Can We Afford Personalized Medicine?

Few movements in recent years have come along with the force and acclaim of personalized medicine. Its aim, in the words of one of its founding fathers, Leroy Hood, is to “find the right treatment for the right person at the right time.” The combination of the two fields of genomics and proteomics (the study of proteins) is the engine behind the movement, and its main attribute, called P4 medicine, is that it will be personalized, predictive, preventive, and participatory. Already making its mark in cancer diagnosis and care, personalized medicine aims to understand us in our genetic health and disease particularities, moving beyond the scientific generalities marking current medical practice. As a PriceWaterhouseCoopers study put it, “While still in its early stages, personalized medicine is steadily emerging as the new healthcare paradigm.”

But will it raise or lower the cost of health care? Hard data is scant, in great part, no doubt, because personalized medicine still has little experience or history behind it. But there are claims it can lower costs, and on what seem to be reasonable grounds – that savings in cancer care, for instance, can come from pinpointing treatments that will or will not be beneficial.

Yet while examples of possible savings have been cited, given the scope and ambition of the personalized medicine movement its overall cost impact is far less clear. It is worth keeping mind the well-established estimate that some 50% of annual cost increases come from new technologies or the intensified use of old ones. A 2008 Congressional Budget Office study found that “examples of new treatments for which long-term savings have been clearly demonstrated are few.”

The PriceWaterhouseCoopers study, designed as a guide to investors and business leaders in making the most of the large profits that are emerging, inadvertently paints a less-than-reassuring picture about whether this technology will be one of those few. “The U.S. personalized medicine market,” it says, “is estimated at about $232 billion and is projected to grow at 11% annually, nearly doubling in size by 2015 to over $450 billion.” Now unless I have missed a basic point about American health care, what is a source of market growth and profit for some is a source of costs for others. Someone or other has to pay for those benefits: private insurers, the government, or out-of-pocket for consumers. The study does not mention that point.

A few other points jump out (at least to a cost maven like me), presented as

business tips:

  • “capitalizing on preferential use of and premium pricing for drugs of proven benefit”
  • “a higher rate” of “repeat prescribing”
  • “the emergence of ‘niche busters’” – drugs targeted to small populations but carrying a high price tag – “to replace some of the income lost as blockbusters go off patent”
  • “strategies to broaden the definition of what is considered ‘health’”

No doubt this is savvy profit-enhancing advice, of a tried and true kind – “premium pricing,” “repeat prescribing,” and “high price tag.” What’s new is the recommendation to broaden the definition of heath. Many years ago I wrote an article against the 1946 WHO definition of health. “Health,” it said, “is a state of complete physical, mental and social well-being and not merely the absence of infirmity.” The WHO eventually got rid of that preposterous notion, but the medicalization of just about any and all human complaints, physical and mental, has been underway for decades. Personalized medicine opens up some new horizons for that ubiquitous virus.

Neither the Affordable Care Act nor the market-oriented alternatives offered by conservatives who would like to overthrow it bring into their calculations the likely economic impact of personalized medicine. Perhaps it has just been overlooked. But it just the kind of technological development that is most likely to bring distress and maybe havoc to our health care system. The danger is that all the health benefits and the business opportunities it portends will turn out to be true.

No combination of obvious public benefits and industry profits is more potent than that. It could turn out to be good “value for money,” but as I contended in an earlier blog that kind of value is not necessarily affordable. How to say no to those medical technologies that everyone likes for their personal health and industry profits, but that may turn out to be outrageously expensive for the health care system, is the final and most vexing dilemma about cost controls.

My short answer to that dilemma is this: there will always be new and usually expensive ways of bringing us health benefits we desire. We will all get sick of something or other no matter how great our medical progress, and there will no less always be ways for medical research and technological innovation to combat our illnesses. But at some point we will have to acknowledge that it is ultimately a losing game – at least if one is interested in controlling health care costs. The medical bubble is bursting.

Daniel Callahan, co-editor of the Health Care Cost Monitor, is the author most recently of Taming the Beloved Beast: How Medical Technology Costs are Destroying Our Health Care System.

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5 Trackbacks

  1. By Headline Scan « Health Watched on May 18, 2011 at 1:38 pm

    […] Can We Afford Personalized Medicine? […]

  2. […] to PriceWaterHouseCoopers, the personalized medicine market is expected to reach $450 billion by 2015, Duncan said. And an increasing number of companies are going after the opportunities. The field […]

  3. […] to PriceWaterHouseCoopers, the personalized medicine market is expected to reach $450 billion by 2015, Duncan said. And an increasing number of companies are going after the opportunities. The field […]

  4. […] to PriceWaterhouseCoopers, the personalized medicine market is expected to reach $450 billion by 2015, Duncan said. And an increasing number of companies are going after the opportunities. The field […]

  5. […] medicine is the place where retail and healthcare collide. It’s also a market that’s about to double in size to $450 billion by 2015. Retail CIOs will need to enable new technologies in brick-and-mortar […]

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