What's So Hard to Understand?—No Profits Means No Medicines


No medical miracles today

Yesterday, the biotech company Geron announced that it was halting its stem cell research and stopping its Phase 1 trial in which stem cells were used to treat broken spinal cords. It was a business decision based on the company's evaluation of the commercial prospects of the treatment. One comment particularly struck me in the Washington Post's reporting on the company's announcement:

"I'm disgusted. It makes me sick," said Daniel Heumann, who is on the board of the Christopher and Dana Reeve Foundation. "To get people's hopes up and then do this for financial reasons is despicable. They're treating us like lab rats."

WTF! First, Geron's announcement is a disappointment to be sure, but just how does Mr. Heumann expect a company to continue to operate if it runs out of money? Does he think a bankrupt company will be able to provide treatments? And, of course, the participants in the Phase 1 treatment trial are treated like lab rats because that's what they are. In Phase 1 trials:

Researchers test a new drug or treatment in a small group of people for the first time to evaluate its safety, determine a safe dosage range, and identify side effects.

There's nothing about benefit to the patient in a Phase 1 trial. If a patient happens to benefit, then that's just great. Whatever one might say about government funding of biomedical research, the plain fact is that the National Institutes of Health has never brought a treatment to market. Profit-making companies do that. 

Disclosure: I am a long time small investor in Geron stocks and I certainly will not be retiring soon (if ever) off any capital gains from it


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  1. Yeah! I’m with Mr. Heumann! How blatant is this?!

    Teh Evul Kochporashunsz putting PROFIT ahead of PEOPLE! God, they put it right out there and SAID IT! YOU SUCK, KOCHPORASHUN! Zuchinni Park forever!

    #OWS #Derp

  2. Maybe they just came to the conclusion that embryonic stem cell research is a total failure.

    If such research wasn’t used as a stalking horse for abortion rights it probably would’ve been halted long ago.

    1. Count me as one among at least a few who thinks stem cell therapies are going to be one of the biggest busts recent medical research.

      1. In the long term they will probably be one of the greatest benefits to mankind, but whether it will be 5 years or 25 years before they figure out how to best use them is unclear.

        1. I’m putting that in the same folder as “Fusion Power is only a decade away.”

    2. Just because you’re against it on principle doesn’t mean it’s scientifically invalid. The reasons for opposing embryonic stem cell research may be the same reasons for opposing abortion. But the reasons for performing embryonic stem cell research have nothing to do with abortion.

  3. “I’m disgusted. It makes me sick,” said Daniel Heumann, who is on the board of the Christopher and Dana Reeve Foundation. “To get people’s hopes up and then do this for financial reasons is despicable.”

    That shit is straight out of Atlas Shrugged. Someone holding a gun to your head shouting, “Think for me!”

    1. If Danny feels so strongly about it, why not get investors to privately fund the research?

      Or would that make too much sense?

  4. I empathize. Every time our biotech company (which is doing public health stuff for NIH) gets publicity, the reaction is the same- “Why are they charging for this stuff? They’re just doing it for money! How can you trust them?” Apparently, if you’re trying to cure or prevent human suffering, you’re not supposed to worry about things like shelter and food for yourself.

    1. Health care is a RIGHT!

      1. The founder of our company was being interviewed by one of the usual suspects in the left wing press. Now here’s a guy, 70 years old, who sunk his entire life savings into developing our technology and, no shit, the reporter asks him, “If this is so critical to the health of children, why are you charging anyone for it?” Our founder is a lefty himself (a regular commenter on HuffPo) so it was fun to see him get the cognitive dissonance face.

    2. + 10 to Old Man with Candy

      That’s why I switched from biomedical to ecology and evolution when it was time for graduate school. Sure, it means not curing any diseases, but all those deaths from uncured diseases are no skin off my teeth.

    3. I’m in vet school now and I hear the same thing all the time about veterinarians.

      1. My dad was a vet. He gave up large animal practice in 1960 and was one of the first in Western Canada to specialize in small animals.

        His reason was that farmers would first try the home remedies they learned from their fathers, then any quack remedy their neighbors suggested. Only when those failed – and the poor animal was nearly dead – would they call the vet. Then, of course, it was the vet’s fault that the animal died.

        It was bad enough trying to get farmers to pay if the animal survived. It was damn near impossible if the animal died.

  5. Seems the foundation had a pretty decent year last year. Too bad they didn’t offer some of that cash to Geron to continue working the project.

    1. That money had to go pay…someone. And to build a monument or public playground or memorial or some shit.

  6. Having been involved in clinical trials for multiple drugs, including one going on right now: Trials cost an absurd amount of money. First spending money on all the preclinical testing you have to do before filing an IND (Investigational New Drug Application) with the FDA. Then the costs of Phase I tests. Then (likely) multiple Phase II tests. Then the Phase III test(s). You’re not only paying for the drug to be manufactured, you’re paying for the sites, you’re paying for the investigators, you’re paying for medical testing/treatment on the subjects. It’s years, sometimes decades, between coming up with a compound and going to market. Plus with all of that, it’s a race to get everything done with enough time left on your patent.

