Getting the right drug to the right person in the right dose is definitely good for the patient. This is the one clear message from a new report released by the Deloitte Center for Health Solutions. But drug companies and payers will not realize the benefits of personalized medicine without policy changes, the report says.

 

“Personalized medicine facilitates better care and lower costs, and has the potential to benefit every major stakeholder in the U.S. system—most importantly, its patients,” says the study’s lead author Paul Keckley, executive director of the Deloitte Center for Health Solutions. 

 

The report found that consumers stand to gain the greatest return on investment within the shortest period of time. Adopting personalized medicine could generate a positive return on investment for key payers in the U.S. healthcare system, the report also found. 

 

The report appears as the Obama Administration begins to look at ways to improve patient care while reducing overall healthcare costs. The study assesses barriers and incentives for adopting personalized medicine and examines opportunities to overcome obstacles. Some of those barriers include access to capital to stimulate increased R&D and the pressure for short-term savings from health plans. 

 

 “Personalized medicine is not a promise of the future; it is fast emerging as the current state in diagnostics and therapeutics,” says Terry Hisey, vice chairman of Deloitte’s Life Sciences industry group. “The U.S. healthcare system will confront an array of challenges to expedite development to make personalized medicine a reality.”

 

To analyze the economic value of personalized medicine’s, the Deloitte team reviewed 300 articles, settling on 75 that could be used to develop a framework for return on investment. The studies were then categorized by two scenarios that might follow—altering the course of therapy or introducing a companion therapy—across a number of clinical conditions, ranging from HIV/AIDS to breast cancer. 

 

The results found that the return and time-to-yield benefit varied by scenario across each affected group, with an immediate benefit for the patient in both scenarios. Benefits for the other key groups, which includes payers, diagnostics makers, and biotechnology and pharmaceutical companies—although positive under certain conditions—were less clear. Payers’ benefits were marginal and realized only after six years.

 

Here’s how Deloitte sees the various players benefitting or not from personalized medicine:

 

•           Consumers stand to gain the greatest return on investment from personalized medicine, in the shortest amount of time. Long-term benefits outweigh initially high upfront costs of more expensive therapies and should be an incentive for adoption. Education will be critical to help consumers make informed care decisions.

 

•           Providers will benefit from the new tools offered by personalized medicine to improve patient care but reimbursement issues will need to be worked out with payers. Implementation of electronic health records will help facilitate the adoption of disease-specific standards of practice that can provide real-time data to help prioritize therapies based on potential drug interactions and patient clinical profiles.

 

•           Payers may want to factor in personalized medicine products into the equation as the employer-sponsored model evolves into a retail health insurance model, providing the opportunity to include customized products. Plans may also benefit as personalized medicine may help slow the advancement of conditions and diseases that, left untreated, result in more expensive acute care interventions and institutional care. Payers may also want government incentives to make coverage of personalized medicine more profitable.

 

•           Policymakers will need to consider incentives for commercial health plans to adopt personalized medicine by providing incentives like reimbursing these technologies, for example. They can also consider leveraging the connection between personalized medicine and the Orphan Drug Act, as well as supporting R&D tax credits or other incentives for the biopharma industry to encourage its personalized medicine development efforts.

 

•           Biopharma and diagnostic companies may need to consider strategies to address smaller markets with more targeted therapies and reduce R&D costs, as well as increase collaboration with academic and medical research organizations. Strategies to improve the cost-effectiveness of integrating drugs with companion diagnostics will also have to be implemented.