Goldman Sachs asks: 'Is curing patients a sustainable business model?'

Guillotine sales soar.

"The potential to deliver 'one shot cures' is one of the most attractive aspects of gene therapy, genetically-engineered cell therapy and gene editing. However, such treatments offer a very different outlook with regard to recurring revenue versus chronic therapies," analyst Salveen Richter wrote in the note to clients Tuesday. "While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow." [...]

"GILD is a case in point, where the success of its hepatitis C franchise has gradually exhausted the available pool of treatable patients," the analyst wrote. "In the case of infectious diseases such as hepatitis C, curing existing patients also decreases the number of carriers able to transmit the virus to new patients, thus the incident pool also declines ... Where an incident pool remains stable (eg, in cancer) the potential for a cure poses less risk to the sustainability of a franchise."

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5 Responses:

  1. Other Jamie says:

    Perhaps this is simply an opportunity for an Innovative Financing Model. I’m sure there are plenty of classes of patients with profitable maladies who would appreciate a “health maintenance” approach; while, say, an MS cure isn’t easily repossessed, suitable means of returning the body to an approximation of its original state is a cheap remedy for failure to keep up on payments for the life-credit they’ve generously been extended.

    Or, you know. Just harvest the deadbeat’s organs.

  2. ennui says:

    Wall Street has been funding a bunch of head scatching economics reports on how possibly we could fund these life saving treatments... here's the important thing:

    https://www.healthaffairs.org/do/10.1377/hblog20161103.057356/full/

    Medicare spent somewhere between $4 and $9 billion on hep C drugs, largely from "GILD" and about 75% of the tab was picked up by the federal government. The pricing on these cures is about income transfer from federal taxes to these new pharma investors that Goldman et al are rustling up. I think it's about heading off congressional action. It would be pretty easy for Medicare to "neogtiate" much better prices... and Congress will eventually do that. I think Goldman ultimately wants some kind of explicit federal subsidy for investors, that gets transfered through some mechanism other than prices and the smartest economic minds are now at work!

  3. zeugmatis says:

    Is it just me, or does he have a Michael Jackson nose?

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