July 23rd, 2009
05:28 AM GMT
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If you want to make money in the pharmaceutical industry, you must be looking for the next Viagra. Or the next Prozac. Or the next Botox.

In short, if you want to extend the financial life of your pharmaceutical company, you focus on extending the quality of life for potential consumers – not necessarily the duration. Chronic ailments are rainmakers – acute illnesses such as Swine Flu, or H1N1, typically are flashes in the pan and not worth the R&D expense, researchers say.

“There haven’t been that many new drugs out there for acute diseases,” Dr. Robert C. Liddington, director of the infectious disease department at the Burnham Institute for Medical Research in California, told me shortly after H1N1 broke out.

“One reason for that is the poor business model – it’s hard to make money curing people,” he said. “But influenza is big enough and there is big enough market use.”

A big reason companies like GlaxoSmithKline and Roche can sell H1N1-related treatments is that governments are stepping in to create a market, said Joseph Giambrone, a professor at Auburn University in Auburn, Alabama.

“They don’t make a lot of money on vaccines … if they come out with an influenza vaccine and it mutates (into a resistant strain) that’s $100 million down the tube,” Giambrone said. “It’s not a cheap process.”

The way vaccines are made hasn’t changed dramatically in 40 years, and production time literally comes down to a chicken-and-egg question: Live cultures have to be harvested in eggs, which requires a whole lot of microbe-free chickens.

More promising – and faster – vaccine production methods and treatments are being researched. But until then, expect to hear more breakthroughs on depression or dermatology. Acute diseases? Sorry, no shareholder value there.

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Filed under: BusinessH1N1

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soundoff (9 Responses)
  1. John

    This a huge problem in healthcare. Ongoing treatment is much more profitable than curing a condition. For instance AIDs torments millions of people. There is no cure, but there are expensive treatments, which people need to take all of their lives. A cure would just give drug companies a one time fee. It's much more profitable to keep people coming back for something.

    I think that government needs to take a much more active role in funding the cures of illnesses. It's the only way around the profit model problem.

    July 23, 2009 at 8:10 am |
  2. Tony

    Well, with global warming, perhaps it's for the best that we keep our population in check.

    July 23, 2009 at 9:35 am |
  3. Pete Westerman

    I guess old news is better than "what's new". It hasn't changed in 40 years!

    July 23, 2009 at 9:58 am |
  4. Pedro J. Santiago

    I feel very bad when I read an article like this one, billions of money is what it is important for this giant drug producer, they survive in the market using people illness but at the end they don't care about the whole humanity helping developing a good vaccine drug for the Swine Flu or H1N1 because they don't made enought money for their Shareholder in quantity as a drug for Depresion or those drug as Xanax and more that made them such rich, people are dying right know in my Country for a lack of a good vaccine, two days ago a young pregnant lady die in my town, yesterday a close family relative so young (19) die in Ponce with Swine Flu, there is not reason or money to let this human being to die without help from the giant pharmaceutical around world that need us to keep those shareholder putting million off money to keep them alive in the market, it is a shame and the government in different countries are doing nothing, theses people are not animal, they are humans, you don't do nothing presenting a politician in television telling the people too wash their hands , it this the new world we are living, what a shame for us around the world that are suffering this pandemic desease without help from the big pharmaceutical and the whole govenment-they just talk about how many die yerterday and how many get the H!N!, the private hospital are doing nothing too because they run those facility as a business, they dont want to scare the people looking for service at their facilities, it is happening in Puerto Rico–Oh Money, Money, that is the important word, again, what a shame.

    July 23, 2009 at 11:53 am |
  5. Matthew Roberts

    This is an example of the limitations of relying on free markets to create common good. Market forces favor business models that make money, which is great for drugmakers developing lifestyle and chronic illness solutions. Its a shame that -acute diseases along with the inherent misery of getting the disease and potentially dying from them are not attractive to shareholders of large companies. These examples call for a new form of public/private partnership model.

    July 23, 2009 at 7:12 pm |
  6. Eliu Goncalves

    We´ve been living in an era of great technological evolution, but no spiritual evolution!

    July 24, 2009 at 1:42 am |
  7. Richard Carrier

    The problem stated is that saving lives is a bad business model for a free market society in which the company's lifestyle is effected only on how much money they make. Well this world has not developed to the point of letting go of such things as a monetary system (with it greed, and injustice).Tell a man who has bills under a monetary system that he no longer has bills to worry about and that his services are provided with the understanding that other services are provided to him for his and his own for the services.But to say provide free services to those in need well that is not what drives people these days if it did we wouldnt need money.People talk about the drug company's well its not just them that dont focus their efforts toward the poor and deprived its most of us.Im certainly not out volunteering to help the sick, and poor in my neighborhood.So maybe instead of reading articles like this and doing nothing people should go out and do something about the actual problems.

    July 25, 2009 at 5:17 pm |
  8. Jack

    Since a curing a patient means losing a customer, the phamaceutical industry is not motivated to develop drugs that cure any illness. Why create a drug to cure high blood pressure in a few months, when you can develop one that just alleviates symptoms and must be taken for the rest of the patient's life? What's the solution? When corporations demonstrate an inability to act in the public interest, government intervention is the only answer. A government-owned pharmaceutical company is probably not the solution, but creating financial incentives to develop drugs that cure rather than treat symptoms might be.

    July 27, 2009 at 1:31 am |
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    October 6, 2011 at 11:57 pm |

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