    So… yeah. Money’s got to be a part of it. It’s absurd to think otherwise.

    1. Trials cost an absurd amount of money.


      1. Realistically, you are going to have to spend a huge amount of money to ensure your drug is safe – whether or not there is an FDA approval process.

        The issues are
        1). Does the FDA process add to the cost?
        2). Does the FDA process delay (or prevent) the development of needed drugs more than a prudent system of testing would require?
        3). Does the FDA process reduce the risks of bad side effects more than a corporate system would?
        4). Does the existence of the FDA prevent the distribution of quack drugs?

        And, arising from 2) and 3) and 4):

        5) Assuming the answers to 2), 3) & 4) are 2) Yes 3) Yes and 4) Yes, do more people suffer ill effects due to 2) than suffer ill effects due to 3) & 4).

        My take on the answers is:
        1) Almost certainly
        2) Probably
        3) Marginally but not clearly
        4) Maybe – but there are still quack remedies out there.
        5) My guess is that more people suffer or die from lack of new drugs than are saved from injury or death due to the FDA. But there is no ethical way to run a “double blind” testing system.

        1. Edit:

          That last bit should read:

          “But there is no ethical way to run a “double blind” test of this theory.”

  7. “I’m disgusted. It makes me sick,” said Daniel Heumann, who is on the board of the Christopher and Dana Reeve Foundation. “To get people’s hopes up and then do this for financial reasons is despicable. They’re treating us like lab rats.”

    Is he talking about the Superman reboot?

  8. Coincidentally, I’m working my way through the “Free to Choose” episodes and last night I watched the “Who Protects Consumers” episode.

    There is a scene where some 40 volumes of documentation are being carted into a room, to join two other carts each also containing about 40 volumes, this representing the paperwork being submitted to the FDA for one new drug.

    Assuming that scene is at all accurate (and none of the government shills in the discussion following called it out; in fact, one doctor on the panel criticized Friedman for not being harsh enough on the FDA!), it’s an absolute fucking wonder that any new drugs are ever brought to market at all.

    1. I want to say that when my wife’s old company submitted the paper copies of everything for FDA approval, it was literally a truckload of paper. A full 18 wheeler of documentation.

      Of course, they had also submitted everything electronically, but the regs require paper, so paper was submitted.

      1. Well, “Free to Choose” was filmed in 1980, so I can only imagine in the intervening 30 years the regs have gone into plaid.

    2. I interned with a pharmaceutical company. I never dealt with new drugs, but for a single lot of manufactured drug there was thousands of pages of documentation.

  9. I recall telling Ron Bailey to let go of his gereon stock. did he listen? No.

    1. even better: I told him to SHORT it. He’d have made a killing.


  10. We don’t need the profit motive to solve problems: the Obama government has solved the problems we called Osama Bin Laden and Moamar Qaddafi, and the FDR government solved the problems of Hitler and Hirohito. If we all work together for the public good under the leadership of a good leader we can solve any problem, including AIDS, Alzheimer’s, breast cancer, etc.

    1. ++!! , but you forgot Teh drugz!

  11. If they think it is hard to persuade biotech companies to do this for [teh evil] profit motive, wait until they try to get a research grant approved by the Department of Health.

  12. better linky to illustrate Ron’s geron stock loss:


    Also, now we know Bailey likes his apple products.

  13. Disclosure: I am a long time small investor in Geron stocks and I certainly will not be retiring soon (if ever) off any capital gains from it.


    You need to follow the same rules as Congress:
    1) Declare that it SHOULD have made a huge profit.
    2) Deem the lack of said profit as a “hidden benefit”.
    3) Claim the unrealized “hidden benefit” as an offset on your income tax return.
    4) Collect the huge refund to which you are entitled and retire on that.

  14. Disclosure: I am a long time small investor in Geron stocks and I certainly will not be retiring soon (if ever) off any capital gains from it.

    Ron, you need to do this the way Congress does:

    1) Claim that your investment SHOULD have made a huge profit.
    2) Claim that the unrealized profit is a “hidden benefit.”
    3) Claim the unrealized “hidden benefit” as a loss on your income tax return.
    4) Collect a huge refund and retire on that, all the while complaining on how much you gave up in benefits.

    1. Damn server squirrels.

  15. Just a quick note-Phase 1 trials aren’t even conducted on people suffering from whatever malady the treatment is aimed at. The only purpose of Phase 1 trials is to determine the safety and pharmacodynamics of a given treatment.

    Full Disclosure-I used to work in the clinical section of a large Phase-1 drug trial company.

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