cured, he will probably live longer, will have less problems and will probably cost the overall system less (but that's not something that should happen).
So basically in "richer" countries the system is equal to the US, it's just more hidden. care system and government are systems that benefit from each other if patients take treatments over a long time and probably have a reduced life-time. i.e. treatment > healing, at least from a business perspective.
That being said, the only source I can find for your claim is a throwaway sentence in an op-ed on Forbes (https://www.forbes.com/sites/paulroderickgregory/2012/07/01/...).
I found some more realistic (and sourced) statistics here: http://blogs.sciencemag.org/pipeline/archives/2010/11/09/whe...
That has the U.S. at 47% of drugs developed. Keep in mind those are based on drugs approved by the FDA, so it skews towards the U.S., and especially away from countries like Japan. Adjusted for population (I'm not entirely sure this is fair), that puts us neck-and-neck with the U.K., behind Israel, and far behind Switzerland.
The US has the best outcomes in the world if you have money. Which is why rich people from all over the world come here for treatment. We just have lower average outcomes because of access disparities.
The US has average healthcare when money is no object. The weathty often seak treatment outside the US and occasionally wealthy people come to the US on a case by case basis.
The core problem is treatments entail risk, so doing more eventually results in worse outcomes. Further the incentives are around doing more, putting the healthcare system in opposition to heathy patients.
That's why universal healthcare is the better solution for everyone.
Schools are not for-profit institutions (well, not everywhere). Police don't make a profit. Nor does the fire brigade. Or the military, for that matter.
Are all of these disasters waiting to happen?
As further examples of state level institutions we could also look at coast guard and customs service. And, of course, the tax officials (what ever their local name happens to be in various countries).
A modern nation state is full of public institutions with dedicated personnel to carry the institutions mission.
Public institutions work just fine around the world in various countries, performing a multitude of missions. That's not to say they are immune to various pathologies, but that applies to all organizations, public, private, for-profit or non-profit. Public institutions work fine when they are fulfilling a legally defined obligation under a democratically chosen government.
The thing everyone wants to avoid is pathological cronyism. The key to this is to make sure the political power pool has churn - so there is no predictable kingpin with executive power around whom the power and corruption accumulates. Which, democratically chosen governments provide (with varying capacity, but even two parties is probably enough).
I agree, no one wants to funnel tax payer money just to amass state power. But some things that improve life really cannot in any obvious way be guided by profit mechanism, and some things are just too capital intensive to be able to do on a small scale. The obvious place to look for capital for large scale projects that add value to the general public is the state.
Note: although monarchs do exist as mostly figure heads, modern monarch seldom have executive power. Compare this to some countries with dictators or monarch with actual executive power.
Let's make it a bit more ridiculous and extreme. Would it be a good idea to privatize US nukes? What would profit incentive provide there?
Remember, we are discussing the claim "creating public institutions without a profit incentive is a disaster waiting to happen".
 My understanding is that they are more expensive than uniformed soldiers.
> You can certainly keep a 'competitive' environment which is regulated with incentives.
This is my preferred approach as well. It's worst weakness is the potential for regulatory capture. I tend to believe that should be addressed by not giving corporations as much power as they currently enjoy in the US: enforcing constraints on participation in politics and requiring transparency, disconnecting health insurance from employment status, enabling clawback of executive bonuses, etc.
This in my opinion is a false dichotomy. The government can be owned/operated by coorporations or by the people or can be an entity in itself.
What I feel is missed by people leaning towards the idea of competition is that it is not a sustainable model under the current framework of ideas. If you optimise a society purely based on profitability, competition is the enemy, since it hinders individual businesses from maximising their profits. Hence the massive business consolidation we have seen in the last decade across the globe.
If you want competition because you want different ideas to be tested, then we need to explain what we want entities to compete for. Focusing on optimising one variable only, i.e. profit, will not work. We need new ideas.
We seem to have no problem with throwing $700 billion per year on the military and nobody is pressuring them to make a profit. Is that a disaster? No? "But that's different!" It's only "different" because that's what we've been led to believe.
We give the government the leeway we do, because it is the best way to provide for the common defense of the nation. NOT because ONLY the State should have violence open to it as an option.
