1. Cure for Type 1 Diabetes Imminent after Harvard Stem-Cell Breakthrough Aayush Mittal Economics of Healthcare October 15, 2014 http://www.telegraph.co.uk/science/science-news/11151909/Cure-for-Type-1-diabetes-imminent-after-Harvard-stem-cell-breakthrough.html

2. 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

3. History of the Economics 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

4. This is Type 1 AND Type 2

5. 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

6. 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.

7. 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

8. D* Quantity D Price S* Q* P* P Q

9. 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

10. 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

11. 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.

12. Sources http://www.nlm.nih.gov/medlineplus/diabetestype1.html http://www.telegraph.co.uk/science/science-news/11151909/Cure-for- Type-1-diabetes-imminent-after-Harvard-stem-cell-breakthrough.html http://www.telegraph.co.uk/science/science-news/11151909/Cure-for- Type-1-diabetes-imminent-after-Harvard-stem-cell-breakthrough.html https://www.clinicalkey.com/#!/content/playContent/1-s2.0- S0889852910000356?scrollTo=%23hl0000439 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- S0889852910000356?scrollTo=%23hI0000538 https://www.clinicalkey.com/#!/content/playContent/1-s2.0- S0889852910000356?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.reuters.com/article/2014/10/01/us-novo-nordisk-insulin- idUSKCN0HQ41I20141001 http://www.thermalin.com/market.html http://www.bbc.com/news/health-29566784