iHealth Care: Precision Medicine
Some remember their college years by the number of parties or trips abroad. I recall my college years by the number of cancer surgeries I shadowed. One episode has the most substantial memory footprint. It has changed how I think about my work and impact. That is the vision of a patient, maybe my father’s age, who I got acquainted with while waiting for his surgery room to become available. He did not have family around. His health had been stolen by advanced diabetes. And soon, his freedom to walk. When the nurse gestured to us that it’s time, the patient teared up and reached out for my hand and some encouragement. In those 15 minutes we spent together, I became his adopted family.
How Did We Get Here
By all standards, our civilization is an impressive one. We invented our way out of many problems, some externally induced (pandemics), other self-inflicted (political conflicts). The moment we are faced with a problem that’s big enough, we take to solving it. We invented antibiotics and vaccines to get infectious diseases under control. We strived to discover ways for everyone to live wealthier, healthier, and longer. Major productivity boosts brought along by step-functions like the industrial revolution introduced positive economic returns … and lifestyle diseases. If the biggest health problem of past generations was dying from an infectious disease or war, our generation’s biggest problem is dying from lifestyle diseases or loneliness.
Death Report: Lifestyle Diseases
What causes lifestyle diseases? Please mark down all that apply to you: smoking, overuse of alcohol, poor diet, lack of physical activity, lack of sleep or socializing, inadequate relief of chronic stress. In the face of COVID-19 lockdowns, some of these risk factors are almost impossible to avoid.
We currently tend to our health by making a monthly purchase of health insurance. But health insurance does not ship with a monthly health boost. It’s basically emergency insurance against that surprise $629 x 1 Band-Aid bill. NPR did a fantastic deep dive into why bills like the ones you receive in the ER cost so much, even with health insurance.
Lifestyle diseases can be traced back to a lack of lifestyle balance and wellness practices. But the vanguards of our health do not have a process to reward or influence healthy habits. Insurance companies forget to factor in the impact of wellness on long-term health. In theory, the primary-care-physician should be the long-term steward of your health and coach you during your life. In practice, the healthcare industry is optimized for disease management and less so for disease prevention.
When your health needs fixing, you have three options: services, subscriptions, or a bundle of the two. Healthcare is a services industry as health professionals triage patients towards some interventional service on the menu. While the healthcare industry focuses on service delivery, pharma is the crown jewel of the subscription model. We’re talking about a subscription model fit for the Olympics of Silicon Valley. The US pharma industry increased by $100B in the last decade, reaching $359B in prescription drug revenues in 2020.
Drugs cannot fix your health because they disrupt the body's ability to self regulate. So they fix something left and cause more harm right. You're off one drug and soon have to sign up for another one in an Ouroboros cycle of pills.
A History of the Pill Economy
The industrial revolution was an inflection point for the pharma industry. Before, we had small, low-tech apothecaries and a service industry. The apothecary business model dominated the landscape for ~600 years. Economies of scale were impossible and pharma science made slow progress. The industrial revolution enabled the emerging of research-based drug companies and subscription business models.
The apothecary business model mutated into retailers of packaged medication, commonly known as distributors or pharmacies. The distributors no longer play a significant part in the invention and manufacturing of medicines. However, they are hyper-effective at circulating a total of 4.5 trillion doses of medicine in 2020 alone. The latest estimates project that global spend for medicine in 2020 will reach $1.4T - expect even higher numbers due to the ongoing COVID-19 pandemic.
Pharma science took an interesting spin in the past few decades. In the late 20th century, biotechnology emerged as a field that explored cellular and biomolecular processes. It then translated the learnings into technologies and products that improve our lives. Innovative cell and gene therapy are ready to revolutionize treatment in oncology and autoimmune areas. The FDA expects 10–20 cell and gene therapy products will be approved per year by 2025.
Precision Medicine as The Future
The challenge of today’s healthcare industry is that it performs analog interventions on digital systems. Our bodies consist of dynamic and interconnected pathways that influence each other. When doctors prescribe medications, they reference a standard therapy that worked at a point in time for people with similar symptoms and traits. In the drug development lifecycle, we have limited ability to capture a drug’s impact on the body over time. We capture two things when testing drugs: did the drug alleviate the underlying problem and were there significant side effects? Even drugs that are super focused on binding to a single molecule in the body could influence adjacent systems. That goes to say that a therapy that passed clinical trials might cause unwanted long-term side-effects when prescribed to a new patient. Medication might have an excellent initial landing in the body, yet it expands its footprint over time. We fail to scientifically track the expanding phase.
However, driving forces are rallying behind precision drugs and digital health. Precision therapy can minimize the biological area of impact and enable high-fidelity results across individuals. Remote monitoring can give us a glimpse into the drug effectiveness and enable dynamic dosage calibration during treatment. Another interesting fact is that drug development has become more accessible to small players who can stay focused on bringing a small portfolio of highly-specialized drugs to the market. 1 out of every 2 companies that go public is either a healthcare or life sciences company. More market players means higher market fragmentation, which leads to drug specialization. It’s a great thing for the patient.
What I Think Will Happen
We live in a fascinating time where our ability to cure diseases is getting scarily powerful. However, the body has its natural elasticity. No disease will pass unnoticed even when “perfectly” cured. Could we also get better at preventing illnesses and maybe even revert aging?
The unit economics of health insurance could hold the answer. Health insurance in the US is commonly employer-sponsored. This means the employer has more of a reason to make sure you, the employee, stay healthy. Healthy employees = low monthly premiums. The average cost of employer-sponsored health insurance was $7,188 for single coverage. Let’s assume you are a healthy individual and could swap health insurance for wellness benefits. The monthly health insurance fees would buy you access to Equinox ($2,200), Calm for Life ($399.99), and weekly Thistle dinners ($4,680) for the year.
Pre COVID-19, companies could entice employees with on-site gyms and massage chairs. In the new normal, on-site wellness is not a menu option. Stay tuned for a future blog post where I’ll take employer-sponsored wellness benefits through the business school whirl.
