Pharma’s investment in boosting profits more than health

By | August 8, 2018

Clayton Dalton writes:

Just a few years ago, infection with the hepatitis C virus guaranteed a slow and certain death for many. Available treatments were effective in about half of all patients, and the side effects could be awful. Things changed in 2014, when a new medication called Harvoni was approved to treat the infection. With cure rates approaching 99 per cent and far fewer side effects, the medication became an instant blockbuster. Sales topped $13.8 billion in 2015.

But then an odd thing happened – sales began to drop precipitously. Harvoni, in conjunction with four other hepatitis C drugs, is projected to generate only $4 billion this year, a three-fold decline in as many years. Part of this decline is due to new competitors entering the market. But according to analysts at Goldman Sachs, another reason could be that the drug’s cure-rate erodes its own market.

In a private report leaked to news outlets in April 2018, the Goldman Sachs analysts caution against investments in pharmaceutical or biotechnology companies aiming to develop outright cures, and cite Harvoni as a case study. It’s a simple point to make – if profit is your goal, then a product that eradicates its own demand might not be a wise investment. [Continue reading…]

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