The JDCA has the pleasure of posting on T1 Diabetes Cure Global Headquarters on Mondays. T1 Diabetes Cure Global Headquarters is a Facebook group dedicated to fostering cure discussions and “Bringing the global T1 community together to share knowledge, research, and hope for the cure to type 1 diabetes.” Our post today describes our latest report, “Type 1 Treatment Innovations Did No Derive From The Non-Profits” and why its important for the diabetes non-profits to focus funding toward cure research.
Our latest report, “Treatment Innovations Have Not Derived From The Non-Profits”, takes a look at the major diabetes treatment innovations over the last 15 years.
An even more appropriate title for this report would be “Why Non-Profits Should Focus On Cure Research Rather than Treatment Research.”
This report is intended to show the inherent disadvantage of diabetes non-profits in funding treatment research. Commercial enterprises have enormous profit incentives to develop innovative diabetes treatments and the non-profits cannot compare to their revenue size and financial resources.
The JDCA estimates that in 2010 the worldwide revenues of insulin, diabetes devices and related consumables were $25-30 billion. This is a huge revenue stream that not only acts as powerful motivation to succeed, but also generates a significant revenues that can be put back into the system as an investment to produce better and improved treatments (which will bring in more revenue…and so the cycle continues).
In contrast, the non-profits in our coverage universe (excluding the Diabetes Research Institute because they fund solely cure research) spent $60 million or over 40% of their total type 1 grants in 2010 on treatment and complications research. This is less than 2% of diabetes-related research and development expenditures by commercial enterprises.
Important Conclusion #1: Non-profits cannot contend with commercial enterprises in the treatment/management/complications research sector because commercial enterprises have substantial financial incentives and resources to produce innovative and new products.
However, the diabetes non-profits can fill the void in diabetes research by funding focused cure research.
Large established commercial enterprises cannot be relied upon to develop a cure because a cure would inevitably shrink the revenue and profit opportunity generated by recurring diabetes product sales.
Non-profits do not have to worry about returning investments or creating a profit, they raise contributions through fundraising events and direct donations from people who do not want or expect to receive money back. Instead, these donors want to see their money being used in the most effective way possible and reflect their intentions for giving (as we have discussed in the past, the JDCA believes that most donors give for a cure and most fundraising events use cure messaging to ask for donations and invite event participation).
Important Conclusion #2: Nonprofits are the institutions most capable of funding focused cure research projects. They can make a substantial contribution to an area that is significantly underfunded in our opinion.
-Cara
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