Comment by tptacek
3 hours ago
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.
3 hours ago
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.
It does make sense if you turn it around
"Having permanent patient by treating only symptoms is better than curing them right away"
Basically living (comfortably, or at all) as a subscription service
That you can imagine an even better business model than X, does NOT mean X is a bad business model!
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.
Aren't there ethical committees to avoid that? Health is not a normal business.
Goldman Sachs modus operandi is leaning too far on the parasitic side of the spectrum
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.
This was kind of true for Spain: they imported so much silver that they had inflation causing massive economic destabilization.
When the supply runs dry, demand will naturally increase. Hoarders will be golden at that stage.
"I've seen gluts not followed by shortages, but I've never seen a shortage not followed by a glut."
-- Nassim Taleb