New technology’s new opportunities: Lifesaving and market

A recent report from Goldman Sachs questioned whether curing patients was a sustainable business model.

The report, which focused on biotech companies especially focused on gene therapy, argues that developing cures could be bad for business in the long run because it can reduce recurring revenues as less people require the treatment.

On the surface, it can feel like a cold stance to take. Shouldn’t the goal be to help save the lives of as many people as possible? What many people fail to remember though is that healthcare providers and biotech companies are businesses, operating to generate revenue and make a profit. Just like an IT firm or a cleaning company, they sell a service; the service they sell just happens to be one that can save people’s lives and greatly impact society.

Still, there is a responsibility to do good by the public. We all remember the backlash when certain pharmaceutical executives jacked up the price of a lifesaving drug to $750 per tablet, a price the vast majority of patients could not afford. Fortunately, it doesn’t have to be one way or the other. There is plenty of opportunity for hospitals, biotech companies, and the like to continue saving as many lives as possible, without having to debate over the bottom line.

Address Disorders with High Incidence. There are numerous disorders that affect large populations of people, but due to current treatments and gene therapy, the prospective population of new patients has shrunk down and minimized market opportunity. Yet, there are numerous disorders and diseases with high incidence rates that have not generally been disrupted at this time. Gastrointestinal tract disorders fall in to this category, as does spinal muscular atrophy.

One potential high incidence disorder with tremendous value is heart disease. In America, one in three women and one in four men die of heart disease each year. Globally, that number climbs to one in three. Due to the host of variables related to causes of heart disease – genetics, diet, exercise, other health factors – it is highly unlikely that there will ever be a genetic cure that fully eradicates heart disease.

There will, however, be a continued need for innovative treatments that can cure various ailments – valve replacements, weakened muscle tissue, heart failure, etc. The average cost of a valve replacement surgery in the U.S. is $164,238, not including the doctor fee, for a valve that might only last 10-15 years. Developing an innovative treatment – for example using 3D bioprinting – that could last longer would allow hospitals to charge a higher premium for the peace of mind of extended life.

Identify Large/Untapped Markets. There are still many medical markets that are untapped or lacking in innovation, that could be both saving more lives and generating more revenues. Consider the organ transplant market. Currently there are more than 114,000 people on the organ transplant list in the U.S. alone. Every 10 minutes someone new gets added. But every 20 minutes, someone on that list dies because a compatible organ could not be found for donation.

Due to the lack of supply and the growing demand, there is an almost incomprehensible market opportunity for new treatments, like biological components and transplantable organs. A single heart transplant costs about $500,000 in the U.S., and there are about 3,800 performed annually. This means almost $2 billion is generated from heart transplants in the U.S. alone; with heart disease unlikely to go away, this is a large and sustainable market ripe for innovation.

Curing people can be a sustainable business model. We just need to care enough to make it so.

By Steven Morris, CEO, BIOLIFE4D

© Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this content? View our policies by clicking here.

 

Featured Webinars

Featured Whitepapers