Anyway... Back to healthcare... The type of structure that made the military industrial complex problematic was specifically that the industrial part was doing everything they could via lobbying/bribery to maximize profit. A shift to a model where we attempt to minimize waste, and maximize effective treatment/cures turns the quality equation on it's head. You still run into the issue where riskier grants that 'may work' are going to have a harder case to make in order to be issued, but I think that once one gets away from trying to build industrial supply chains predominantly for treatments that don't result in cure, you would start to see materials and expertise to get industrial supply chains built period may become more easily accessible if not perhaps become much cheaper.
The 2nd Amendment is completely compatible with the philosophical concept of monopoly on legitimate violence as articulated by Weber.
I think that the whole point of 2nd Amendment to US Constitution was to prevent government monopoly on violence. The possibility of citizens making successful military rebellion against the state was supposed to keep the government in check.
A monopoly on violence in what context? The planet? That doesn't seem to be necessary for most countries. Within the country itself? That's the job of local law enforcement.
All the critiques on this thread about competing authorities such as local law enforcement, the second amendment, and so on, none of them invalidate the idea of legitimate use of force defining the state. Weber accounts for all those points.
The closest thing we have to an actual marketplace among authorities wielding violence is the competition between jurisdictions (one municipal police department against the one the next town over, the state police in one US state vs another US state) -- but that's not the same as a commercial marketplace.
The only critique I think is relevant is the idea of mercenaries, a.k.a. private military contractors. But there again, those mercenaries are part of the military-industrial complex, which is an extremely stunted marketplace as it's largely a government monopsony.
We don't use economic competition to determine who holds authority on the legitimate use of violence. As a consequence, we don't get the full benefit of marketplace competition in maximizing the efficiency of our armed forces -- but we also don't have perpetual civil war.
That is not the case in the USA, where the absence of such a monopoly is written into the federal constitution.
I don't think you know what the "[state] monopoly on violence" means. It does not mean all people authorized to use force are directly on the government payroll.
To expect results or effects is not the same as making profits.
We talk about AI optimized to create paper clips accidentally running amok and turning the world into paper clips. Why isn't profit a similar problem? Government agencies are just AI running on meat. Give them success parameters different than raw profits.
Honestly, why can't we see this as just a variant of the instrumental convergence problem?
Aren't most public institutions non-profits? Don't many of these work well? What makes you think that a (truly) democratically run enterprise wouldn't satisfy the needs of its constituents?
Political hobbling and fuckery related to post office operations done to marginalize otherwise exemplary performance aside, the model has merit.
I think patents make any kind of free market approach difficult if not impossible, but it's not as if there's no monetary incentive to invent the 'best' cure.
The big companies will always be the most greedy one's but most companies may still have slightly different priorities. Companies that survive must be long term economically sustainable. Consequentially most companies that exist will likely prioritize economic sustainability because those are the one's that survive.
However, it might still be that it makes sense to start and work with temporary companies that are not long term sustainable if they do fix a problem?
We all benefit from the higher availability of liquid dollars present in the majority of spenders. Demand backed by liquid dollars is a resource. Demand not backed is a cost.
It's cheaper to live overall. People can take risks, etc...
It's worth noting the Post Office does not operate on tax dollars. It's self funded, and could serve as a model for non profit public services. There are political reasons why the Post presents financial difficulty right now. They aren't rooted in any realities, just agendas seeking to marginalize it to favor for profit works.
Normally, the Post does turn some profit, which can go into the general budget. That didn't really effect the overall benefit and value to people.
This suggests we could do public works, non profit in the sense of some one or entity accumulating money somewhere, to pay down other debt, and do so in an equitable, low impact way.
Public works can be broken down into two types:
Infrastructure. These works provide new opportunity for everyone to benefit economically. The Interstate Highway Project, for example, returned many times it's initial investment. As a nation, those greater efficiencies allow us to compete better. All good, except when tolling them is discussed. That idea turns a clear benefit into a cost, and it hurts our ability to compete.
The other type is services. This is the Post Office model.
I often wonder how health care, basic banking, might be improved and actually pay us all nationally using the Post Office model.
But yes, I still think healthcare needs to be out of the market, ultimately.
The pharma industry should be working hard on planning its own obsolescence.
The same dynamic is at work in the food industry, which is responsible for the obesity epidemics.
Capitalism as it is practiced right now has catastrophic flaws. We need to change the rules of the game, yes, and not necessarily seek profit and growth at all costs.
