AI drug developer Recursion Pharmaceuticals is considering an Amazon Prime-style subscription model for selling its pipeline of medicines.
The Salt Lake City-based biotech wants to create a system where a U.S. employer could pay, for example, $45 a month per employee to access any medicine Recursion develops regardless of price — provided it's prescribed by a doctor. If successful, the move has the potential to revolutionize how drugs are sold.
"We're going to build the Amazon Prime of this industry," Chief Executive Officer Chris Gibson told Bloomberg at the company's office in King's Cross, London. Recursion, which has a market value of $3 billion, has been talking about the proposal with some of its larger investors for several years, he said.
It faces major hurdles, requiring changes across the U.S. health system and eliminating many players involved in decisions around drug pricing, insurance and access to new medicines. With no drugs close to market, Recursion also likely has several years before it could implement the idea.
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Still, Recursion has form on trying things differently. It is using artificial intelligence and automation to test compounds, to try to speed up development and trial of new medicines to treat conditions such as cancer and rare diseases.
Gibson's proposal would see Recursion's first drugs come to market in the traditional way, before starting the subscription model once it has a medicine portfolio. The monthly price could increase as more treatments are added.
Supporters of subscription pricing say it reduces uncertainty around revenue for drugmakers and the costs facing health-care providers.
Health economists are examining the viability and need for subscription models on a larger scale, though questions about whether they reduce overall spending make widespread take-up far from certain.
Recursion isn't the first company to propose an overhaul of U.S. drug pricing. EQRx planned to bring drugs to market that could compete with newly launched medicines at a lower cost through a so-called global buyers club of insurers and hospitals. The biotech ultimately failed because it was unable to develop its own drugs or license them from China.
Some subscription models do exist. In the U.S., some insurance companies have started selling plans where companies pay a monthly fee — often less than $2 a month per employee — for access to gene therapies, which are one-time, multimillion-dollar treatments.
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England's National Health Service pays drug firms a fixed annual amount for antibiotics, regardless of how many are prescribed.
"The industry has to go in this direction," said Gibson, who has faced questions around his ambitious targets for using AI to develop drugs.
Still, Recursion has slowly convinced the industry that its proposition around drug development could work, and the company has partnerships with pharmaceutical firms including Bayer AG and Sanofi. Gibson sees subscription models, or something close to it, as the next change the industry needs.
"There's some very smart people who are going to invest in this direction, and we're going to do everything we can to be a part of it," he said.
