Monday, March 16, 2009

Where's Cancer's X-prize?

What's wrong with the drug companies?

The answer is really simple.

They're getting paid for doing the wrong thing.

The “free market” system gives the best rewards for creating drugs that only treat, not cure patients. The logic is simple. Why make a cure that you only sell once, when you can sell a treatment for the rest of your patients' lives. The really big money is in keeping people sick.

With a totally “free market” system, we can't fix this. Its just a flaw of the “free market” that a company's best customers are like addicts. It is just a flaw of the “free market” that the ultimate goal of maximizing profits leads to making your customers as desperate as addicts. Its just a flaw of the “free market” that leads the drug companies to wish to manipulate and deregulate the U.S. regulatory system until its difficult to tell the difference between the legitimate drug industry and the street corner pusher.

Even free markets need some regulations. Even free markets need some direction. In a free country, is it legal to steal? Of course not. Without some conscious purpose, a free market is just corporate anarchy.

But we can fix this. We can pay the drug companies to come up with cures. This is sort of like the “free market,” but with a purpose and a conscience.

We could set up the equivalent of an “X-prize” for diseases. (You may recall the X-prize is essentially a reward for accomplishing something groundbreaking.) Wouldn't it be great if we could give a reward for curing cancer? How about a really big reward that would entice even the biggest corporations?

I'll bet we've spent billions during the war on cancer over the past decades. And we'll keep spending more if we don't find a cure.

What if we set up a prize for a treatment that rids us of at least 98% of all cancers. The treatment would have to be non-invasive and have few side effects. It would also have to be relatively inexpensive. In other words, we would pay good money for a practical cure for cancer.

Where would we get the money for this huge prize? Where is the money now? Right now the money is being drained from our savings accounts and insurance companies. That's right, the drug companies have lots of our money from the “treatments” they charge us (and often overcharge us) for.

Why not set up a tax on drug “treatments” that don't cure us? We would have to set things up so that the drug companies, not the consumers, would actually pay this tax. And to limit price gouging, the tax could be much higher for price increases greater than inflation.

Even a 1% tax would really add up over the years. If there had been a 1% tax on drug treatments for cancer for the past 50 years, the reward would now be astronomical! Every company, lab, and university on the planet would be scrambling for the prize.

In fact, I suspect that if we had offered a huge “X-prize” for curing cancer, we might already have a cure by now.

What would something like this X-prize take? Unfortunately, it might take the restructuring of our government. So much drug money influences our politicians now that doing the right thing is an uphill battle... But, we could get the drug companies on our side if Government funding were to match the contribution they provide. This would double the size of the prize – and bring new money into the health care system. I'd bet the drug companies would go for new profit opportunities.

Of course most importantly, in the long run, if we can find cures to the major illnesses that plague us; we will save far more money (and lives) than with our present system.

Isn't a cure worth paying for?

Maybe we just don't understand how to direct a “free” market.


Anonymous said...

It's not specific to cancer, but there you go.

Rick Spilsbury said...

Thanks. I guess it was a good idea after all.

Anonymous said...

It is commonly thought that the nearly-40-year “war on cancer” has largely been a failure, since the age-adjusted mortality rate for cancer is essentially unchanged over that time. Albert Einstein said that insanity was doing the same thing over and over again and expecting different results. The current system of using patent monopolies just encourages gaming of the system by pharmaceutical companies (e.g. look up evergreening of pharmaceutical patents). This is because patented drugs don’t need to be effective, they just need to be ‘non-obvious’ and have ‘industrial utility’.

Theres no logical reason why we shouldn’t try a cancer prize funded by private/public partnership or adapt the patent system to create a prize fund for effective drugs. So much money is already wasted by the taxpayer on cancer treatments (in the US about $100billion per annum) and many of those treatments only increase lifespan by a few months or years – we need to set up a prize with solid criteria to pay out for a “cure” (e.g. 5 years cancer fee, if relapse after x years have to forfeit $x).

Ideally, all governments should fund the prize or maybe the US can fund and ‘sell’ the cure to other countries, which might recoup the cost to the taxpayer. If the US could afford a trillion dollar bail out to the banks they can afford a $200 billion or so prize fund for curing cancer. This should have more political support because a third of the US population will get cancer and a quarter of those people will spend most or all their life savings to pay for treatment (see If there’s currently no economic incentive to use healthcare resources wisely to maximize social benefits and minimize social costs, a rational population would want their government to create those incentives. At the moment we have pharmaceutical companies spending obscene amounts just to market their patented drugs as slightly more effective than the other pharmaceutical company’s slightly effective drug. From the patient’s perspective, I’m sure they would prefer if they just spent that money on researching a cure. Unfortunately, there is currently no real economic incentive for doing so, therefore, society should create that incentive. Society needs incentives to act. Why did we fly to the moon, why did we develop nuclear weapons? The greater the reward for society (and risk of failure), the bigger the incentive should be.