Saying that curing diseases is a bad business model is like saying discovering the world's largest gold mine would be a bad business because you'd eventually run out of gold. The underlying argument doesn't make sense.
No, this is the basic naive argument I'm responding to. It's nice to have long-term recurring revenue, but customers have a very strong preference for a cure, which means the owners of cures will outcompete the owners of subscription treatments. And then to say those cure-owners are in a "bad business", again, is like saying you'd go "aw shucks" if you happened on an enormous seam of gold.
That assumes equal ability to manage a long-revenue-stream treatment that keeps people alive enough not to die but doesn't help them enough to stop taking it. Doable for somethings. Not so much against cancer.
And it assumes none of your competitors spot the cure that you suppressed or simply didn't look for and eat your lunch by taking all those patients away from you.
If you "accidentally" came up with a single-course cure for something like Crohn's or RA while trying to create a every-three-months recurring treatment instead, would you honestly shelve it? No.
You could make an argument that the incentives discourages certain types of research, but that's assuming a certain level of foreknowledge about how to treat or cure a lot of these things that I don't think we have right now.
It doesn't make any sense unless there is only one drug company with a total monopoly. Even if one drug company develops a highly profitable drug which only treats symptoms, all of their competitors still have a financial incentive to undercut them by developing a cure.
In July 2009, journalist Matt Taibbi invoked an indelible image when he described Goldman Sachs as “a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
The argument only makes sense under certain assumptions: you can't protect the IP from being copied (leading to competition and eroding economic rents), or the government will place a price ceiling (price controls).
Otherwise, the demand will be highly inelastic, so you cannot really invent a better business model. The pricing power you would wield as the monopoly provider of life & death would be tremendous.
It would be fruitful to put the example in the article under closer scrutiny.
tptacek is right, this whole discussion is silly because it revolves around what exactly "bad" means which is subjective. But if you want to really do calculations about this, you'd need to price out total expected revenue over your time preference window for each scenario. It's not at all obvious which one would win because it depends on at least these variables and probably more:
1. Over what time period you care about. "You" here means a hypothetical pharma executive who cares about his/her incentives. If symptom management makes a billion dollars repeatedly but each billion takes 200 years, and a cure makes a billion dollars once but in five years, nobody rational will want to sell symptom management.
2. Related to (1) what expected market returns are in future.
3. What price premium you can charge for a cure vs symptom management. The former is more valuable to customers.
4. How fast competitors can catch up. Imagine you find both symptom management and a cure for disease X. You keep the cure a secret and bring the subscription to market (for a price much less than what a cure would command). Six months later a competitor releases a cure, simultaneously wiping out your market and capturing all the immediate revenue. That would have been a bad move.
It very obviously is. You went from using normal-person quotation marks to fitted quotes in the span of one message, you have a Unicode multiplication dot, and things like
Again, this is not “subjective.” It’s what actually happens
This isn’t a subjective opinion. It’s just how discounted cashflow works.
You can argue about the ethics if you want. But the financial comparison isn’t ambiguous.
Your paste doesn't even use a normal keyboard minus sign:
|nue) ... cost. S|
Another tell is how much of the quote isn't responsive to the whole thread context, just Hearn's immediate message. I'll add that it doesn't even manage to rebut Hearn!
(Feel free to compare this to your own writing style to get some clarity for what to fix up next time before pasting LLM output).
In case you were typing while I updated this, the first version of this comment didn't notice your minus sign, but it stuck out to me and when I checked it was so funny you used an en-dash I couldn't not include it.
I'm sorry, but if you _actually_ think about it, your whole premise is ridiculous.
We'll put aside the obvious fact that drug researchers are, you know, people who presumably got into the industry to help people, which includes themselves and their families.
We'll also put aside the fact that drugs go out of patent relatively quickly, and they'd just lose out to generics. Like they do now.
The simple truth is they don't need to manufacture more clients, because a stream already exists. There are always new people developing new diseases and new issues. There's an incentive to come up with new and better tools to pull money away from generics.
Don't fall prey to paranoid thinking, actually think about it.