In an ideal word. But as you show in your mismatch "serving shareholder value" is prohibitive to this. So having then as (blue chip) for profit bizes is making sure they will NOT ever be planning they own obsolescence.
> The same dynamic is at work in the food industry, which is responsible for the obesity epidemics.
...and high amount of pesticide residues, and destruction of the ecosystems, and heavy pollution on surface waters, and extreme disdain for animal wellbeing, and... (cries)
> Capitalism as it is practiced right now has catastrophic flaws. We need to change the rules of the game, yes, and not necessarily seek profit and growth at all costs.
To my understanding it should never be the economic model
"to govern all markets", but AN economic model allowed in some markets while carefully bounded by rules and ensuring (1) best outcomes for we the people and (2) a leveled playing field.
The earth is like an apple pie
Let's eat it and let's die
Do you want some more? It's delicious...
Grow the economy!
It may be nice in theory to have government manage drug R&D, but it is not practical. It's simply too expensive
"It's not practical of the US to maintain the most expensive military in the world, it's simply too expensive" said nobody in Congress ever.
Ike then counseled American citizens to be vigilant in monitoring the military-industrial complex.
And less than the projected increase in the deficit this year due to tax cuts and spending increases
Ability to pay and willingness to pay are very different concepts
All your argument was that it's too expensive. Clearly it's not. If the manner in which the money is spent (or the feelings we'll have while sending it) is actually the limiting factor, you'll need to actually make that argument.
I dont know enough to have an educated opinion on healthcare regulation or on social services...but its disengenuous to claim that medicine cant be managed as a business when its already so heavily regulated that it barely looks like a normal business.
I would agree that the current model is super messed up...but maybe managing it like a business without all the government intervention and IP laws is the better solution here... maybe not...i dont know...but you definitely cant support your conclusion from the current environment.
No, we don't all agree with this. In a well-regulated and competitive market, businesses can opine about their fantasy product and scheme about how to extract maximum revenue from their customers all day, but if they push the envelope too far, a competitor will emerge and undercut them or offer a better product.
The issue is that the pharmaceutical industry isn't regulated in a manner that promotes competition. It's a heavily concentrated industry dominated by just a few multinational companies, most of which originated in the United States.
Like a growing number of industries in the US and elsewhere it is regulated in a manner which preserves the dominance of a few powerful firms and creates barriers to entry for competitors.
The behavior of these firms naturally shifts toward milking their customers as hard as they can because governments have granted them big moats. They pay the politicians, the politicians protect them, and we get another example of late stage capitalism, which isn't really capitalism at all.
Many Americans seem to harbor a curious cognitive dissonance: they don't trust their government, but they believe that more regulation of these already heavily regulated industries, devised by the government they mistrust, will fix the problem.
Yes, managing healthcare 'like a business' with an emphasis of profit over results produces bad outcomes for patients.
But managing healthcare 'unlike a business' with no emphasis on results also produces bad outcomes for patients.
Managing healthcare for the benefit of healthcare workers also produces bad outcomes for patients.
Healthcare should be managed in terms of producing results. Metrics would be a good discussion, eg "good quality of life hours added to life" "hours in acute pain reduced" or similar.
Point is, we need something to measure, the primary measurement shouldn't be profit.
Canadian here :). By that list, our per-capita healthcare costs are about half of what our neighbours to the south pay. I don't have it handy, but I've worked out the currency conversions and things before with various tax estimators, and in my province (Saskatchewan), we pay approximately the same overall income tax (Provincial + Federal) as someone making an equivalent salary in California (State + Federal). But included in that is all of our health care and some pharmaceutical coverage.
My own person experience was that taxes were much lower in the US than Canada.
I also didn't include the monthly health insurance premiums, nor did I include the mandatory 3-week vacation pay, nor the 35-week maternity/paternity leave, etc etc. Nor tuition costs. I'd really love to see the numbers all across the board as a general "cost of living comparison" for sure.
https://www.linkedin.com/pulse/20141010125950-31061941-what-... We do have a 401k-like system that has some neat perks:
- your contribution limit carries over, so if you have a tight year, you can contribute a bunch over the following couple of years
- you can temporarily withdraw from it tax-free to buy a house (it has to be replaced within 10 years or you'll owe income tax on it)
At best in medicine you have a well understood disease mechanism (sometimes you don't even have that), where all the biological culprits are known and easily handled in an experimental context (that's rather rare at the outset of a medical project). Then you try to influence those players, but the process of finding those drugs looks a lot more like throwing darts at a board in the dark than it does like a coherent engineering task.
