Goldman Sachs and the Optics of Drug Discovery

Goldman Sachs analyst Salveen Richter, channeling the obvious in a note to clients (excerpted by CNBC):

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.

Ew, go on (emphasis mine):

GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients. In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines … Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise.

Yes, franchise. Long term profits depend on the riskiness of a cure.

I’m not going to begrudge a private company their desire to make money. The possibility of windfall profits are the main reason why private companies are willing to invest in uncertain and risky biomedical research. That said, when the long tail of a too-good cure only makes tens of billions in profit, it should be hard for even a staunch capitalist to be sad.

This attitude is part of what drives fringe antivaxxers and other patients away from evil “big pharma” and the medical doctors who understand the actual practice of medicine and into the arms of pseudoscience. For my part, I don’t think any company should feel bad if they develop an HIV vaccine so effective it eradicates the disease and relieves the suffering of millions, even if it eventually results in downstream profit loss due to the loss of the chronic antiviral therapy market.

We badly need and will always need public and government research support—for many reasons—but one is because the optics of the patient as a customer mindset are so toxic.

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