This argument is not limited to gene therapies, but would apply to pretty much every pharmaceutical product.

One issue is however that the actual costs are not so much in early R&D (what the publicly funded universities and hospitals are doing), but in the later stage (clinical trials) which needs deep pockets and appetite for risk, which only big pharma has, because they see a potential big payout.

Right. Because your average citizen has a few hundred thousand dollars for their rare congenital disease. My bet — just wild eyed speculation — is that most of this stuff is paid for by the govt through sone sort of insurance-like subsidy. That means the risk is really borne by the tax payer.

Let's just cut out the middle man.

It's less the research and more getting a treatment to people. Governments around the world refuse to pay for this, and in fact demand that various risks and expenses be paid by pharma companies, with mostly negative results.

It is so bad that for a lot of treatments, getting them to people costs upwards of hundreds of millions of dollars. And almost all of these efforts fail.

This would mean the government would need to breed (and pay for) lab animals, small and large (from mice to primates). Would need to pay more for medical care, would need to collect (and pay) people to try out experimental drugs and treatments on. If these treatments or drugs have adverse effects, the government would need to shoulder sometimes lifelong payments and care to these people. It would need to cover all this knowing that in 90% or so of cases the whole effort was for nothing.

This is, to put it mildly, not happening.

We really don't have a great pipeline for publicly funded developments going all the way to the treatment stage.