Goldman Sachs Ask If ‘Curing Patients Is A Sustainable Business Model’

Analysts of an investment banking firm asked its clients a fairly bizarre question, "Is curing patients a sustainable business model?"

There is no denying the fact scientific breakthroughs and pioneering technologies in healthcare are on the horizon, saving lives from deadly diseases.

But recently, analysts from the Goldman Sachs, a leading global financial service provider, put forward a question to its client which was along the lines of a disturbing suggestion that rescuing patients come at a cost of losing profits.

“Is curing patients a sustainable business model?” analysts asked in an April 10 report entitled “The Genome Revolution,” CNBCreported.

Analyst Salveen Richter and colleagues laid it out:

“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... While this proposition carries tremendous value for patients and society, it could represent a challenge for genome medicine developers looking for sustained cash flow.”

In the investment bank’s report, Richter also cited Gilead Sciences, a research-based biopharmaceutical company of drugs, which provides treatment for hepatitis C and have cure rates exceeding 90 percent. In 2015, the company’s hepatitis C treatment sales peaked at $12.5 billion. But as more people got cured there were less infected individuals to spread the disease, which is a good thing— well, not for the company’s sales which started to decline.

Goldman estimated the U.S. sales for these treatments will be less than $4 billion this year.

"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."

No matter how inhumane it sounds, technically Goldman analysts are not wrong to point out it’s tricky for drug makers to make a sustained profit from one-shot cures.

At least one drug maker has an answer to the bank’s question and that is a no. GlaxoSmithKline, one of the largest pharmaceutical companies, sold off its pipeline of gene therapies for rare disease to London gene-therapy upstart Orchard Therapeutics for a 20 percent stake in the company.

Innovative gene therapies are often pitched as one-time cures which don’t ensure a long-term stream of profits for the manufacturers. This may have been the impetus behind GSK’s announcement, as they don’t want to take a risk of running out of patients as they are cured.

For obvious reasons the investment bank’s question sparked widespread criticism as people found it appalling that a human being’s suffering was put next to the profits company makes.




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