Jump to ContentJump to Main Navigation
Show Summary Details
More options …

Forum for Health Economics & Policy

Editor-in-Chief: Goldman, Dana

2 Issues per year


CiteScore 2016: 0.30

SCImago Journal Rank (SJR) 2016: 0.140
Source Normalized Impact per Paper (SNIP) 2016: 0.098

Online
ISSN
1558-9544
See all formats and pricing
Online
Institutional Subscription
€ [D] 465.00 / US$ 627.00 / GBP 381.00*
Individual Subscription
€ [D] 99.00 / US$ 149.00 / GBP 80.00*
*Prices in US$ apply to orders placed in the Americas only. Prices in GBP apply to orders placed in Great Britain only. Prices in € represent the retail prices valid in Germany (unless otherwise indicated). Prices are subject to change without notice. Prices do not include postage and handling if applicable. RRP: Recommended Retail Price.
More options …

The Value of Diagnostic Testing in Personalized Medicine

Dana P. Goldman
  • Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles, CA, USA
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
 / Charu Gupta / Eshan Vasudeva / Kostas Trakas / Ralph Riley / Darius Lakdawalla
  • Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles, CA, USA
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
 / David Agus
  • Center for Applied Molecular Medicine, University of Southern California, Los Angeles, CA, USA
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
 / Neeraj Sood
  • Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles, CA, USA
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
 / Anupam B. Jena / Tomas J. Philipson
  • Corresponding author
  • Harris School of Public Policy, The University of Chicago, 1155 East 60th Street, Chicago, IL 60637, USA
  • Email
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
Published Online: 2013-09-14 | DOI: https://doi.org/10.1515/fhep-2013-0023

30,00 € / $42.00 / £23.00

Get Access to Full Text

Abstract

Personalized medicine – the targeting of therapies to individuals on the basis of their biological, clinical, or genetic characteristics – is thought to have the potential to transform health care. While much emphasis has been placed on the value of personalized therapies, less attention has been paid to the value generated by the diagnostic tests that direct patients to those targeted treatments. This paper presents a framework derived from information economics for assessing the value of diagnostics. We demonstrate, via a case study, that the social value of such diagnostics can be very large, both by avoiding unnecessary treatment and by identifying patients who otherwise would not get treated. Despite the potential social benefits, diagnostic development has been discouraged by cost-based, rather than value-based, reimbursement.

Keywords: diagnostics; personalized medicine; social value; value-based reimbursement

References

  • Aspinall, M. G. and R. G. Hamermesh (2007) “Realizing the Promise of Personalized Medicine,” Harvard Business Review, 85(10):108–117.Google Scholar

  • Brune, K., H. A. Katus, J. Moecks, E. Spanuth, A. S. Jaffe and E. Giannitsis (2008) “N-Terminal Pro-B-Type Natriuretic Peptide Concentrations Predict the Risk of Cardiovascular Adverse Events from Antiinflammatory Drugs: A Pilot Trial,” Clinical Chemistry, 54(7):1149–1157.CrossrefWeb of SciencePubMedGoogle Scholar

  • Carlson, J. J., L. P. Garrison Jr and S. D. Sullivan (2009) “Paying for Outcomes: Innovative Coverage and Reimbursement Schemes for Pharmaceuticals,” Journal of Management Care Pharmacology, 15(8):683.Google Scholar

  • Davis, J.C., L. Furstenthal, A. A. Desai, T. Norris, S. Sutaria, E. Fleming and P. Ma (2009) “The Microeconomics of Personalized Medicine: Today’s Challenge and Tomorrow’s Promise,” Natural Review Drug Discovery, 8(4):279–286.Google Scholar

  • Elkin, E. B., M. C. Weinstein, E. P. Winer, K. M. Kuntz, S. J. Schnitt and J. C. Weeks (2004) “HER-2 Testing and Trastuzumab Therapy for Metastatic Breast Cancer: A Cost-Effectiveness Analysis,” Journal of Clinical Oncology, 22(5):854–863.Google Scholar

