Who Will Ultimately Pay for New Precision Medicines and Cell & Gene Therapies
Historically, 80% of healthcare spending has resulted from the sickest 20% of all patients. That fact alone has shaped decades of disease management and care coordination strategies.
But the healthcare economy is evolving rapidly before our eyes.
Today, the cost curve is being redrawn by a different force: roughly 5% of patients with rare and complex conditions are now driving over 50% of all high-cost claims.
These patients often qualify for—and require—emerging precision therapies like cell and gene treatments to manage or improve their care.
And what we’re seeing now is only the beginning.
The Tipping Point of a New Cost Era
With more than 4,000 precision therapies in development—including gene therapies, immunotherapies, and RNA-based treatments—the financial impact is set to explode. By 2030, it’s projected that:
Over $1 trillion will be spent annually treating rare diseases—3x to 5x more than what's currently spent on common chronic conditions like diabetes or hypertension.
And this isn’t theoretical. Several gene therapies already on the market carry price tags between $2 million and $4 million per patient.
Why Employers Should Care Now
This isn’t just a healthcare system issue. It’s a business risk. Here’s why:
Self-funded employers increasingly bear the brunt of catastrophic high-cost claims
Stop-loss premiums are rising to account for gene therapy exposure
A lack of predictability makes year-over-year cost forecasting more difficult
For employers offering health benefits, rare disease is no longer rare—it’s financially defining.
How to Prepare for the Precision Medicine Surge
Forward-thinking employers and advisors are starting to ask new questions:
How do we protect against multi-million-dollar outlier claims?
What funding models can absorb or spread these new risks?
Can we build networks, partnerships, or coverage carve-outs specifically for high-cost gene therapies?
Is our current stop-loss or captive strategy equipped for this future?
Have we considered CGT reinsurance, no matter the size of our organization?
Are we exploring clinical trials as a lower-cost access point for employees?
The Bottom Line
Precision medicine holds incredible promise for patients—but also unprecedented financial exposure for plan sponsors.
By 2030, the biggest threat to employer health plans won’t be the volume of claims. It will be the value and volatility of just a few.
Now is the time to rethink plan design, funding strategy, and risk protection—to strategically and ethically provide access to the precision medicines patients deserve, without breaking the bank for individuals or their employers.
Sources:
Managing the Most Expensive Patients, Harvard Business Review, Feb 2020
Gene, Cell & RNA Therapy Landscape, ASGCT, Q2 2021
