Goldman Sachs: Curing Patients’ Illnesses Is Bad for Business

I'm amazed at the ability to even have thoughts like that...and then to publicize them. I'm in sales and I understand how businesses run. But it takes a special type of evil and greed to think something like this.

 

I hear you completely, but I don't totally agree.

Arguably, we are stuck with at least a partial for-profit health industry. Given that reality, and the huge $ involved, it's worth admitting and being honest about the conundrum of really good treatments that shortcut their own long-term profits. How can you incentivize a for-profit company to develop an excellent affordable "cure" and perhaps never recoup its enormous development cost for the drug? I damn sure don't have any easy answer to that. This is one of many reasons that for-profit medicine is necessarily a paradox. While society has a huge incentive to keep citizens healthy, a treatment company can't really see much of a future in that.

 

Yet another example why health care should be a non-profit model.

 

While I can understand the sentiment, if that were the case, we'd be 20 years back in terms of curing basically everything. While the pursuit of profit is distasteful, it's what drives these companies to invest billions into finding new drugs.

 

This is the age old health care lie.

 

all them cures trickling down...

 

You sound like a right-winger saying global warming is a lie. Just because you don't like it doesn't mean it is not true.

 

Oh please. Go back to your NewYorker account. Drug companies spend tens of billions of dollars on advertising, sales people, and all kinds of nonsense to push their drugs. Add that to the tens of billions of dollars in profits and you have more than enough money to do all the damn research you want.

 

Of course this is common sense from a Wall Street perspective. GS isn't in the business of being moral police or running a charity. They just make money and are very good at it. This is sort of like being outraged at funeral director for hoping people keep smoking or eating red meat. The research report is for institutional investors to base investment decisions and not to pass judgement on the ethics of treating Hep C. At the end of the day your 401k or mutual fund investments will affect you more personally.

If not for the for-profit model of US healthcare, it would be very difficult to attract the best and brightest minds into clinical medicine and research. Harvoni and Sovaldi are miracle drugs brought upon by the genius research minds at Gilead. Of course they will bilk the American consumer because no one actually wants healthcare change in this country due to vested interests. It costs nearly 100K for a 12 week treatment of Harvoni in the USA but if you travel overseas this exact same treatment is under $1000. Gilead to their credit has formed alliances with generic drug makers in the developing world where more than half the world's population of Hep C exists today.

 

It's actually not like that. Capitalism without ethics is why Goldman are a bunch of scumbags.

The magic hand of capitalism. Only the best and brightest will become doctors if the United States pays 10 times the cost of drugs than the rest of the world. Sounds good.

 

Capitalists make money and ethicists usually sit in universities or think tanks complaining about the world or write books which are generally only read by other ethicists. It's either that or complaining on Twitter. Either way folks like these don't bring any solution, but rather just pose random thought experiments. Folks who work for GS and other IB's don't hide the fact that they appreciate and value money. There is more honor in being honest about one's intentions than to hide behind some fake false outrage based on any seemingly random grudge against society.

GS and their investors have actual skin in the game in regards to making investment decisions that affect a far greater number of people in the USA than people who actually have Hep C in the USA. If you don't like GS, go short it or buy put options hoping for their eventual demise. If you are currently employed you are a capitalist.

The best and brightest foreign medical doctors and researchers from places like Nigeria, India, China, Russia and Pakistan don't go seeking employment in Europe. They come to America for an economic reason and that is why America is the world leader when it comes to innovation.

 

I presented a solution in my first post.

Being disgusted that people and companies profit off the misery of sick people isn't fake outrage nor is it a grudge against society. It's a grudge against a health care system that is an enormous failure. Engaging in capitalism and having ethics aren't mutually exclusive.

So if I'm currently employed I'm a capitalist and if I support social security then I'm a socialist. So confusing.

 

I don't disagree with you that it's a necessary function...but that doesn't change that someone had to think it first. Someone said, "We can't cure that because it's better for us financially if we don't".

I just don't have a brain that works like that. It's why I'll never be a titan of business, I guess. To me, yes, they might cure something and that medicine is no longer needed. It's not like there's only 1 thing to cure. There's always avenues for them to be profitable.

 

It's called Autism. I'm convinced the top analysts for these funds are on the spectrum.

 

Those people would be dying.

I get it that it feels outrageous that pharma companies make billions on cancer drugs. It feels wrong that people have to mortgage their lives to survive. Many cancer drugs cost upwards of 10K or more per month without much guarantee of changing survival.

