Why drug companies would rather treat your disease instead of cure it.

Freakonomics has a medical podcast that discusses the economics of different medical subjects.

Recently, one of their podcasts, Freakonomics M.D. Who Pays for Multimillion-Dollar Miracle Cures? covered sickle cell anemia found in the African Gene pool.  The disease is a genetic error that can be quite painful, damage organs, and reduce the lifespans of 1 out of every 365 African or African American births according to the CDC.

In the podcast, they explained that there is a cure that is awaiting FDA approval,  They interviewed one participant in the trial who experienced a total resolution of the disease using a gene modification method known as CRISPR which allows scientists to alter genes. According to the podcast, it can cost millions of dollars to cure some diseases while others are not so expensive.  Drug companies create a portfolio of diseases when deciding how to treat a rarer disease and because it takes so long for the drug to be approved and used in the patent, the investors want to be paid back and then some.

Curing or treating a chronic disease comes down to dollars and cents.

The logic behind curing vs creating a chronic disease treatment has to do with how well it will pay off as an investment. Chronic prescription models pay better than cures that happen once.  As perverse as this sounds, this has nothing to do with what is good for the public at large, but with what is good for investors such as wall street.

Ethically, curing diseases that are genetic and cancers is what they should be doing.  The incentives are better for treatments rather than cures.

The public has no idea what drugs ultimately should cost, and we are at the mercy of the companies that develop and manufacture treatments and the occasional cure.

A cure is if you buy into the drug companies’ pricing argument, often priced high not based on cost, research, or a reasonable profit. Drug companies base the cost of a cure on the supposed savings the health system would realize over the years as compared to the chronic treatment approach. It has nothing to do with the cost of manufacturing, development, trials, or anything else.

As insane as this sounds, this is why the cure for hepatitis c manufactured by Gilead was priced initially at 84 thousand dollars until competitors offered less expensive options. The price came out of thin air most likely. Wall Street on the other hand sees this as a problem since cures are final, and once a disease is cured, that is the end of your revenue.

Today, we have a drug pricing problem as many drugs made here are found for much less in other countries, but these drugs are not cures, but chronic treatments.

It’s insane that the system is geared toward profit rather than cures which would lower healthcare costs internationally.

What should a cure cost?

A few years ago, Cuba discovered a cure for a type of lung cancer at $4 dollars a dose called Cimavax which would never happen here but the cure was for the public good.  It is currently illegal here but it is a type of immunotherapy that works.

Should a cure be priced based on the fact that curing costs less than chronic treatment, or by a non-opaque business model that anyone can understand meaning development cost plus mfg cost plus profit markup?

During the podcast, a company is suggesting we should incentivize this currently insane model by amortizing the cost over many years for a cure like you would a home.  The logic is this spreads out risk.   The idea is that if we paid drug companies a per patient per month amount to develop treatments and cures, this is going to result in more cures.  The problem is we have a pricing and incentive problem and you are endorsing it with this nonsense.   Wouldnt this be a great place for private-public partnerships to be in to develop and solve problems at a reasonable cost? Cuba which is a socialist country has done just that for the public good which will help society keep healthcare costs under control.

The problem with capitalism in healthcare is that it doesn’t work.

Treatments to make problems chronic as opposed to curing them is as insane as it sounds.   Isn’t it immoral to treat when cures make more sense?

In the healthcare arena, we see many treatments designed to relieve rather than cure or resolve.    Insurers place artificial roadblocks to care and the system is breaking us by using a conveyor belt style of healthcare that frustrates many and reinforces the chronic treatment model.   Is this what we should be doing with our healthcare dollars or is personalized curative care more ethical and moral?

Drug companies look for chronic treatment profit centers rather than cures.

Many cancers are likely curable as well but less costly cures are not incentivized which is crazy.

In other countries, they grapple with these costs too.   Drug prices and the lack of cures are international problems but solving them will help all of us.

Perhaps, public private partnerships between multiple countries researching the cures is the answer. If we know that big pharmas goals are not aligned with healthcare costs and rational pricing, isn’t it time we came up with creative solutions?