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Goldman Sachs asks in biotech Report: Is curing patients a sustainable business? (2018)

(www.cnbc.com)
249 points randycupertino | 15 comments | 16 Nov 25 23:01 UTC | HN request time: 0.001s | source | bottom
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stego-tech ◴[17 Nov 25 00:03 UTC] No.45949690[source]▶
I feel kinda bad for the writer, because it's a good question: no, curing patients is not a good business model, just like public transit is not a good business model.

What a lot of folks neglect are N+1-order effects, because those are harder to quantify and fail to reach the predetermined decision some executive or board or shareholder has already made. Is curing patients a bad business model? Sure, for the biotech company it is, but those cured patients are far more likely to go on living longer, healthier lives, and in turn contribute additional value to society - which will impact others in ways that may also create additional value. That doesn't even get into the jobs and value created through the R&D process, testing, manufacturing, logistics of delivery, ongoing monitoring, etc. As long as the value created is more than the cost of the treatment, then it's a net-gain for the economy even if it's a net loss for that singular business.

If all you're judging is the first-order impacts on a single business, you're missing the forest for the trees.

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1. socalgal2 ◴[17 Nov 25 02:01 UTC] No.45950250[source]▶
> ~public~ transit is not a good business model.

~public~ transit can be a good business model if it's setup correctly. The majority of Japan's 100 train companies are setup such that they own both trains and complementary interests. Office buildings, shopping centers, super markets, apartments. The better their trains are the better their other businesses do by delivering people to them. The better their other businesses are the more people want to use their trains.

https://ir.tokyu.co.jp/ja/ir/news/auto_20251111595684/pdfFil...

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2. appreciatorBus ◴[17 Nov 25 02:12 UTC] No.45950290[source]▶
Yup. North American public transit is frequently a terrible business model because North American land use is designed to push everyone’s daily destinations further and further apart, making all transportation more expensive, and making transit uncompetitive with anything else.
3. Ferret7446 ◴[17 Nov 25 02:19 UTC] No.45950324[source]▶
While public transit is a good business model, corrupt public transit is an even better business model. The amount of public funds that some US public transit funnels away is astounding.
4. ehnto ◴[17 Nov 25 02:27 UTC] No.45950357[source]▶
It's fair to note that Japan's private rail networks have often been joint public/private investments, but I don't think that negates your point.

I think public transit is something the public should invest in, profitable or not, as a service to ourselves (the public). But it can also be done profitably in certain circumstances.

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5. CGMthrowaway ◴[17 Nov 25 02:56 UTC] No.45950479[source]▶
This reminds me of the way ski resorts work in the US. One company builds the ski resort (losing) but also develops all the real estate around it (winning). It only works if it's a resort worth living near.

Or casinos, which are the reverse. Build hotels, entertainment etc (losing) to support traffic to your casino (winning)

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6. beeflet ◴[17 Nov 25 03:35 UTC] No.45950648[source]▶
Rail was a dominant industry in the USA when railroad companies were able to exploit their unique control over property during westward expansion.
7. OneMorePerson ◴[17 Nov 25 04:09 UTC] No.45950788[source]▶
I think you and the person you are responding to are saying the same thing?

I don't think they literally meant public transit can't be profitable in any scenario, they meant that it takes a conscious choice to put money into transit with the intention of reaching some second benefit, which is a pretty good comparison to this topic too.

The public transit by itself is a money loser compared to alternatives, but by having it in place you get other benefits that make it worth it overall.

8. socalgal2 ◴[17 Nov 25 05:38 UTC] No.45951086[source]▶
I think trying to get the incentives right is important and that "public" transit rarely gets it right. It relies on politicians to fund it and they have so many strings being pulled on that they can rarely give it the funding it needs. It will always show up as an expense and as such there will always be an incentive to cut funding to "lower the expense". If they ever have a surplus it will be syphoned off to something else instead of invested.

Of course many cities have great "public" (run by the government) transportation for some definition of "great" but many have issues of funding. IIUC, NYC and London are both seriously underfunded. Conversely, AFAICT, these private Japanese trains in a city of a comparible size are not. If you don't want to compare to Tokyo, then compare to Osaka

https://www.keihan.co.jp/corporate/ir/individual/

https://www.hankyu-hanshin.co.jp/docs/integratedreport2025_j...

9. sam_lowry_ ◴[17 Nov 25 07:51 UTC] No.45951638[source]▶
Why company? In France, ski resorts are often built by local authorities, not companies.
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10. stavros ◴[17 Nov 25 08:23 UTC] No.45951776{3}[source]▶
That's just not the sort of thing the US believes in.
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11. netsharc ◴[17 Nov 25 13:09 UTC] No.45953248[source]▶
Won't real estate near ski resorts become hotels? Or does the word "resort" mean there are on-site hotels?
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12. CGMthrowaway ◴[17 Nov 25 14:26 UTC] No.45953837{3}[source]▶
There are hotels but the real money for ski resorts is in the condos, timeshares and houses that are sold on the nearby land. When I said "ski resort" I mean lift-serviced terrain and all the supporting infrastructure for skiiers during the day
13. CGMthrowaway ◴[17 Nov 25 14:35 UTC] No.45953925{4}[source]▶
Yes very different in the US - good overview here https://www.instagram.com/reel/DQpuf_9CQz7/
14. xboxnolifes ◴[17 Nov 25 15:35 UTC] No.45954481[source]▶
You're both kind of arguing the same thing. If the transit companies also own the places the people are traveling to, they are capturing the value of second order effects.
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15. xnx ◴[17 Nov 25 17:46 UTC] No.45955966[source]▶
Eh, without that alignment of interests public transit agencies in the US only care about increasing their budgets. They are at best indifferent if the service is safe, fast, convenient, clean, efficient, etc.