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"There’s more money to be made investing in drugs that will extend cancer patients’ lives by a few months than in drugs that would prevent cancer in the first p

"There’s more money to be made investing in drugs that will extend cancer patients’ lives by a few months than in drugs that would prevent cancer in the first place. That’s one of the findings from the work of Heidi Williams, an M.I.T. economics professor and recent MacArthur Foundation “genius” grant winner, who studied the problem along with Eric Budish, a University of Chicago economics professor, and Ben Roin, assistant professor of technological innovation, entrepreneurship and strategic management at M.I.T." I'm damn near 40, and the phrase "there's no money in a cure" has been around as long as I can remember. Heck, Chris Rock did a whole bit about it. [0] Is this just putting good science behind that phrase? Is there anything new here? [0] http://anonhq.com/chris-rock-on-big-pharma-no-money-in-the-cure-the-moneys-in-the-medicine/ http://anonhq.com/chris-rock-on-big-pharma-no-money-in-the-c...

laotzu 11y ago
It is the broken window fallacy: http://www.investopedia.com/ask/answers/08/broken-window-fallacy.asp http://www.investopedia.com/ask/answers/08/broken-window-fal...
habitue 11y ago
I was thinking this originally, but as I read it, it seems the referenced paper is much more narrowly focused. The idea is that the studies involved are easier to do on late-stage patients because mortality is the benchmark and people who are in an advanced stage die sooner. You find out whether it decreases mortality much quicker when the patients are closer to the end. Decreased testing time increases the time when the patent is both active and FDA approved (i.e. years they can make money on it). The usual reasoning behind "there's no money in a cure" is that you can squeeze a lot more money out by treating patients for years than by selling them a cure once. That's still a reasonable cynicism, but it's not what this paper was looking into. Edit: another way of thinking about it is that if a company is maximally evil (economically rational), they would want to research early-stage cancer treatments because that would allow them to milk the patient much longer. Even with this incentive, they still don't do it, they research treatments that are faster to verify efficacy for.
jandrewrogers 11y ago
There is an enormous amount of money in a cure, mitigation is mere tactical profit that you take when there is no obvious cure. The thing to remember is that, at least in the US biotech market, there are a large number of companies competing for those profits. Patients benefit immensely from mitigation research -- look at HIV. A lot of mitigation therapies were originally "cures" that did not work as well as hoped. At any point in time, patients have the choice across the spectrum of mitigations or cures. Cures are more difficult to produce but if they are available patients will choose them every time. Companies that produce mitigating medicine are counting on their ability to recoup investment before a cure materializes at some point in the future. If a cure becomes available, the value of their mitigation research goes to zero. Biomedical companies make bets that, if a disease looks particularly difficult to cure, mitigation will retain its value long enough to return a profit as a product. Most biomedical research companies are looking for cures because it allows them to do an end run around their competitors and grab most of the profits. Every biomedical company wants a cure because it completely displaces competitive mitigation strategies and therefore allows them to collect virtually all of the profits. Mitigation is the fallback position when cures fail. But biomedical research is looking for the cure that will give the a naturally monopoly position by default.
adevine 11y ago
If there's no money in a cure, how are the new hepatitis-c cures being sold for tens of thousands of dollars?
- davmre 11y ago
  Very controversially.
- HarryHirsch 11y ago
  Because the only other cure is a liver transplant, and the market will pay anything up to that price.
ars 11y ago
> there's no money in a cure I hope no one actually believes that, because it's really quite a stupid thing to say. There are TONS of industries that rely on selling things just once to consumers, and yet they have a huge market. How often do you buy a new toilet for example? Yet there are tons of models with lots of competition. There's plenty of money in a cure.
- copperx 11y ago
  Not only that, but it makes the stupid assumption that a cure will be just one or a few doses. The cure could very well mean taking a pill for the rest of your life. Hell, if you told cancer patients "we can control it, but it involves taking a pill once a day for the rest of your life. The cancer will not shrink, but it will never metastasize to other sites and you will not die from it as long as you take the pill." -- they will KILL to get ahold of it. That would be the way for an evil company to extract maximum profit. And that's assuming there's a monopoly or a collusion between pharma companies (in reality, there is big competition). Until that becomes a reality (if ever), people should shut up about cancer conspiracy theories.

laotzu 11y ago

It is the broken window fallacy: http://www.investopedia.com/ask/answers/08/broken-window-fallacy.asp http://www.investopedia.com/ask/answers/08/broken-window-fal...

habitue 11y ago

I was thinking this originally, but as I read it, it seems the referenced paper is much more narrowly focused. The idea is that the studies involved are easier to do on late-stage patients because mortality is the benchmark and people who are in an advanced stage die sooner. You find out whether it decreases mortality much quicker when the patients are closer to the end. Decreased testing time increases the time when the patent is both active and FDA approved (i.e. years they can make money on it). The usual reasoning behind "there's no money in a cure" is that you can squeeze a lot more money out by treating patients for years than by selling them a cure once. That's still a reasonable cynicism, but it's not what this paper was looking into. Edit: another way of thinking about it is that if a company is maximally evil (economically rational), they would want to research early-stage cancer treatments because that would allow them to milk the patient much longer. Even with this incentive, they still don't do it, they research treatments that are faster to verify efficacy for.

jandrewrogers 11y ago

There is an enormous amount of money in a cure, mitigation is mere tactical profit that you take when there is no obvious cure. The thing to remember is that, at least in the US biotech market, there are a large number of companies competing for those profits. Patients benefit immensely from mitigation research -- look at HIV. A lot of mitigation therapies were originally "cures" that did not work as well as hoped. At any point in time, patients have the choice across the spectrum of mitigations or cures. Cures are more difficult to produce but if they are available patients will choose them every time. Companies that produce mitigating medicine are counting on their ability to recoup investment before a cure materializes at some point in the future. If a cure becomes available, the value of their mitigation research goes to zero. Biomedical companies make bets that, if a disease looks particularly difficult to cure, mitigation will retain its value long enough to return a profit as a product. Most biomedical research companies are looking for cures because it allows them to do an end run around their competitors and grab most of the profits. Every biomedical company wants a cure because it completely displaces competitive mitigation strategies and therefore allows them to collect virtually all of the profits. Mitigation is the fallback position when cures fail. But biomedical research is looking for the cure that will give the a naturally monopoly position by default.

adevine 11y ago

If there's no money in a cure, how are the new hepatitis-c cures being sold for tens of thousands of dollars?

davmre 11y ago
Very controversially.
HarryHirsch 11y ago
Because the only other cure is a liver transplant, and the market will pay anything up to that price.

ars 11y ago

> there's no money in a cure I hope no one actually believes that, because it's really quite a stupid thing to say. There are TONS of industries that rely on selling things just once to consumers, and yet they have a huge market. How often do you buy a new toilet for example? Yet there are tons of models with lots of competition. There's plenty of money in a cure.

copperx 11y ago
Not only that, but it makes the stupid assumption that a cure will be just one or a few doses. The cure could very well mean taking a pill for the rest of your life. Hell, if you told cancer patients "we can control it, but it involves taking a pill once a day for the rest of your life. The cancer will not shrink, but it will never metastasize to other sites and you will not die from it as long as you take the pill." -- they will KILL to get ahold of it. That would be the way for an evil company to extract maximum profit. And that's assuming there's a monopoly or a collusion between pharma companies (in reality, there is big competition). Until that becomes a reality (if ever), people should shut up about cancer conspiracy theories.