Genomics encompasses all aspects of human biology, meaning that its developments have significant implications for health care. While genetics is the study of single genes (and the role they play in traits being passed between generations), genomics is a term that describes the study of an organism’s complete set of DNA, including all its genes. This makes it more relevant to a wider range of sectors and individuals. As technological advancements and the understanding of genomics increase, the more we are able to appreciate the impact that an individual’s genome can have on their health.
Improvements in sanitation, access to clean water, and the discovery of antibiotics have increased life expectancies across the globe; we can now expect to live to double the age that we would have expected only 100 years ago. This has resulted in strong growth in demand for health care, as countries in the West experience an increasingly ageing population. This places an exceptionally heavy burden on governments, health-care providers, and society. Health-care spending in the United States currently makes up 18% of GDP – an already unsustainable proportion, and yet the demand for health care is still increasing. The global economy is in desperate need of health-care solutions, rather than treatments, which developments in genomics could facilitate.
Before the first sequencing of the human genome, it was thought to be far more complex than it actually is. As it happens, we actually have far fewer genes than the humble tomato, which has 28,000 genes relative to our paltry 20,000. This relative lack of complexity has allowed genome technology to progress at a far greater pace than was originally thought.
In the UK, the average male lives for 80 years, but unfortunately only 63 of those are typically spent in good health. This means that the average male spends 17 years in ill health, suffering from diseases like cancer, heart disease and Alzheimer’s, often during retirement. At this point, Western populations tend to die from these age-related diseases. However, genetic screening should make it possible to identify the genes that are responsible for some of these diseases and to act proactively, thus reducing the need for lifelong health-care treatments. This should also enable the eradication of certain diseases, such as cystic fibrosis, which is caused by just a single gene.
Pharmaceutical companies have also been able to develop effective cancer drugs based on the individual differences in human genomes. This means that drugs can effectively be tailored to individuals, so that painful and expensive treatments do not need to be administered to everyone without knowing whether or not they are likely to be successful. As well as reducing the strain this will place on individuals, these improvements could also help to reduce the inefficiencies and wastages that exist in health-care systems.
However, more needs to be done to reduce the growing health-care burden, and governments are grappling with how they will fund health care in the future. In this context, pharmaceutical companies may struggle to justify selling a drug that provides only an incremental health benefit but still carries a hefty price tag. In effect, they are likely to need to demonstrate both the economic and clinical benefit of a drug in order to continue receiving government support.
A New Payment Model?
Governments are also considering paying health-care companies in a different way. For example, rather than paying for a drug upfront, a government could agree only to pay for the drug if it actually works. This forces companies to place far more emphasis on ensuring that they have sufficient data and research to support the development of a drug, and that it will be effective in society, not just in clinical trials.
Individuals are also going to need to make adjustments if these scientific advancements take place. People will need financial solutions to meet requirements associated with much longer lives, as genomic advancements could make us more agile in our old age. Our view is that, as people go into retirement they are going to care more about how their income is delivered, with a requirement for lower volatility of income, while short-term volatility of capital is likely to be less of a concern. Individuals may also need that income for a much longer period of time than they expect. In this context, asset managers will need to ensure the solutions they provide remain relevant to support the global, demographic changes that developments in genomics could bring.
This is a short extract from an episode of BNY Mellon’s podcast series ‘Agents of Change’. To hear more about genomic advancements and changing health-care demographics, you can listen to the full podcast here.
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