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 info@thejdca.org
-Cara
First, thanks for the shout-outs on the updates we had from the ADA Sessions. I’ll disagree on the point about non-profits partnering with profit companies. The non-profits can’t do it on their own, and neither can the companies. We have to work together, rather than just do things individually and be “racing” toward a cure. I also think it’s easy to be cynical and skeptical of these relationships, without looking at the very visible proof that companies have pure motives for being in the business. Yes, it’s a business tied to revenue and shareholders. But those I’ve met in the industry to care, and are personally impact by diabetes themselves or with family. We are correct in questioning whether what they’re doing is BEST, and could be done better. We should do that, as watch-dogs. And often, they are totally marketing-happy without saying anything worthwhile. But that’s the way it is. I personally think it’s short-sighted and totally off base to just say they’re “profit-driven” and that justifies a divide. Not at all. Anyhow, thanks for writing this.
Hi Mike! Thanks for your feedback. I think that DiabetesMine did a wonderful job with recapping the conferences and helping those of us who couldn’t go understand what was going on, so thank you again for that.
I am sure that many companies have good intentions and really want to make a difference in the lives of their consumers. However, they have legal obligations to their shareholders and must be profit driven, whereas the non-profits do not have these obligations and can be completely goal oriented.
The ADA conference was encouraging and it is evident that both the non-profits and the diabetes commercial enterprises are working toward progress. Here at the JDCA we want to see that progress toward a cure, but unfortunately most of that progress is toward treatment, managements, and complications (all worthy endeavors). Progress in these areas not only improves the lives of diabetics, but it also fuels the diabetes market. A diabetes cure will not fuel, but reduce, the market so there is inherently less incentive by the diabetes commercial enterprises (not because they are against a cure but because it is an attack on their self sustaining model). So why should they change their focus? As a business, it makes sense for them to pursue projects that will help their target audience while also ensuring their own financial success.
That being said, I am encouraged to see the progress presented at the ADA conference, but hope that next year a portion can be dedicated toward cure updates.
Thanks for that response. I think there was cure information there, sprinkled throughout everything presented and discussed. Maybe it wasn’t specifically dubbed “cure-related,” but it goes to that bigger goal and picture. Just one example that comes to mind is research studies focusing on how long-acting basal insulin could be used to slow the progression of Type 2. That has implications across the board, and may lead to some new studies on why that is and what could specifically happen when using this as a prevention. Maybe not full-blown understanding of what causes Type 1 or 2, but kind of a stop-gap prevention in the meantime. Anyhow, I think there were also many other things that – when the dots are connected – go directly to cure. Maybe not the “practical cure” as you’re envisioning, but I would see it as cure-focused… Thanks again for the discussion!
Hi Mike! Your discussion and feedback is wonderful- exactly the type of critical thinking that the JDCA believes is needed to help accelerate progress. So thank you for your continued thought and discussion with us.
Thanks!
Cara