According to CNBC, Goldman Sachs is asking: ‘Is curing patients a sustainable business model?’ in a report titled “The Genome Revolution” released on April 10. I have been unable to locate the report, but the news is all over the place, and the question is all but unavoidable:
The potential to deliver “one shot cures” is one of the most attractive aspects of gene therapy, genetically engineered cell therapy, and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies… While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.
The answer may be “no,” and it should come as no surprise. We know that markets fail from time to time, and health might be particularly prone to market failures (e.g. orphan diseases). So, if you are one of those who believe progress is a cure for all, you should think twice. The problem is not technological progress, the problem as always is faith, in this case, a blind faith in economic incentives.
So let me dig deeper and ask: “Is the business model a sustainable model for a truly advanced society?” What if markets and economic incentives are but a toy model for solving simple problems and we’ve got obsessed with using our toy model as a cure for all? What if the invisible hand can go only so far?
In the language of complexity theory, how well an economy works is an emergent property of the interactions of the people making it up: it is something about the whole that cannot be inferred from the parts, or at least not by adding up the parts, or by any other simple rule.
In other words, in complex social systems incentives can work in perverse ways…
What economics has missed is that adding an incentive — a fine or a bonus — may be subtracting something else, the individual’s sense of responsibility, or obligation, or intrinsic pleasure.
In fact, they are working in perverse ways, and we need something else. We need to create a culture around technology as Jaron Lanier persuasively explained this week. (While Mark Zuckerberg testified before the US Congress to explain Facebook’s broken business model):
I don’t believe our species can survive unless we fix this. We cannot have a society in which, if two people wish to communicate, the only way that can happen is if it’s financed by a third person who wishes to manipulate them.
Doing nothing and sitting comfortably in the armchair of blind faith in good old (business) models is tempting, but sooner or later, blind faith always end up dragging us down the drain.
I am not advocating for naïve non-market solutions. I only want to stress that the markets we need to produce our intended outcomes cannot be taken for granted. To begin with, we would need to agree on what “our intended outcomes” are, and there is no proper market for that.