The Herman Cain-Inspired “1-100-0″ Plan for Personalized Medicine?

11/14/11Follow @xconomy

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to subtract $26 billion. That’s a scary amount of money in an industry where the largest biotech company, Amgen, generated about $15 billion in revenue last year.

The biotech business model, shaky as it is, has long depended on charging sky-high prices for the few products good enough to navigate the long cycle of product development. Words like “cost-effectiveness” or “comparative effectiveness” are scary terms that sound like price controls, in an industry that depends on there being no price controls.

I understand that creating new healthcare products takes a lot of time and money, and involves a lot of risk of FDA rejection. Some investors are walking away. Biotech is in trouble, so I understand why people get defensive when some guy says your products have to be safe and effective AND cheaper?

Emanuel’s message may be simple, and easy to dismiss, especially the “1-100-0″ part. But that would be missing the larger point. The reality is that healthcare spending can’t go up forever. The prices of new technologies aren’t going to go up forever. Instead of scoffing about the skunk at the garden party, everyone in that room would have been better off listening, and thinking about how to adapt to the new reality.

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  • Jerry Jeff

    I totally agree, Luke. You have to figure that even in these early days we’re close to the peak for biotech drug pricing.

  • http://www.biotechtranslated.com Biotechtranslated

    I think the truth (as usual) is somewhere in between. I don’t think anyone can argue that Genentech’s herceptin diagnostic isn’t adding value.

    But I would agree that not everything can have a companion diagnostic and in many cases, it adds no value anyways.

    Oncology will be the poster child for diagnostics, but it won’t be “one drug for one person”, it will be a handful of drugs that will allow for specific treatment regimens for specific groups of patients.

    Mike

  • http://Xconomy James Keeney

    I agree, too. With regard to pharmaceutical and biotech therapeutics, this why you have to break the mold of Hatch-Waxman patent expirations and go to a system of “perma-patents” (thank you, Luke, for the term).

    By granting these companies unlimited patent life in return for lower introductory prices for newly marketed compounds, they would benefit by having a longer period with which to realize profits from their $1-2 billion R&D investment per new drug. Competition, not government regulation, would limit their ability to pass along hefty price increases in succeeding years.

    But, companies then would invest more in many more areas of therapeutic R&D than is ongoing today, where cutbacks in marginal areas is the rule of the day. Shareholders in these companies likewise would benefit. With drug patents no longer endangered, finally, you would have a marked increase in dollars being invested in start-up biotech firms.

  • Mark Minie

    These will be the kinds of personalized medicine technologies that will break the cost curve, broaden high quality health care availability and provide highly personalized medicine…

    Scanadu Trailer
    http://www.youtube.com/watch?v=KSwMauCno6o

    The Doctor is Always In
    http://youtu.be/4OT3bDiMWK0

    IBM Watson: Transforming Healthcare
    http://youtu.be/95eF4Dn3CL0

    Biotech/biopharma should be more focused on these approaches now that the currant “pill business model” is broken, while being more open to new emerging biology such as microRNAs as diagnostics and treatments…

    Analytical aspects of microRNA in diagnostics: a review. Anal Chim Acta. (2011)
    PMID: 21704768
    http://www.sciencedirect.com.offcampus.lib.washington.edu/science/article/pii/S0003267011006647

    Antagonism of miR-33 in mice promotes reverse cholesterol transport and regression of atherosclerosis. J Clin. Invest. (2011)
    PMID: 21646721
    http://www.jci.org/articles/view/57275

  • http://amanwithaphd.wordpress.com/ Richard Gayle

    A major shift from personalized medicine will be keeping healthy people healthy, rather than trying to heal sick people. In a few years, everyone will be able to collect a huge database – collected more than daily – of the state of their body. From proteins to metabolites, from DNA to microRNA, labs on a chip connected to mobile devices will catalog what a healthy body not only looks like for every person but also how to perturb it by diet, medication, exercise and emotions. This will make specific therapies to restore the healthy pattern much easier to track and deal with.

    Medications will not be based on statistics, as they currently are but on the specific reaction of individuals to the therapy. I would expect that it is much cheaper keeping healthy people healthy than waiting until they get sick to use a therapy that might at best have some statistical benefit over any harm it might do.

  • http://www.xconomy.com/author/ltimmerman/ Luke Timmerman

    Richard—this is a great point, and similar to what Lee Hood said in his keynote talk at the Personalized Medicine Conference last week. I think there will be great resistance to this movement for a number of reasons.

    The vested financial interests in Big Pharma and Big Hospitals/Delivery right now want to treat people who are sick, not really keep them well. And the evidence-based medicine crowd that believes so strongly in randomized clinical trials will insist that N of 1 experiments are mere anecdotes, and not the basis for making any judgments on how to stay healthy.

    I think it will be fascinating to see if the systems biology and open source biology movements can come up with data that’s compelling enough to overcome these objections.

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