Every so often, along comes someone who just determines that the game is a tad “tilted” and decides not to belly up to that table. On second thought, decides to construct a new game of their own making and constructed in such a level way that public good ranks right up there with making a fair profit.
The game in question is Big Pharma, of course, which everyone knows has manipulated the research, manufacturing, and sales of life-saving medicines to generate as fat a margin as can be mustered – public be damned, and shareholders be pleased.
As Barbara Handelin, founder and CEO of Audacity Therapeutics explains it, developing medicines is a high-risk investment and high risk demands a high return. It makes sense for Wall Street to encourage the development of medicines for a select few diseases that can satisfy its investors.
Pharma companies have to focus on either very large markets (common diseases) in chronic conditions (e.g. high blood pressure or cholesterol) where billions of pills can be sold at good profit margins, or as above, on bespoke medicines in small patient groups where a single lifesaving medicine is very expensive per patient.
So, what’s her company’s problem with these choices?
For one, she says, “We have developed drugs for only 10 percent of the roughly 6,500 human diseases we know about – and at increasingly stratospheric prices.
I feel the need for greed
(Forgive my dragging Top Gun into this, but the comparison to Top Dollar was irresistible. The comparison strengthens when you realize that our high-flying friends in Pharma want to stay “up there” – cuz that’s where the money is. There is no incentive to be found in drugs priced below the stratosphere.)
Once upon a time, biotech companies set out to radically redefine human disease and treatment from the DNA on up and bring medicinal chemistry (pharmaceuticals) out of the dark ages. So far, so good.
As Dr Handelin describes it, the problem was the evolution of biotech financing which has established a general expectation of spectacular returns in this industry. This expectation is set by the sources of investment capital available to build these companies, from private (e.g., Venture) seed capital, seeking extraordinary ROI, to shareholder pressures in the public markets.
She sighs, “No one seems to have asked a basic social question: should we be generating huge profits in the medical industry? Or is medicine one of those sectors that is too essential for our basic welfare to allow for financial ‘gaming’ here everyone but the patient is financially rewarded?”
The Audacity alternative
“What if there were biomedical and pharmaceutical companies with a primary purpose and duty to make as many affordable medicines for as many disease conditions as possible?” she asks.
Companies like these might develop therapies for untreated or under-treated human diseases, focus on disease solution opportunities rather than 10X market opportunities, even guarantee that drugs are produced at prices affordable and accessible to all patients…worldwide!
Some of these prospective diseases and drugs were discussed in a recent KPFK fm Los Angeles interview with broadcaster Cary Harrison – Multiple Sclerosis, PTSD and autism.
“Members of the Audacity team have developed evidence that an old anti-HIV drug can be extremely effective in treating multiple sclerosis,” she reveals, “but traditional biotech investors will reject this opportunity because it undermines the high profit $60B multiple sclerosis market by introducing an effective competitor that needs no market exclusivity (patents) and has lower cost to develop.”
A new class of investors
“Funding for drug research and development just described has to come with an expectation of a more modest return,” Barbara says. “Think of it as ‘I want to put a part of my 401K into, umm, bonds and I am going to make a nice return over a long period of time.’”
To facilitate and hasten the day when that sort of investor can make that sort of informed decision, Dr. Handelin and her team are forming a Commission on Financing a Public Benefit Biotech Industry (CFPBBI) to meet over the next several months to produce that blueprint.
Out of this will come a critically needed investment model which rewards the heart as much as the wallet – and not a moment too soon.