On April 10th 2018, Goldman Sachs published “The Genome Revolution” report on gene therapy, in which its analyst posed the thought-provoking question: “is curing patients a sustainable business model?”
The question comes at a relevant time. Just last week, two of the world’s top pharma giants appear to have taken contrasting stances on the capacity of gene therapies to deliver on their expectations of commercial profit. Novartis has entered into an agreement to acquire AveXis, for a whopping $8.7 billion (€7 billion), in the hopes of expanding its capabilities in gene therapy and commercializing a potentially transformative treatment for Spinal Muscular Atrophy. Conversely, GlaxoSmithKline has decided to sell its rare disease gene therapy portfolio to British startup Orchard Therapeutics, for a mere 19.9% equity stake and a seat on the board.
The dilemma arises due to the industry’s current business model, which heavily relies on the cash and profits that the products curate over time. In fact, despite their remarkable value for patients and society, and despite their hefty price tag, the attainment of sustained cash flow from “one-shot” cures remains challenging.
We need to think beyond health economics, and explore industrial economics, if we wish for gene therapy to succeed. It will be critical not only to restructure the way in which the research and development business is modelled, but also adapt the way in which health care is delivered and financed in the absence of insurable risk. Collaboration between providers, payers and insurers will be key to prevent patients to be deprived of a cure.