3 ms·

Do you think insurance companies are going to be willing to pay $100K per person to cure the common cold?

tempestn 9y ago
No, but it would be reasonable to pay ~ $1000 per person, which could mean hundreds of billions of dollars of revenue. Pretty good for $1B in R&D.
JumpCrisscross 9y ago
> Do you think insurance companies are going to be willing to pay $100K per person to cure the common cold? This is a straw man. Millions of Americans contract a rhinovirus strain every year [1]. The number is closer to 30,000 for HCV [2]. A rhinovirus cure thus has orders of magnitude more potential customers across which to spread fixed costs. On the demand side one has, on one hand, 7 to 10 days of the sniffles; on the other hand, fatal liver failure. Nobody would pay, nor should expect a third party to pay, $100,000 to cure their common cold. The article eyeballs the value of the vaccine market. It’s approximately the present value of 8.7 hours per year * your marginal hourly earnings over your remaining working years. [1] https://www.cdc.gov/features/rhinoviruses/index.html https://www.cdc.gov/features/rhinoviruses/index.html [2] https://www.hepatitisc.uw.edu/pdf/screening-diagnosis/epidemiology-us/core-concept/all https://www.hepatitisc.uw.edu/pdf/screening-diagnosis/epidem...
- danieltillett 9y ago
  I am not saying that curing the common cold would not be incredibly valuable to society, but responding to the OP who was suggesting that since we have a treatment for HepC we can have one for the common cold. The pharma companies look at what insurance companies will pay for and develop drugs and vaccines that they will pay for. The insurance companies know the cost to their bottom line of hepC and they know the cost of the common cold.
  - philipov 9y ago
    Is that supposed to be an excuse, or the beginning of an argument for disbanding the current pharma and insurance industries? You've articulated very clearly why their adverse incentives are bad for society.
claudius 9y ago
At least in Germany, most common cold remedies are not paid for by insurance companies but private people (since they have not been proven to work etc.). So insurance companies would only save the additional costs once the cold develops into something worse, which is relatively rare.
fragmede 9y ago
So let the pharma companies charge $100k. If you're in the top whatever percent of rich people with a net worth over $100 million, would you not pay $100k to be better from the common cold? Call it the Tesla model - don't go for the price conscious mass-market first. Sell to those for whom money is no object first. Build the Model-S of common cold treatment. When you feel a cold coming on, your private house-call-making doctor comes to your house, you cough on a petri dish with rhinovirus food, the doctor takes it back to the lab, rushes it through whatever testing is required, then comes back the next day, gives Bill Gates a pill or a shot, and the day after, he's right as rain. Simultaneously, work on getting the cost of the equipment down. Depending on what's being research, a medical lab could easily cost over $10 million - too expensive to scale quickly, but making lab equipment that's orders of magnitude cheaper will pay dividends for itself. The first human genome that was sequenced cost ~$3 billion, now we're just waiting for it to drop below $1000 (currently at $1400). (23&me's $200 kit isn't technically sequencing, but they definitely also benefitted from that work.) Once the cost is brought down, bring it to a broader market. Charge $1,000 to never get the common cold again, and reap in money selling both the cure and the supporting equipment. There are enough people paying over $1,000 for elective surgery to support many plastic surgery clinics; I'd venture a cure for the common cold would be able to sustain a few, at least until a competitor comes out with a vaccine. Unfortunately, the NTSB and the FDA regulations, as well as the behavior of patents on things like car transmissions vs drugs, are very different things (for good reason, mind you), so this isn't a likely scenario.
- KGIII 9y ago
  Would I pay $100k to prevent me from getting the common cold, I am absolutely able to afford it? Hell no. I might pay for treatment for someone who were immunocompromised. For me? Nope. It's just a virus. It'll go away. I'd pay a lower amount, however.
  - derekp7 9y ago
    Assuming you had the means, would you pay 100k with the knowledge that, as an early adopter, you will be helping making future treatments more affordable for those who really need it? think of it as a 100k donation, and you get a cold cure for free.

