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Pad Your Wallet Like Big Pharma

Written by Alexandra Perry
Posted February 4, 2018 at 7:00PM

A few years back, a major crime was committed against patients battling cancer or fighting HIV.

This crime had the potential to cause thousands of deaths, and the law couldn't even prosecute the perpetrator.

In fact, this "crime" was only a crime in the eyes of the public, who could do nothing but watch in horror.

In 2015, the 32-year-old CEO of Turing Pharmaceuticals, Martin Shkreli, increased the price of a critical drug from $13 to $750 a pill.

The drug was called Daraprim. It's primarily used to treat parasitic infections. Patients at risk for this infection include those with HIV and cancer.

The worst part of this price increase was that there was really no need for it. In fact, Daraprim had been on the market for over 60 years! It wasn't new or cutting edge. It was an antiquated medicine.

But that didn't stop Shkreli from trying to make millions off of the people reliant on it.

Shkreli built his million-dollar fortune on the back of the pharmaceutical industry. Before he founded Turing Pharmaceuticals, Shkreli was the CEO of a company called Retrophin. He was fired from this position because of "bad management." But, knowing where the money was, Shkreli quickly jumped back on the pharmaceutical profit wagon.

And Shkreli's money-chasing behavior isn't even the sad part. 

While the Daraprim controversy caused public outrage, similar events are happening every day in the United States and going unnoticed.

In fact, the costs of pharmaceuticals have been going up for years. And it's leaving patients in the lurch.

The Rising Costs of Disease

It's no mystery that medicine is getting more expensive. You've likely seen it in your own medical bills.

Yet since these changes have happened slowly, many don't realize the severity of the increase. Here are a few examples.

Over the last 10 years, patients suffering from rheumatoid arthritis (RA) have seen treatment costs skyrocket. Today, a patient with the disease could be looking at over $1 million in treatment costs over the course of their life.

Patients with multiple sclerosis are in a similar boat. Avonex, a major drug used to treat MS, has skyrocketed in price over 537% since 2001.

And then there is diabetes, a disease that affects nearly 10% of the American population.

In the last five years, the most popular diabetes drugs on the market have increased in price by over 150%. Outside of that price increase, the price of insulin is also expected to rise 18.3%.

For me, it's those numbers that are a real kick in the gut.

My brother was diagnosed with type 1 diabetes when I was 10.

After my brother was diagnosed, I saw my dad cry for the first and last time. To me, it was a freak event. My father was military, and I had never seen him cry.

Looking back, I realize that my dad was crying not because of the immediate diagnosis, but because of the life sentence it had handed my brother.

For the rest of his life, my brother will have to contend with the costs of diabetes.

These costs are the result of a broken medical system — a system that benefits the pharmaceutical and insurance companies behind the scenes.

But in the last couple of years, a new technology has emerged in the medical field. And it's making Big Pharma a bit nervous.

This technology could make my brother part of the last generation to be born with a higher risk of diabetes. It could also destroy Big Pharma's hold on the medical industry, lowering costs and eliminating diseases that otherwise would take years of treatment.

The technology I'm talking about is called CRISPR-Cas9, and it's a revolutionary gene-editing method

Saved by CRISPR

In the last couple years, the CRISPR-Cas9 gene-editing method has garnered a massive amount of interest from both scientists and the media.

Put simply, CRISPR is a powerful tool used for editing DNA. Bacteria have been utilizing CRISPR since the dawn of time to defend themselves from an onslaught of viruses.

It wasn't until 2014, however, that scientists realized this revolutionary method could be used in humans. If CRISPR is used alongside a unique enzyme called Cas9, it could potentially alter the human genome and end some of the worst genetic diseases to plague humanity.

CRISPR-Cas9 is revolutionary for multiple reasons. First off, it isn't science's first foray into the gene-editing space. We've been editing genes in our food for years. That said, CRISPR-Cas9 is the most targeted gene-editing method on the market.

Scientists can use CRISPR-Cas9 to target and snip very small portions of DNA. Currently, the CRISPR-Cas9 gene-editing method is also far cheaper than the other gene-editing methods scientists are experimenting with.

In the field of medicine, these two benefits give CRISPR-Cas9 vast potential. Through the use of CRISPR-Cas9, certain pharmaceuticals can be developed to target otherwise untouched diseases.

If CRISPR-Cas9 is used before a baby is born, then that baby could potentially have lethal or debilitating genetic diseases cut from its DNA before it even sees the world.

To many people, this is jaw-dropping. And we are very close to seeing it break through into mainstream medicine.

CRISPR-Cas9 is being used in science today. Let's look at an example.

In 2014, scientists tackled muscular dystrophy through CRISPR-Cas9 technology.

Muscular dystrophy is when a molecular component in muscle cells called the dystrophin is broken down. Scientists from the University of Texas demonstrated that CRISPR-Cas9 could be used to correct the mutations that occur with muscular dystrophy in mouse eggs. These eggs then developed into healthy mice that were free of muscular dystrophy.

That is big progress.

That is a step toward the future.

CRISPR in 2018

As we head into 2018, a group of small companies is getting ready to test CRISPR-based treatments on humans. And the medical world has taken note.

Large pharmaceutical companies have caught the scent of CRISPR-Cas9 and want their cut of the action.

Sadly for Big Pharma, only a handful of small companies hold the rights to the CRISPR patent.

This means, as the CRISPR-Cas9 gene-editing method is incorporated into our medical system, it is the small companies that will make a profit — not Big Pharma.

That means investors have an opportunity to profit from this developing market. The total gene-editing market is expected to be worth $8.1 billion by 2025.

Later this week, my colleague Jeff Siegel is releasing a report that details three of the companies working with the CRISPR-Cas9 patents. So keep an eye on your inbox.

Until then, best of luck with your investments,


Alexandra Perry

follow basic@AlexandraPerryC on Twitter

Alexandra Perry is a contributing analyst for Wealth Daily and Energy and Capital. She has multiple years of experience working with startup companies, primarily focusing on artificial intelligence, cybersecurity, alternative energy, and biotech. Her take on investing is simple: a new age of investor can make monumental returns by investing in emerging industries and foundational startup ventures.


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