When you aim for the bullseye cure you often fall short and end up with a maintenance med. If you don't initially shoot for something that's likely to massively affect the disease's course, you're likely to miss the board entirely.
And all this assumes that the disease itself CAN be cured, which is not at all guaranteed. Biology is a wily beast, with insane, complicatedly interacting systems. In many ways, it's amazing we have as many cures as we do.
In other words, when finding drugs you don't really have a choice between cure/chronic use/total failure.
Of course you do need to take a safety course and be aware of the dangers, but at least people acknowledge their danger. Cars somehow get a collective free pass despite their astronomical death tally.
One doesn't need to be Sherlock Holmes to figure out that that's just like the narcotics business.
In a private healthcare system the insurers are also incentivized to pay for as few treatments as possible, hospitals are incentivized to make patients pay as much as possible for all the tests or unnecessary surgeries they make them have, and Big Pharma, as you said, is incentivized to make drugs that don't actually cure people and to price the drugs based on "value provided to the citizen". So if it's something like cancer, the value is a lot, even if the drug costs little to make.
Do you have examples of situations where cures have been suppressed in favor of expensive long-term treatments? Especially in a competitive environment, where there were multiple players offering competing long-term treatments that were both aware of cures?
Preferably this would be something supported by leaked or court documents, but independent investigations would also be interesting. I understand this is a high burden of proof, but everything I've seen seems to indicate that this is an urban myth. I certainly couldn't find any specific cases in a cursory search.
All else equal, people should be willing to pay a bit more (in terms of lifetime cost) for a cure than a treatment (certainty, finality premium). If that is the case, then cures are always at least equally worth developing. If that's not the case however, then yes we do indeed run into a bad local minima.
This certainly isn't true in social games. If anything it's the opposite - players will commonly pay more in subscription fees than they would for a total one time unlock of everything, since the immediate short term payment is less.
But to have patients need to take it in steadily increasing doses for life? Yes, that would describe most maintenance medications out there. And encourage patients to have the illusion that “oh, there’s a pill for that” as one of the factors.
While I was a pharmacist at a long term care pharmacy, it was not unusual to see patients on more than 20 meds. Some of the meds are to be taken more than once daily. “Pill burden” is the term we use to describe this.
What I’ve observed is there is a point of no return in any chronic condition where you can’t diet and exercise your way out of it and you’re relegated to higher and higher doses of diabetic or hypertensive meds. For life.
I guess it was really just a reinvention of what the fashion industry had been doing for a long time. Get people to throw away perfectly good clothes and biluy new ones because it no longer matched fashion.
We really ought to rethink this madness. Companies are already able to make really durable products but there is no economic incentive to do so.
How can we change the incentives?
I am not sure if that is possible in a regular free market economy, as one kind depend on sort of perpetual growth
We don't live in that world so what you describe doesn't actually happen.
We have more cures being developed now than ever before and it's very lucrative for the companies doing it.
And yes, the companies are giving a monopoly on one drug which allows competitors to create others similar to it. And the patent only gives about a decade of monopoly, after which the price drops to ~10% of what it was.
Alcohol? Coffee? Sugar?
This is the crux of the problem. The current system optimizes for things that are not improving people's lives. It optimizes for waste, unsustainable consumption of resources, wasteful competition rather than cooperation, self-prepetuating inequalities at small and large scale, hyper-optimized psychological manipulation (i.e. advertising) for raw amount of useless shit being sold, etc.
We didn't reach the pinnacle of perfection in systems of wealth distribution with 18th century capitalism. We can do better. We can do a lot better.
There is another one. Vaccines. Or any preventive medicines that does not actually require people to be sick.
You just need to inject massive amount of fear of diseases (Statistics is your friend here) into the populace to create a nice, ever increasing demand of your produce...
People that think they know better, however, have lost this fear and are responsible of the failure to establish herd immunity, and of the occasional deaths of immunodepressed or just unlucky people due to preventable diseases.
I only said that demand for any preventive measures against X, can be artificially inflated by injecting fear of X into the populace.