No, but it would be reasonable to pay ~ $1000 per person, which could mean hundreds of billions of dollars of revenue. Pretty good for $1B in R&D.

JumpCrisscross 9y ago

> Do you think insurance companies are going to be willing to pay $100K per person to cure the common cold? This is a straw man. Millions of Americans contract a rhinovirus strain every year [1]. The number is closer to 30,000 for HCV [2]. A rhinovirus cure thus has orders of magnitude more potential customers across which to spread fixed costs. On the demand side one has, on one hand, 7 to 10 days of the sniffles; on the other hand, fatal liver failure. Nobody would pay, nor should expect a third party to pay, $100,000 to cure their common cold. The article eyeballs the value of the vaccine market. It’s approximately the present value of 8.7 hours per year * your marginal hourly earnings over your remaining working years. [1] https://www.cdc.gov/features/rhinoviruses/index.html https://www.cdc.gov/features/rhinoviruses/index.html [2] https://www.hepatitisc.uw.edu/pdf/screening-diagnosis/epidemiology-us/core-concept/all https://www.hepatitisc.uw.edu/pdf/screening-diagnosis/epidem...

danieltillett 9y ago
I am not saying that curing the common cold would not be incredibly valuable to society, but responding to the OP who was suggesting that since we have a treatment for HepC we can have one for the common cold. The pharma companies look at what insurance companies will pay for and develop drugs and vaccines that they will pay for. The insurance companies know the cost to their bottom line of hepC and they know the cost of the common cold.
- philipov 9y ago
  Is that supposed to be an excuse, or the beginning of an argument for disbanding the current pharma and insurance industries? You've articulated very clearly why their adverse incentives are bad for society.

claudius 9y ago

At least in Germany, most common cold remedies are not paid for by insurance companies but private people (since they have not been proven to work etc.). So insurance companies would only save the additional costs once the cold develops into something worse, which is relatively rare.

fragmede 9y ago

So let the pharma companies charge $100k. If you're in the top whatever percent of rich people with a net worth over $100 million, would you not pay $100k to be better from the common cold? Call it the Tesla model - don't go for the price conscious mass-market first. Sell to those for whom money is no object first. Build the Model-S of common cold treatment. When you feel a cold coming on, your private house-call-making doctor comes to your house, you cough on a petri dish with rhinovirus food, the doctor takes it back to the lab, rushes it through whatever testing is required, then comes back the next day, gives Bill Gates a pill or a shot, and the day after, he's right as rain. Simultaneously, work on getting the cost of the equipment down. Depending on what's being research, a medical lab could easily cost over $10 million - too expensive to scale quickly, but making lab equipment that's orders of magnitude cheaper will pay dividends for itself. The first human genome that was sequenced cost ~$3 billion, now we're just waiting for it to drop below $1000 (currently at $1400). (23&me's $200 kit isn't technically sequencing, but they definitely also benefitted from that work.) Once the cost is brought down, bring it to a broader market. Charge $1,000 to never get the common cold again, and reap in money selling both the cure and the supporting equipment. There are enough people paying over $1,000 for elective surgery to support many plastic surgery clinics; I'd venture a cure for the common cold would be able to sustain a few, at least until a competitor comes out with a vaccine. Unfortunately, the NTSB and the FDA regulations, as well as the behavior of patents on things like car transmissions vs drugs, are very different things (for good reason, mind you), so this isn't a likely scenario.

KGIII 9y ago
Would I pay $100k to prevent me from getting the common cold, I am absolutely able to afford it? Hell no. I might pay for treatment for someone who were immunocompromised. For me? Nope. It's just a virus. It'll go away. I'd pay a lower amount, however.
- derekp7 9y ago
  Assuming you had the means, would you pay 100k with the knowledge that, as an early adopter, you will be helping making future treatments more affordable for those who really need it? think of it as a 100k donation, and you get a cold cure for free.