Goldman Sachs Asks the Wrong Question
September 24, 2022
The short answer to Goldman Sachs’ question is, can curing patients be a sustainable business model? is no, or at least, not in the way that Goldman Sachs asks the question.
The long answer is more nuanced and complicated than an easy no, but it also ultimately doesn’t matter either way, because even if curing people was somehow sustainable as a business model, Goldman Sachs would still have been asking the wrong question.
Healthcare is already profitable
The question Goldman Sachs should be asking is whether or not curing patients will have a significant positive impact on society. We see examples every day in communities where chronic illnesses are most prevalent,
yet healthcare coverage and accessibility are limited. Instead of putting profit margins ahead of human dignity, we must expand access to care to all Americans, especially those who need it most. Patients and families deserve an America that cares.
We should treat healthcare like any other business in America. Businesses invest profits into growth, research and development, and expansion. That’s not a bad thing,
but we need to stop thinking of care as just another commodity because it’s not. Health care is about people — patients who have spent lifetime building families and communities and pursuing their dreams.
Now is the time for Congress to put an end to our broken system by working together to expand access to affordable, quality health care for all Americans.
The profit will increase as better drugs are developed
No company’s goal is to cure patients; rather, it is to find a drug that Goldman treats some aspect of their condition. However, many people suffering from chronic illnesses may not be able to afford any given treatment.
Those with more Goldman moderate, but still debilitating and life-altering conditions may only have insurance that covers one drug (either out of choice or necessity). The business of pharma rests on providing better and better drugs – not eradicating the disease.
There’s no reason not to cure patients
In his editorial Is curing patients a sustainable business model? Goldman’s global head of investment research, David Kostin, raises an important point: profitability in healthcare has been on a steady
decline. Yet his point is lost when he suggests that a system should be devised to ensure an adequate societal contribution for these innovators who are risking their capital.
There are many ways to offset any company’s bottom line and ensure appropriate compensation for innovators.
Yes, there are reasons not to. But they aren’t good enough.
Curing patients is sustainable and not only because it is the right thing to do. Economically, it would be an incredibly smart move.
The US healthcare system, one of the costliest in the world, could significantly reduce costs by lowering health care use, reducing disability levels, and improving patient quality of life. Patients who are cured live longer and healthier lives while they save time and money on health care.
They also have a more positive psychological outlook and report higher levels of well-being than those who were sick for long periods.
It’s not rocket science: curing patients is better for everyone involved from society to business to individuals. But does curing people make financial sense?
The alternatives are worse
Is curing patients a sustainable business model? Goldman Sachs asked in an April 2017 report entitled The Genome Revolution. The report itself offered no evidence that this was, in fact, a bad idea:
it’s just speculated. But asking such a question at all—and delivering it as soberly as possible—serves to legitimize what could easily become an emerging view among biotech investors:
That the best thing for society and their portfolios is to let people die when cures are developed and give themselves scarce resources to find treatments for less lucrative ailments. A few years ago this may have seemed unthinkable; today, it’s cause for concern.
Therefore, we must cure people
The idea that curing patients is not a sustainable business model is simply ludicrous. Not only will curing people be beneficial to society as a whole, but it will also have tangible benefits for companies and economies. Diseases are already expensive to treat– imagine how much worse it’ll be if we stop trying to cure patients!
When somebody receives treatment for their disease, they won’t have to visit the hospital every week for an IV or start missing work because of their illness.
It’ll be less expensive for society at large and create jobs where people are doing meaningful work and making an impact in their community. Curing patients is not just good from a social justice standpoint— it makes economic sense too!
Why bother curing people? Because it’s what people want.
What would people want to know from Goldman’s perspective? How much money could we make by curing patients? What can patients do for us in return? The answers, most likely, are lots and not much. If we’re doing this purely for profit, then no wonder they question if it’s sustainable.
But think about what Cures do for the individual and their family. They get a second chance at life! Instead of sitting around waiting to die, they are out living life and experiencing things that mean something to them. They have time again with loved ones who feared they were losing them forever.
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