Since vaccines are a preventive measure, this is applicable to vaccines as well.
Vaccines are absolute shit from a business perspective. They're expensive to develop, generally cheap to produce, and their administration is a single or limited event point. Sure you've got breadth but you've got no depth, once an individual is vaccinated they're done, or maybe they'll need an other round years from now.
Big pharma companies absolutely hate vaccines, having people pay for repeated treatment is way more business-beneficial.
And as other commenters have noted, herd immunity is a well-studied concept, and vaccines have very much proved their worth multiple times over.
What about flu vaccines? Even govt runs ads urging people to get their flu shots, even though they have been shown to be useless.
Flu is a variable pathogen, which means that it evolves to look different from an immune perspective over time. It follows clustered patterns, where the flu strain will look pretty similar (and vaccines will be more effective), then it "jumps" to a new cluster every few years or so (and the vaccines will likely be less effective). There's a whole bunch of work goes into predicting what flu strains make most sense to use for the vaccine in a given flu season.
curious, Do you have a link to this by any chance?
According to this
After looking at "328 households with 1441 members, including 839 children," for an entire year (2011) these authors determined that there was a difference of 4/10ths of one percentage point between those who received flu vaccine and those who didn't.
The infection risk was 8.5% in the vaccinated and 8.9% in the unvaccinated.
According to this CDC study
"We observed decreasing vaccine effectiveness with increasing time. Maximum vaccine effectiveness was observed shortly after vaccination, followed by a decline..... Vaccine effectiveness remained greater than zero for at least six months for influenza A(H1N1) and influenza B and at least five months for influenza A(H3N2) viruses."
They say "greater than zero" , far cry from 40- 60% :D
Cannot post more replies atm, but for people saying 5% is still something.
> Going from 8.9% to 8.5% is a 5% reduction in flu cases. If this translates to 5% fewer sick days during the flu-period and a 5% reduction in doctor visits that are due to flu symptoms (some people go to the doctor for everything), that can absolutely be a reason for the government to want people to get their flu shots.
This line of reasoning assumes that there are only positive effects from vaccines. There are many many side effects of flu vaccines.
Just to quote one,
"Hospitalizations were slightly more common among subjects who were vaccinated than among the others"
"hospitalizations for pneumonia and influenza, that were 47% more likely among subjects who received the tetravalent vaccine as compared with those who were not vaccinated."
CDC makes no such distinctions in USA.
Any references to your claims?
Though I should have written "isn't _equally_ useful to everyone in the general population".
> > Going from 8.9% to 8.5% is a 5% reduction in flu cases. If this translates to 5% fewer sick days during the flu-period and a 5% reduction in doctor visits that are due to flu symptoms (some people go to the doctor for everything), that can absolutely be a reason for the government to want people to get their flu shots.
> This line of reasoning assumes that there are only positive effects from vaccines. There are many many side effects of flu vaccines.
This is why I also said:
>So assuming that the flu vaccine is harmless and the cost is not too great, it can make sense to get it even if the effectiveness rate is low.
It's really interesting stuff. Take a look at https://www.whocc.infectiousdisease.cam.ac.uk/antigenic-cart... for a bit of an overview on that stuff.
Where my numbers disagree with the above (nearly all!) I stand corrected.
Personally I have never had a flu shot and am not inclined to start doing so, but I know people who have and according to them, if they do get the flu it affects them less in the years they get their shots vs. when they don't.
So assuming that the flu vaccine is harmless and the cost is not too great, it can make sense to get it even if the effectiveness rate is low.
Even at their worst the flu vaccine makes the flu less deadly when you get it.
Most people will shake off a flu infection easily. The elderly or people with other medical problem may not, so I find it a weak argument to say they are useless based on that study.
The second study quoted is pretty much what I would expect based on my knowledge of influenza virus. It evolves quickly, which is why being exposed to it once year doesn't build up your immunity to the evolved strain going around a year later
To say they are useless is just wrong.
Profit from any normal drug is dependent on chance that a certain number of people will fall sick of the corresponding disease. The company cannot also count on outbreaks since it will have no clue when, where and for which disease the outbreak will occur. The expire date for drugs means that the companies will not be able to stockpile these drugs in hopes that there will be an outbreak some point in future..
