When a market changes, the market incumbents are the last to know. Not because they cannot see the signs, but because they prefer to remain blind.
It is why Blockbuster fell to Netflix, and why cable news networks are now losing ground to streaming services. The signs of a changing market are obvious, even while nascent, but market leaders often ignore them. After all, why innovate when you can simply replicate the existing revenue model and continue to cash in?
This sentiment applies to many market leading companies who shot to cash flow stardom during the pandemic. It is no secret that Pfizer celebrated its most profitable year to date after a year of selling billions of COVID-19 vaccines across the world. Why let the waning pandemic stop the gravy train? Just a month earlier, Pfizer along with Moderna applied for emergency use authorization for a fourth dose, despite the data proving to be more equivocal than ever. Profits are to be earned, clinical data be damned.
While Pfizer and Moderna may be the most egregious players in the never ending COVID market, they are far from the only ones. Dozens of market incumbents and well-funded upstarts are competing to profit from the COVID innovation market. All they need is for the market to continue thriving.
Just recently, the FDA approved the first aerosolized test for COVID-19. The InspectIR COVID-19 Breathalyzer — which is about the size of a carry-on bag — can identify five volatile organic compounds tied to COVID-19 in a person’s breath using a technique known as gas chromatography, delivering results within minutes. Apparently, we still need rapid tests. Who knew?
In keeping with the theme of offering airborne treatments for airborne viruses, a research collaborative between Northwestern University and Washington University, St. Louis developed an aerosolized treatment for those presenting with symptomatic complications from COVID-19. Designed through computational algorithms and tested in preclinical labs, this compound blocks COVID-19 from entering vulnerable cells in the human body.
It is a marvelous feat of research and engineering – only it is two years too late – assuming we are going by conventional measures of the pandemic timeline. But if we adjust the timeline to keep the COVID market flourishing, then we are perfectly timed.
Just ask the pharmaceutical companies that continue to dole out COVID-19 pills. There are four generally accepted oral medications for COVID. Of the four, Paxlovid is the most accessible and widely available – see the most profitable. And its manufacturers are keen to tout as much.
What does all of this innovation really amount to? The pandemic is waning, well on its way to the annals of history, both in the minds of the public and in the publicly available health data. People have moved on, but the COVID innovation market continues to churn out new forms of therapy. How does that make any sense?
Well, it makes sense when you view the matter from the perspective of industry regulations. The Centers for Medicare and Medicaid Services, CMS, continues to maintain the same reimbursement codes that were modified during the pandemic. So, from a reimbursement standpoint, the pandemic is alive and kicking. And in a heavily regulated market, the regulations define the market. If we are continuing to use COVID reimbursement codes, then for all intents and purposes, the pandemic is still lingering.
For COVID innovations to remain profitable, the market must remain strong. And for the COVID market to remain strong, the pandemic must continue to surge. Even if it means propping industry regulations for a disease that affects fewer and fewer people by the day. This makes for a curious conundrum. How can we trust the powers-that-be to be honest when they stand to profit so mightily from an ongoing pandemic?
Pharmaceutical companies profit from more drug sales. Startups profit from strong market growth. And regulators benefit from overseeing all of it. There is little incentive, from a structural standpoint, to move on from the pandemic – even if the public has all but done so.
It highlights how innovation markets do not reflect those who benefit from such innovations – and reveals yet another disconnect between the patient and the healthcare market.