Cure for Type 1 Diabetes Imminent after Harvard Stem-Cell Breakthrough Aayush Mittal Economics of Healthcare October 15, 2014

Cure for Type 1 Diabetes Imminent after Harvard Stem-Cell BreakthroughAayush MittalEconomics of HealthcareOctober 15, 2014

http://www.telegraph.co.uk/science/science-news/11151909/Cure-for-Type-1-diabetes-imminent-after-Harvard-stem-cell-breakthrough.html

What is Type 1 Diabetes?

• “Diabetes” is when your blood sugar level is too high• With Type 1 diabetes, your pancreas does NOT produce

insulin• Insulin is a hormone helps glucose get into the cells

• Without insulin, glucose remains in the blood high blood sugar level

• Those with Type 1 diabetes are often prescribed to take insulin for the rest of their life

History of theEconomics of Diabetes

• In the past, the economic considerations of diabetes have been involving both Type 1 AND Type 2 Diabetes

• These both are very different in their “pathologic condition and expression” (Tao & Taylor)

• Economic evaluations, such as Cost Benefit Analysis (CBA), deal with benefits based on an intervention

• However, diabetes can lead to other illnesses treatment of this other illness is not considered in the CBA of diabetes treatment

• We MUST consider indirect costs when dealing with policy decisions for diabetes

This is Type 1 AND Type 2

Monetary Impact of Diabetes

Based on a study done in 2007

•The people in the U.S. diagnosed reached 17.5 million

•Total estimated costs = $174 billion• $116 billion in excess medical expenditures + $58 billion in

reduced national productivity• Of this, $27 billion is for care directly treating diabetes• ONLY 15.5% OF DIABETES EXPENDITURE IS FOR CARE

DIRECTLY TREATING DIABETES

What Can This Cure Do For Society?

• “The burden of diabetes is imposed on all sectors of society – higher insurance premiums paid by employees and employers, reduced earnings through productivity loss, and reduced overall quality of life for people with diabetes and their families and friends.” – American Diabetes Association

• This cure theoretically wipes out Type 1 Diabetes from the map, relieving this burden society carries. This essentially decreases costs for employers, increases productivity, etc.• Type 1 diabetes is caused by a non-functional pancreas due to

loss of B-cells. This cure uses modern stem-cell research to stimulate the production of B-cells. With B-cells, the pancreas is functional, Type 1 Diabetes is no longer existent.

Effects on The Insulin Market

• Currently a $40 billion+ market

• Insulin market can be broken into 3 product classes: recombinant human insulin, fast-acting analogs, and slow-acting insulin analogs

• 20+ companies competing in the insulin industry. This accounts for a large amount of supply.

• Demand would decrease for Insulin with new technology

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Quantity

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Price

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Q*

P*

P

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What Do These Companies Do?

• As demand decreases, revenue would decrease for many firms

• Marginal cost would be too high for many

• Cause exits from the market

Hope for these Businesses and Jobs

• The main question left in this “Cure for Type 1 Diabetes” is whether or not these B cells will last.• Many cases of Type 1 diabetes are due to an auto-immune

disease

• These businesses can use their future research expenditure on auto-immune suppressing drugs• Helping many make use of this “cure” and still remaining

profitable as a company

Why not QUALYs?

• QUALY Quality Adjusted Life Years

• We cannot measure these for 2 reasons:1. Diabetes can cause many other medical complications. We

can measure how many years a patient went without a certain diabetic related disease. However, there are other diseases that may come into play, greatly reducing the quality of life.

2. We do not have a solution to the auto-immune issue to make this cure a current viable solution and one which we can measure QUALYs with.

Sources

• http://www.nlm.nih.gov/medlineplus/diabetestype1.html• http://www.telegraph.co.uk/science/science-news/11151909/Cure-for-Ty

pe-1-diabetes-imminent-after-Harvard-stem-cell-breakthrough.html

• https://www.clinicalkey.com/#!/content/playContent/1-s2.0-S0889852910000356?scrollTo=%23hl0000439

• http://www.ncbi.nlm.nih.gov/pubmed/20723816• http://www.sciencedirect.com/science/article/pii/S0889852910000356• https://www.clinicalkey.com/#!/content/playContent/1-s2.0-S088985291

0000356?scrollTo=%23hI0000538• http://care.diabetesjournals.org/content/31/3/596• www.cdc.gov/chronicdisease/resources/publications/aag/ddt.htm• http://www.reuters.com/article/2014/10/01/us-novo-nordisk-insulin-

idUSKCN0HQ41I20141001• http://www.thermalin.com/market.html• http://www.bbc.com/news/health-29566784