Unpreventable diseases are quite capable of creating their own fear, like the AIDS epidemic.
I get vaccines for serious diseases when visiting foreign countries. Yellow fever, hepatitis, tetanus amongst others. So far I have manged to avoid becoming autistic.
I am in good health so have no real reason to get a flu shot. (One year my work offered me one and I took it).
> I am in good health so have no real reason to get a flu shot.
Aren't you saying the exact same thing that you called "antivaccer".
CDC doesn't recommed flu to people who are not * in good health* , its a population wide recommendation. You being in good health is not relevant to GP's point of recommending vaccines to people who are not sick( which you seem to agree with).
So as long as this strong differential and potential for profit exists, drug companies feel competitive pressure to produce better treatments, irrespective of the fact that "milking" the pathology would yield them trillions collectively. It's effectively a "tragedy of the commons" of sorts: a single company trying to capture more of the market ruins profits for everybody else by finding a cure; behold, the magic of the free market.
They can only escape it by entering non-compete agreements and collectively agreeing not to inovate, a substantial claim that requires substantial evidence.
Goldman is rightly pointing out that gene therapy cures require heavy research but don't provide long term revenue streams.
It doesn't claim that they shouldn't be pursued, or that people should be kept sick. It doesn't even say gene therapy companies offering cures are bad investments! Rather, it points out that they offer high returns over limited durations, and will have to constantly hunt new treatments and target popular diseases. All of which, I note, describes Gilead perfectly.
I think you and Goldman are both right, while the headline writer is misunderstanding the actual memo.
Here is an excellent book that describes this relationship in far greater detail:
Despite all the outrage over this memo, all I can really think is "yes, what a great argument for state-sponsored medical R&D." Questioning the profitability of a market doesn't determine the profitability of that market, and if something socially-valuable turns out not to be market-friendly, that's an obvious case for state intervention.
(If someone made me Emperor, I'd probably pick a deregulated, free-market approach but increase state research spending by an order of magnitude.)
So if you went purely for profit, you could only develop a cure if:
- you could price it higher than the price of the chronic therapy over the full lifetime of a patient.
- you could sell it to more patients than you could have sold the chronic treatment. A lot more, because every patient will only buy the cure once.
So even then the incentives would probably lead do driving the price of drugs up significantly. You'd also still have no incentive to actually eradicate a disease.
- you control only a fraction of the ongoing-treatment market, and the windfall you could get as a monopolist in the short-lived cure market is worth losing out on that steady cash flow
Any successful drug with half a business case will be launched - no company can afford to be picky about cure vs. chronic treatment - there just aren't that many successful drug discoveries to enable it.
No it doesn't. Why? Because there are multiple companies.
If company X is making $10B per year on a poor treatment, there is still an incentive for another company to create a cure, even if it only makes them $1B.
While I'm at it. Also overused (not as an explanation) but just as an expression is, "onboarding".
Also, "Dunning-Kruger effect"
Sorry for veering off-topic but I was triggered.
I imagine a HN Bingo app game where each player is randomly assigned HN-y phrases and expressions from a fixed database at the start of the day. As the day progresses the app monitors comments of posts on the front page for matches. First to get a line is the winner!
Incidentally I agree with the commenter @cornholio, curing the unwell is incentive enough as there is plenty of profit to made and to live means to suffer from ill health at some point in one's life. As you were…
And it's across the board. I tell myself exactly that when I look at my toothbrush.
A toothbrush lasts about ~3 weeks before needing replacing. I'm sure someone in the industry will tell me that it's because it's made of unobtainium unicorn hair specially designed to make my teeth whiter and all that.
I also have a another plastic brush to clean my shotguns of all things (I do a lot of clay pigeon shooting) -- the construction is identical to a toothbrush, just perhaps a tad bigger. Doesn't have the fancy colored handle.
Now the brush I'm currently using I've been using for 3 years and the brush is still pretty much pristine, after being used to generously scrub bits of sharp, grim metal once or twice a week.
Hmmm... How does that work? Better unicorns? Well, think about it, everyone is changing toothbrush on a monthly basis, that is a huge revenue. Even reducing the lifetime of a toothbrush by 5% would increase the number of brushes sold by a huge amount.
All the while, it creates fantastic amount of plastic waste. Fancy packaging and 100% plastic, possibly not even all recyclable.
