Remarkably, even though Juvenile Diabetes is the largest autoimmune disease, only 1.5 million Americans suffer with the disease and only 15,000 new patients are diagnosed each year. To put these numbers in perspective, Juvenile Diabetes affects nearly four times as many people as Multiple Sclerosis, another well-known autoimmune disorder. In comparison, major disease categories such as cancer (with 12 million patients and 1.5 million new patients each year) and cardiovascular disease (with 83 million patients or 55 times the number of juvenile diabetics) represent large, lucrative markets for the drug and device industry. In fact the total national cost of caring for cancer and cardiovascular patients is 10 to 15 times greater than the cost of caring for Juvenile Diabetics. However, in terms of cost per patient, Juvenile Diabetes is five times more costly than cardiovascular disease and almost on par with cancer.
Pharmaceutical and medical device companies view the Juvenile Diabetes market as an orphan market – tiny by traditional healthcare standards. Because Juvenile Diabetes affects a relatively small number of people, major pharmaceutical and medical device companies have historically been reluctant to dedicate considerable capital to developing a cure or treatments. What research is conducted has been concentrated on incremental changes to existing drugs or technologies. This leaves charitable organizations and the federal government as the primary funding source for diabetes research.
The National Institute of Diabetes and Digestive and Kidney Diseases or NIDDK (a unit of the National Institute of Health or NIH) manages the Special Diabetes Program (SDP), created by Congress, which has historically been the largest single sponsor of Juvenile Diabetes research accounting for 35% of the publicly funded T1D research at NIH. This funding program augments regularly appropriated funds that the HHS receives for diabetes research through the House and Senate appropriations. The SDP has budgeted total funds of $1.89 billion for fiscal years 1998 through 2013 and thanks to the advocacy of organizations like the JDRF, Congress renewed the program for another year.
The top four donor sponsored charities for diabetes research contribute $183 million in annual awards as summarized below
Based upon our review of the funding strategies of the leading diabetes philanthropy groups, we found three major drawbacks: (i.) as noted above, too much of there expenses fund non-research activities, (ii.) as outlined below, they fund too many projects and (iii.) as discussed below, they contribute too little towards a cure. As the table below highlights, some of the major funding organizations are supporting several hundred research project each year, yielding a broad and relatively shallow funding strategy.
Based upon our research, meaningful resources among the large charities have been diverted from cure projects into other areas such as education, prevention, and treatments. As outlined in the table below, cure related research has been cut in half since 2008. The Juvenile Diabetes Cure Alliance estimates that in 2012 only two of every ten dollars raised by the four major Juvenile Diabetes charities was allocated to cure research.
We believe there are a number of reasons for the considerable drop in cure related funding. JDRF and ADA have been in business for 42 and 72 years and have dedicated several billion dollars towards research and yet neither organization touts a significant cure-related success. Frustration has likely set in among donors and their staff may have had to target less ambitious goals. Funding more pragmatic research is perhaps a simple survival strategy. Further evidence of “lowering the research bar” is that the majority of research that has moved into clinical trials focuses on extending the so-called “honeymoon” period. Most newly diagnosed Juvenile Diabetics go through a short phase when their bodies produce some native insulin. According to research by Joshua Levy, who tracks clinical trials, extending this honeymoon research accounted for 100% of phase III clinical trials, 76% of phase II and 50% of phase I trials in 2011. If successful, the extension of the honeymoon period benefits only 15,000 newly diagnosed diabetics each year – less than 1% of the total population.
Another reason for the drop in cure related funding could be that a comprehensive cure is too complicated and too unlikely to succeed with current technologies and know-how. From a scientific perspective a true cure for Juvenile Diabetes involves simultaneously solving at least two medical maladies: turning off the autoimmune response and replenishing depleted insulin-producing beta cells. We define this as the “comprehensive cure”. At this point we believe a comprehensive cure is outside the scope of our national scientific expertise and funding ability. Nevertheless, we believe a pragmatic approach could be achieved, we define this concept (borrowing from the JDCA) as a “practical cure”: to eliminate insulin injections for at least a year via a simple physician office procedure and implemented in a way that involves no new health complications.
A broader market perspective on insulin dependent diabetes
We believe the statistics for Juvenile Diabetics actually understates the true market potential for device and pharmaceutical products because it excludes the sizable and growing insulin dependent Type 2 Diabetes market. There are nearly ten times as many Type 2 Diabetics as Juvenile Diabetics. The rate of Type 2 Diabetes is growing 10% per annum. Although there are a total of nearly 20 million Type 2 Diabetics in the U.S., there are estimated to be another 7 million that are undiagnosed and there are another 57 million Americans who are pre-diabetic. Obesity is the number one risk factor for Type 2 Diabetes. It is not widely understood that Type 2 Diabetics, if their underlying causes are not treated, will devolve into a condition of near Juvenile Diabetes. Regrettably a sad beneficiary of the explosion in Type 2 Diabetes may well be increased research funding for a cure for insulin dependent diabetics, including Juvenile Diabetics.
Insulin: The Double Edge Sword
On one side Juvenile Diabetes is unique among the autoimmune diseases, and chronic diseases, because insulin provides a day-to-day management of the conditions of the disease. Some view insulin therapy as a “cure” because it enables Juvenile Diabetics to live a near normal life expectancy. Therefore, unlike other chronic autoimmune diseases with no such solution, donors may view Juvenile Diabetes research with a lower sense of urgency. Physicians may also be reluctant to refer Juvenile Diabetics to clinical trials that are controversial or perceived to be risky.