Partnering with Commercial Enterprises: Roadblock to a Cure?
Happy Monday! Last week was a very exciting week at the ADA conference in Philadelphia. If you are interested in learning more, I suggest taking a look at some of the recent posts at Diabetes Mine. They did a great job of recapping the conference and sharing updates.
While the JDCA did not attend, I kept up to date through blogs and press releases. Although there was some exciting news about diabetes gadgets and treatments, there was little to no cure news.
Why is this?
As we discussed in last week’s blog post, Practical Cure research is only a very small portion of research grants by the non-profits. Without funding, cure research cannot progress, and hence won’t make news.
In addition, the ADA conference highlighted the prevalence of commercial enterprise in diabetes research and the diabetes market. The JDCA believes a contributing factor to the lack of type 1 cure research is the myth that non-profits partnering with commercial enterprise will accelerate the development of a cure. We believe this partnership is unlikely to succeed in accelerating cure development because of inherent conflicts of interest and priorities. Commercial Enterprises have a primary responsibility to their shareholders, or the people who invest in the company. First and foremost commercial enterprises aim to maximize returns for those investors.
As the number of type 1 (and type 2 diabetics) grows, the market for treatment products becomes even more profitable and attracts numerous commercial enterprises. Competition to design the latest and most innovative product to improve type 1 diabetes management is a major incentive for commercial enterprises to increase their revenues.
The commercial enterprise model is more appropriate for the treatment products market than cure research and development, which was illustrated by the abundance of new and innovative products at the ADA Expo.
Commercial enterprises involved with treatments are discouraged from developing a cure because a cure would reduce the need for treatment products and inevitably shrink their profit opportunity. Industry has substantial resources and a financial incentive to focus on enhancing treatment technologies. The development of a cure would inevitably shrink the recurring revenue and profit opportunity of an established multi-billion dollar commercial market for treatment/management products.
As a result of this analysis, the JDCA believes that the more limited resources of the non-profits are best directed toward Practical Cure research. The non-profit model can accelerate the development of a Practical Cure by focusing on projects aimed at a type 1 diabetes cure and giving their shareholders (or donors) returns in the form of measurable scientific progress toward a cure. We believe that donors who contribute for a cure are motivated by the goal of delivering that result for themselves and their family members regardless of any opportunity for monetary gain.
For a more in-depth analysis of the relationship between Commercial Enterprise and Non-Profits, please read our report “Partnering with Commercial Enterprise”.
If you have any questions or cure discussions, please engage us here on our blog, Facebook, or email us at email@example.com