Is it, though? Are the bristles made of the same material, for example? I'm guessing that bristles tough enough to scrub metal would not be the best things to use on your teeth and gums.
After a period of time the toothbrush too will become a colony of bacteria. It will then add to the existing problem or at least offer no benefit. This is why you should change them so often.
The shotgun cleaner is not used to remove bacteria primarily and will not suffer the same issue provided the particles/grime can be removed from it.
Here they purposely make the brushes useless mechanically as the bristles deform to a point they are no longer usable.
It's maintenance. Not that I think it's better, but economically, you suddenly have the same goal as your clients. And that more sane.
I can't think of any scientific experiment that would conclude: burn out, eat junk and drink mostly beer.
This is just healthy living. I don’t think we should ascribe it to Traditional Chinese Medicine.
Beside, most reason to go to the doctor go away if you have a healthy life style.
Everything developed after science is suspected to be bunk until the experiment has been replicated.
Getting rid of the useless cruft lingering around from the past is just as useful as advancing the frontiers of knowledge.
When people can stop waving crystals around and dipping their fingers in oil, they can finally get better results from pushing the big green button on an inscrutably opaque black box that goes "ding".~
- when the bristles become less stiff (i.e. signs of wear)
- or every 3 months
Having said that, I do want people who solve major problems to be reasonably compensated. I'm not sure what that looks like.
Let's not forget, Goldman Sachs and its biotech brethren are businesses. All business involves long-term strategic planning, often behind closed doors, to answer the question of "what application of our existing money will make us the most money in the future?" When viewed through this lens, Goldman's statement can be polished up to "of all the biotech investment options we're weighing, investment in outright cures for infectious diseases is less profitable in the long-term because curing people has a nonlinear effect on the patient population." It's a simple statement of fact.
OP's summary, and I strongly encourage you to actually read it if you haven't, goes on to say that Goldman's research suggests long-term research and product investment would be best applied to medical conditions like cancer and aging, for which a cure for an individual doesn't result in a diminishing market.
This isn't nearly as evil-sounding as the article aims to make it sound. At worst, it highlights something we already know: market-based solutions tend to be flawed, and if we want investment in treatments for infectious diseases we need to turn to forces that are exempt from market forces (i.e. government research funding). At best, it's an indication that we can expect more investment to go into things like cancer and age-related diseases.
> In the absence of original source material, whatever interpretation you apply will inevitably be a projection of your pre-existing views on the matter.
Literally all interpretation one does about anything is a "projection" of their pre-existing views on the matter.
I'm a pretty free-market kinda guy, but all systems have flaws. Biotech and capitalism seem to have a fair few chasms between them, and this GS report illustrates one of them quite well. Capitalism is not a 'complete' theory, holes exist in it, as they do in all things. If anything, as the GP states, GS is pointing this one out. Suggestions for what to do about this 'hole in theory' are needed though; likely it's government funding (in a 'lighthouses' manner).
There are inherent challenges in monetizing healthcare. It isn't better to expect it by default to be "free" as the solution to that. But I don't think that means we can't keep our eyes on the prize. Ultimately, healthcare should primarily improve health and welfare.
I once read a witty piece that I only poorly remember that used the expression the bottom line to make the point that while a business does need to be profitable, profit should be its lowest priority. Accomplishing something useful and beneficial should be the main goal. Money is a necessity to keep the doors open, but you shouldn't actually be in the business of milking your customers for every penny, especially if that means doing other questionable things to get there.
To my mind, that should go double for healthcare.
Eh, maybe back then, but today they would be seen as worse than ISIS. Pederasty and slavery are wholly intolerable. We've taken their good ideas and run with them, leaving the vast amount of horrible ones behind.
That said, you are totally correct. The modern corporation would be anathema to people from 150 years ago. Corporations were very tightly controlled by the state for a very long time due to the potential for vast profits to warp politics (also due to antisemitism, class-ism, and racism; the usual)
Whatever else was going on in Persia and Greece, there are reasons they were considered shining beacons. I think one of those reasons was their concept of trade as a civilizing force, superior to, say, raiding your neighbors and just taking whatever you could get.
That concept of trade as a civilizing force seems somewhat lost these days and I think we are worse off for forgetting it.
I realize you are mostly agreeing with me. This would no doubt go better in person. Conversational tone is really hard to convey online.