There’s more to medicine than profit

Once when I was a little boy, a lightbulb burned out in a lamp in our house. As my dad changed the lightbulb I asked him why they don’t make lightbulbs that last forever. He said, “if they did that, the people who make lightbulbs wouldn’t make any money.”

I didn’t think too hard about that answer at the time, but I thought about it right after I read this story from Tae Kim at CNBC, about something a Goldman Sachs analyst wrote in a report to biotech company executives last week. 

The report, entitled “The Genome Revolution,” asks, “is curing patients a sustainable business model?” The answer is no, at least not in the long run: 

“The potential to deliver ‘one shot cures’ is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies. While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.”

“People would love a lightbulb that lasts forever,” the report basically says, “and it would be great for society. But you would make less money if you made one of those.” Except, instead of lightbulbs, it’s cures for hepatitis of diabetes or what have you. The report goes on to outline ways these companies could make more money if they focus on chronic therapies rather then cures, not because it’s better for the world, but because it’s better for the bottom line.  

The report hit the news the other day and since then I’ve seen a good amount of outrage about it on Twitter. It seems perverse to many that an analyst from an investment bank would tell biotech company executives that curing diseases is not as good for “sustained cash flow” as treating a recurring stream of customers who never are cured but always need expensive medical products.

Such outrage is misplaced. Or at least not sufficiently placed. We should not merely or even primarily be outraged at the Goldman Sachs analyst. What he said is completely true. That doesn’t get him off the hook, of course, as “I was just doing what I was asked to do” is not, last I checked, a “get out of morality free” card, but that’s not the end of the discussion. What’s outrageous is that we willingly accept a medical system in which what he wrote in that report can be completely true. One in which “cash flow” rather than “tremendous value for patients and society” is the priority and in which those two things are at odds. 

The medical establishment — including providers, the pharmaceutical industry and biotech firms — has long been caught in a fundamental dilemma between the need to cure and treat the sick and the pursuit of market-based wealth. These actors have improved and extended the life for millions of people through their products and services, yet the need to make entrepreneurial decisions is frequently at odds with the advancement of public health, particularly the health of the poor.  Striking a balance between those allegedly equal imperatives is why biotech firms do things like hire Goldman Sachs analysts to tell them what to do. Well, that and putting the hard, moral and ethical calculations inherent in this dilemma in someone else’s hands. 

Motives aside, the lines of debate on this tend to break down between (a) pro-market actors arguing that, if not for the profit motive, biotech firms and pharmaceutical companies would not research and develop lifesaving cures and drugs; and (b) those who find profiting off of the lives and health of others to be immoral on the other. The former group tends to believe in the market like the devout believe in a god, believing that it will provide all that we need if we merely have sufficient faith. The latter group is often naive about what, exactly, motivates human beings to do anything.

The market is not just, of course. It creates “winners” and for there to be “winners” there must be “losers.” In the context of people’s lives and health, the existence of “losers” is obscene. Likewise, most people are not inherently altruistic. Depending on people to simply do the right thing, however noble, is misguided. 

Typically at this point in the discussion someone will bring up Jonas Salk, who famously eschewed patenting the polio vaccine despite the fact he could have made billions of dollars if he had. When asked why he did this, Salk famously said that “the people” owned the patent and asked, rhetorically, “would you patent the sun?” Salk truly believed that, by the way. He considered his work to be a “moral commitment” — his words — and devoted the rest of his life to trying to make the world a better and healthier place when he could’ve spent it sitting on boards, hitting the lecture circuit and raking in boatloads of cash. I tend to think he’s the exception, not the rule, when it comes to this sort of thinking.

Either way, it did not require someone as altruistic as Salk was for the polio vaccine to be developed. Salk’s research, after all, was not free. It was funded by donations from The National Foundation for Infantile Paralysis — the March of Dimes — which represented a massive mobilization of the public, spurred on strongly by FDR and the federal government. Rather than R&D losses willingly taken in the hopes of future profits to help recoup those costs, the polio vaccine was financed on the front end by hundreds of millions of donations. As I said, Salk truly was an altruist, but it’s also the case that if he had patented the vaccine, he’d be double-dipping in a sense. The public, in large part, had already paid for it, the work was done and then society benefitted, massively. 

I will not pretend to have all of the answers about how to best structure our medical and public health system. I appreciate that innovators require incentives and funding to innovate and that depending on altruism to solve society’s problems is unrealistic. I do not believe, however, that Goldman Sachs analysts are privy to the only means by which innovators can innovate and I do not believe that the market is as omnipotent as Goldman Sachs analysts believe, especially when it comes to public health, where the ultimate rewards are not and should not be financial ones. 

Don’t believe people when they tell you that taking the profit motive away from science that science will cease to exist. Don’t believe them when they tell you that the market will provide optimal outcomes. We have plenty of counterexamples to both of these spurious assertions and we can do better than we are doing to deliver the goods which benefit humanity.

Craig Calcaterra

Craig is the author of the daily baseball (and other things) newsletter, Cup of Coffee. He writes about other things at He lives in New Albany, Ohio with his wife, two kids, and many cats.