Apr 21, 2026
Gene therapy has been a major area of biotech research for the past several years, with new FDA-approved treatments (1) recently hitting the market. It can theoretically cure debilitating or fatal conditions such as sickle cell anemia, spinal muscular atrophy and even different types of cancer.
At first blush, gene therapy seems like it would be a very profitable area of research. For many of the conditions it targets, patients have few options to manage their illness, much less cure it.
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But in 2018, Goldman Sachs released a report (2) predicting gene therapy could be a “challenge” for developers looking for “sustained cash flow.” It said that because gene therapy aims to cure diseases with a single treatment, companies could shrink their own market faster than it replenishes, leading to weaker profits over time.
More than half a decade later, that prediction is starting to look partly right, though not entirely for the reasons Goldman Sachs outlined. Several recent gene therapies have struggled to find a market (3), leaving developers struggling. Many drugs aren’t even reaching the failure point Goldman Sachs described. Instead, they are treating only a handful of patients each year — not enough to turn a profit.
Here’s why gene therapy isn’t turning out to be as profitable as expected.
High per-patient costs make it hard for buyers
Gene therapy works by either adding or altering a patient’s genetic code (4), allowing the body to produce proteins it needs to function properly. The process is very expensive for both patients and the companies providing the treatment.
For example, a one-time gene therapy for spinal muscular atrophy (5) costs $2.125 million. Other gene therapies can range from hundreds of thousands to several million dollars. Even at those prices, companies often operate on thin margins (6), making it risky if demand falls short of expectations.
While these therapies may be cheaper than long-term treatment, many patients cannot afford such high upfront costs. Insurance may not cover all of those costs. Medicaid programs can impose additional restrictions (7) on eligibility, making access even more difficult.
In 2022, former President Joe Biden issued an executive order, Lowering Prescription Drug Costs for Americans (8), aimed at improving affordability for Medicare and Medicaid patients. In 2025, shortly after taking office, President Donald Trump struck down that order as part of a broader rollback titled, Initial Rescissions of Harmful Executive Orders and Actions (9).
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Budget cuts make research more difficult
Medicaid patients aren’t the only ones affected by recent policy shifts. The federal government plays a major role in biotechnology research (10), often funding long-term work that is not immediately profitable.
Private companies benefit from advances made through publicly funded research. But recent changes have made that work more difficult.
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The FDA and the NIH both saw major layoffs (11) in March 2025, cutting thousands of employees. The NIH faced additional cuts (12) months later, including about 250 positions and 50 at the National Cancer Institute.
Gene therapy has shown promise in treating cancer (13). Reducing the workforce behind that research could slow progress and lengthen development timelines.
Trump also proposed a 2026 budget that would have cut the NIH’s budget by 40% (14), though it was not passed. In April 2026, he introduced a 2027 proposal that would reduce (15) the NIH budget by $5 billion.
The proposal argues the agency “broke the trust of the American people” through wasteful spending, misleading information and risky research.
It also calls for closing several institutes and centers that support marginalized groups, including programs focused on HIV research (16). Gene therapy has shown potential to push HIV into long-term dormancy. Future progress could be at risk if funding and institutional support are reduced.
Article Sources
We rely only on vetted sources and credible third-party reporting. For details, see our editorial ethics and guidelines.
U.S. Food and Drug Administration (1); Goldman Sachs (2); Brain Trials (3); MedlinePlus (4); National Institutes of Health (5); Bloomberg (6); American Society of Gene & Cell Therapy (7); Federal Register (8); The White House (9); National Academy of Medicine (10); U.S. Department of Health and Human Services (11); Fierce Biotech (12); National Institutes of Health (13); Congressional Research Service (14); The White House (15); Johns Hopkins Medicine (16)
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Kit Pulliam is a DC-based financial journalist with over five years of experience writing, editing, and fact-checking financial content. They've covered a wide variety of financial topics, including banking, taxes, budgeting, investing, politics, the economy, and government policy.
