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Is it profitable for pharma to cure patients?

Julia Korowski, XX2 century

Is it profitable for pharmaceutical companies to cure patients? An analyst at one of the largest investment banks believes that no. On April 10, Goldman Sachs sent out a report on the state of the biotechnology market to clients, in which it outlined disappointing conclusions. A document called "The Genome Revolution" (The Genome Revolution) fell into the hands of CNBC journalists. If you are a supporter of conspiracy theories and have been talking about the "conspiracy of pharma and doctors" for a long time, do not rush to rejoice: Goldman Sachs analysts have suggested at least three possible ways out of the situation.

In a report quoted by CNBC, analyst Salveen Jaswal Richter asks the question: "Is patient healing a sustainable business model?" And answers herself: "The possibility of a potential "one–shot cure" is one of the most attractive aspects of gene therapy and genome editing. <...> But although this project is of great value to patients and society, it can become a problem for developers of gene therapy who want to make a stable profit."

As an example, Richter cites Gilead Sciences, Inc. (California) and its hepatitis C drugs. The effectiveness of these drugs is very high – more than 90%. In 2015, shortly after the drugs appeared on the market, the profit from their sale amounted to $ 12.5 billion, but since then it has been steadily falling. According to Goldman Sachs forecasts, Gilead will earn less than $4 billion on hepatitis C pills this year. Richter explains: it's not just that healthy people don't need drugs anymore, but also that cured people don't pass the disease on. Thus, the number of potential consumers is sharply decreasing – and this is true not only for hepatitis, but also for other infections. At the same time, cancer and other diseases, in which the incidence remains relatively stable, are less risky for business.

Before accusing pharmaceutical companies of self-interest, it is worth remembering that the development of new drugs and conducting clinical trials are expensive. Companies are trying to "recapture" this money, which may not be so easy when it comes to the treatment of rare diseases. For example, last week GlaxoSmithKline Corporation sold the rights to genetic drugs for the treatment of rare diseases to Orchard Therapeutics startup. But when the head of Orchand was asked if the company would be able to make money on new acquisitions, he did not give a definite answer.

The Goldman Sachs analyst offered three solutions to the problem:

1. Focus on vast markets: for example, the market for hemophilia drugs, which is growing at a rate of 6-7% per year.
2. Focus on diseases with high morbidity.
3. Constantly expand the portfolio.

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