But your viewpoint is simplistic and doesn't reflect the fact that without the profit incentive these drugs would never be made. They don't spend billions to market these drugs by the way - that's a ridiculous claim (unless you are talking about Viagra). But they do invest billions to develop them. When you consider the years of research and the size of the teams that do the research - entire buildings dedicated to developing one drugs - hundreds of people, not to mention the legal costs as well as the risks of getting past trials and the FDA - no one is going to invest billions in making these drugs unless they know they can make billions. And when you are talking about treating a disease that only 10,000 people may have in a year, you can see why it gets so expensive.

There is no doubt there is a problem with our system. But simply saying, "oh, the pharma companies are evil and we don't need them" isn't going to work. And this isn't just a US thing - these drugs are expensive all across the globe. It's just that in other countries, they just let you die instead of giving you these drugs.

I'm being very serious here as this is an issue most of us will grapple with at some point in our lives - either for ourselves or a loved one. I think the first question that should be asked - if you want a non-profit system - where would the money come from to fund research into new drugs that require billions in investment? What non-profit will take a risk of investing a billion dollars and 10 years with the mostly likely outcome is that nothing comes out of it?

 

I don't think many go into the industry just for that profit incentive. They likely wanted to change and better the world with new breakthroughs and innovations, maybe win a prize and get their mug on a magazine.

Reality sets in when R&D and clinical trials can last upwards of 5 to 15+ years and cost hundreds of millions or billions in the process. When you employ tens of thousands of people, you're literally betting on their lives and prosperity based upon which drug research to pursue and whether it'll pan out. Like what Brightside mentioned, it's up to investors to bet on your bets in order to see those hundreds of millions were worth it.

So it's not like planting a few seeds or even constructing a building that takes 20 years to finish and harvest. Instead of working with known knowns and known unknowns, they're more like several shots in the dark into complex systems that movies and TV shows simplify to tighten the pacing.

Even when you come up with something that has medical impact, you have to bet again to see how it works and effects people. Something bad happens and you bring it out, you could get sued for billions several years later.

So yeah, it takes a specific kind of person to make it happen. Not necessarily evil, but likely enough coldness not to lose too much sleep over their daily decisions. I don't feel sorry for them because of the amount of money they could make, and they definitely have their role in our ever growing 7 billion+ society.

Having gotten that out of the way, I don't think anyone disagrees the current system needs reforming. Not sure how we maintain supplies of abandoned or unprofitable drugs without outright subsidizing them (which one can consider as a sad endgame for the illnesses on the "cured" list). It's a risky bet to assume other countries will carry their share if the US stops subsidizing R&D with the current madness, but hey that's our choice because we're indirectly paying for it.

More importantly, I don't think it's on the companies to reform itself or assume the government will put them in line when meaningful reform comes with expectations upon the voter to act and think more responsibly. As long as insurers (and the government by extension) subsidizes all medical costs and takes sticker shock away from the consumer, the average patient really has no reason to give a **** about generics, patent rights, or abandoned drugs. Getting a script for that new cholesterol pill justifies a doctor visit more than getting nagged on by the doctor to take omega-3 pills and to move that fat ass more often.

That some pharmas invest into sex pills and patent rebadges over curing something that affects a few million worldwide is a fundamental break in capitalism, but curing one out of hundreds of conditions is not something people will willingly spend their tax money over with unguaranteed results...unless it's your condition.

I don't even think making something like curing AIDS as an entirely non-profit endeavor would up the timetable for a cure. You'd still have the ethical question of whether tens of thousands of people involved in the supply chain would turn off the lights once they knew a cure was in their grasp. Knowing the bureaucracy, it'd be even less honest when tax money and accountability is involved.

 

The sale peaked in 2015 when the drug was the only choice. Two new drugs replaced Harvoni (Zepatier/Glecap-Pibrentasiver) which work on the same principle but target different rna steps and cost 75% less (FDA should be given credit for granting express approval) . So it’s most likely Goldman Sachs were talking about market vitality/volatility for investors and not Assad’s like morales

I do invest in companies applying for phase II,sometimes I get 500% return,sometime I loose every penny ,but I won’t put significant money to it no matter how good the odds

 

Government providing research funds for these huge initial research cost.... for profit take it to production. Wouldn’t that work? Doesn’t have to be an either or solution.

I’m thinking bacteria resistance... need the next drug and we need huge investments now.

 

Get out of here with best and brightest BS. When people with 3.8 and 32 are not getting into med school i am sure there are more than enough equalified people to do this stuff.