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The Incentives Lab
HBT-INC-0202 · Dimension INC · Incentives

Pharma Patent Cliff

Drug companies optimize for high-margin chronic conditions, not cures.

Healthcare Perverse Pattern·Perverse Incentive·Grade C·draft· enriching…

Scientific Definition

Drug companies optimize for high-margin chronic conditions, not cures.

Plain-English Definition

Drug companies optimize for high-margin chronic conditions, not cures.

Feynman Explanation

A cure is a one-time revenue event. A treatment is an annuity.

Core Principle

Drug companies optimize for high-margin chronic conditions, not cures.

Mechanisms

Psychological

Pending editorial review.

Behavioral Economic

Drug companies optimize for high-margin chronic conditions, not cures.

Neurological

Pending editorial review.

Evolutionary

Pending editorial review.

Sociological

Innovation portfolios shaped by IP economics, not by patient need.

Computational

Pending editorial review.

Systems

Pending editorial review.

Inputs (Triggers)

Pending editorial review.

Outputs (Behaviors)

Pending editorial review.

Behavioral Signature

A cure is a one-time revenue event. A treatment is an annuity.

Examples

Everyday
  • More R&D on chronic management than on disease elimination.
Modern (Organizational)
  • Innovation portfolios shaped by IP economics, not by patient need.
Historical

Pending editorial review.

Famous Experiments

Pending editorial review.

Design Principles

  • Public-private hybrid funding for under-incentivized disease classes.

Measurement Approaches

Pending editorial review.

Evidence

Evidence Grade
C (A strongest → E speculative)
Replication
★★★☆☆
Intervention Confidence
4 / 5
Consensus
Pending editorial review (HBT v1.0 auto-seed).
Limitations
Pending editorial review (HBT v1.0 auto-seed).
Open Research Questions

Pending editorial review.

Primary References

Pending editorial review.

Signature Section

The Perverse Incentive Lens™

How this behavior is exploited — and how to redesign around it.

Exploitation
Innovation portfolios shaped by IP economics, not by patient need.
Amplifying Incentives
Innovation portfolios shaped by IP economics, not by patient need.
Org Failure Modes
Innovation portfolios shaped by IP economics, not by patient need.
Societal Failure Modes
Pending editorial review (HBT v1.0 auto-seed).
Ethical Considerations
Pending editorial review (HBT v1.0 auto-seed).
Redesign Strategies
Public-private hybrid funding for under-incentivized disease classes.
Diagnostic Questions
  • Public-private hybrid funding for under-incentivized disease classes.
Warning Signs

Pending editorial review.

Red Flags

Pending editorial review.

Intervention Playbook
Individual
Public-private hybrid funding for under-incentivized disease classes.
Team
Pending editorial review (HBT v1.0 auto-seed).
Organization
Pending editorial review (HBT v1.0 auto-seed).
Policy
Pending editorial review (HBT v1.0 auto-seed).
AI Implications
Detection
Pending editorial review (HBT v1.0 auto-seed).
Measurement
Pending editorial review (HBT v1.0 auto-seed).
Mitigation
Pending editorial review (HBT v1.0 auto-seed).
Responsible Use
Pending editorial review (HBT v1.0 auto-seed).

Interactive Mini Network

Click any neighbor to re-center the graph and follow the threads of connection.

HBT-INC-0202 · INC
Pharma Patent Cliff
PPMA15-Minute AppointmentsBD340B Discount Arbitr…DMDefensive MedicineDCDual-Eligible Care S…FHFee-for-Service Heal…HOHospital Occupancy T…IBInsurance Billing Co…ICInsurance Claim Fric…MDMedical Device PricingOPOpioid Prescription …

Knowledge Graph Neighbors

Auto-linked to the rest of the Human Behavior Taxonomy by family, domain, dimension, and shared keywords.

Same family
HBT-INC-000215-Minute Appointments

Productivity targets compress visits, raising misdiagnosis and burnout.

Same family
HBT-INC-0003340B Discount Arbitrage

A federal mandate intended to lower drug costs for the poor became a profit engine for hospitals and contract pharmacies.

Same family
HBT-INC-0092Defensive Medicine

Liability exposure pushes clinicians to order tests for legal protection rather than clinical need.

Same family
HBT-INC-0098Dual-Eligible Care Shifting

Federal reimbursement rules incentivize cycling seniors through hospitalizations to upgrade billing categories.

Same family
HBT-INC-0125Fee-for-Service Healthcare

Paying providers per procedure rewards more procedures, not better outcomes.

Same family
HBT-INC-0147Hospital Occupancy Targets

Systems paid per filled bed have weak incentives to invest in prevention or community health.

Same family
HBT-INC-0162Insurance Billing Complexity

Opaque billing rules create lucrative work for administrators and revenue-cycle firms instead of care.

Same family
HBT-INC-0163Insurance Claim Friction

Insurers profit when claims are denied, delayed, or abandoned.

Same family
HBT-INC-0175Medical Device Pricing

Hospital group-purchasing and opaque contracting inflate device costs far above marginal cost.

Same family
HBT-INC-0196Opioid Prescription Incentives

Sales bonuses and prescriber relationships fueled mass over-prescription and an addiction crisis.

Same family
HBT-INC-0197Orphan Drug Monopoly Extension

Federal incentives meant for neglected diseases get used to privatize widely available medicines.

Same family
HBT-INC-0203Physician Reimbursement

Specialists earn more for procedures than primary care for prevention.

Version History

v1.1.0 · 2026-06-28Initial auto-seed from corpus.