The Business Model of Cancer Drugs

Fiction writers and Hollywood love to paint a story of the cure for cancer being locked up in a vault in Switzerland by evil corporate henchmen. First, a cure would be patentable, and so it would be worth billions to whoever owned the patent. The idea that a for-profit firm would refuse to sell a profitable product is pure fiction. Cancer kills one out of five people, including Pharmaceutical CEOs and FDA Scientists. If there was a proven cure out there, we would all know about it.

Instead of a conspiracy to prevent a cure, what we have are a set of systems that work to prevent promising treatments from being tested. This is not intentional, but is the result of financial and regulatory decisions by business and government agencies. Take the FDA, for example. This agency is mostly staffed by smart, hard-working people making a lot less than their industry counterparts. They would love to see improved treatments, after all, their kids and their neighbor’s kids get leukemia, too.

Unfortunately, if you have a brand-new therapy for cancer, FDA makes you try it on the sickest patients, who have already failed previous, approved treatments. We know from animal tests that if we could intervene earlier in the disease process, we would get better outcomes. Testing a new treatment on the sickest patients is like pouring a new brand of racing fuel in a 1975 Chevy Vega and expecting it to win the Indy 500.

Another myth is the Company Research Department. While there are many excellent researchers in private firms, these are businesses with an obligation to make money for their shareholders. There is nothing wrong with this setup, but there are two main problems at work here, First, there are lots of dead ends in drug discovery, to the smart companies have learned to feed higher off the food chain. This involves letting academics do the bulk of the tedious screening process, (with Federal Grant Money), then, they can cherry-pick the most promising treatments, fund the remaining research steps, and patent the drug. Another way is to take an already-approved drug and modify it to either extend the patent or make a new patent on it entirely. There is a joke around the Bay Area about a BioTech giant that they “hire more lawyers than doctors”.

So, now you have a new therapy with real potential, but it doesn’t fit the business model gold standard of a pill or liquid. Remember that single-action pills work well for simple diseases by fixing one machine in the factory, but we’re trying to fix the whole factory. So, if your new drug is a pill, it fits the companies’ business model (hooray!), but its simple action means that it’s usually a matter of time before the cancer cells mutate and are no longer vulnerable to the drug. It’s like hitting mosquitoes with DDT, the first time, you kill 99.99%, but the few resistant ones multiply, and pass on their genes, and now the whole population is resistant. This is why cancer drugs often work well for a few months, than lose their effectiveness.

You probably think an effective drug is one that will cure a majority of patients who take it. However, to a drug company, an effective cancer drug is one that works well enough to get FDA approval, and can be sold for a high profit margin. That’s why you see drugs that cost $10,000/month which add a few months of average survival to the patients who take them. There is nothing evil in this system, it’s just business. Pharmaceutical companies know how difficult it is to cure cancer, so they figure a poor, but profitable, solution is better than no solution at all.