  • Epstein, R. S., T. P. Moyer, R. E. Aubert, D. J. Okane, F. Xia, R. R. Verbrugge, B. F. Gage and J. R. Teagarden (2010) “Warfarin Genotyping Reduces Hospitalization Rates Results from the MM-WES (Medco-Mayo Warfarin Effectiveness Study),” Journal of the American College of Cardiology, 55(25):2804–2812.Web of ScienceCrossrefGoogle Scholar

  • Faulkner, E. (2009) “Clinical Utility or Impossibility? Addressing the Molecular Diagnostics Assessment and Reimbursement Conundrum,” Journal of Managed Care Medicine, 12(4): 42–.Google Scholar

  • Gardiner, S. J. and E. J. Begg (2005) “Pharmacogenetic Testing for Drug Metabolizing Enzymes: Is It Happening in Practice?” Pharmacogenetics and Genomics, 15(5):365.CrossrefGoogle Scholar

  • Gaughan, E. M. and D. B. Costa (2011) “Genotype-Driven Therapies for Non-Small Cell Lung Cancer: Focus on EGFR, KRAS and ALK Gene Abnormalities,” Therapeutic Advances in Medical Oncology, 3(3):113–125.Google Scholar

  • Health Advances (2010) “The Reimbursement Landscape for Novel Diagnostics.”Google Scholar

  • Hudis, C. A. (2007) “Trastuzumab – Mechanism of Action and Use in Clinical Practice,” New England Journal of Medicine, 357(1):39–51.Google Scholar

  • Institute of Medicine (2010) Policy Issues in the Development of Personalized Medicine in Oncology: Workshop Summary. Washington, DC: The National Academies Press.Google Scholar

  • Kemp, L. K., C. M. Doran, T. Vos and W. Hall (2007) “Cost-Effectiveness Analysis of Genetic Screening for the Taq1B Polymorphism in the Secondary Prevention of Coronary Heart Disease,” Expert Review of Pharmacoeconomics and Outcomes Research, 7(2):119–128.Google Scholar

  • Lakdawalla, D. N., E. C. Sun, A. B. Jena, C. M. Reyes, D. P. Goldman and T. J. Philipson (2010) “An Economic Evaluation of the War on Cancer,” Journal of Health Economics, 29(3):333–346.CrossrefGoogle Scholar

  • McCabe, L. L. and E. R. McCabe (2008) “Expanded Newborn Screening: Implications for Genomic Medicine,” Annual Review of Medicine, 59:163–175.Web of ScienceGoogle Scholar

  • McGhee, S. A., E. R. Stiehm and E. R. McCabe (2005) “Potential Costs and Benefits of Newborn Screening for Severe Combined Immunodeficiency,” The Journal of Pediatrics, 147(5): 603–608.CrossrefGoogle Scholar

  • Nelson, P. (1970) “Information and Consumer Behavior,” Journal of Political Economy, 78(2):311–329.CrossrefGoogle Scholar

  • Philipson, T. J. and A. B. Jena (2005) “Who Benefits from New Medical Technologies? Estimates of Consumer and Producer Surpluses for HIV/AIDS Drugs,” NBER Working Paper Series, No. 11810.Google Scholar

  • Psaty, B. M. and C. D. Furberg (2005) “COX-2 Inhibitors – Lessons in Drug Safety,” New England Journal of Medicine, 352(11):1133–1135.Google Scholar

  • Ruff, C. T., D. A. Morrow, P. Jarolim, F. Ren, C. F. Contant, A. Kaur, S. P. Curtis, L. Laine, C. P. Cannon and K. Brune (2011) “Evaluation of NT-proBNP and High Sensitivity C-Reactive Protein for Predicting Cardiovascular Risk in Patients with Arthritis Taking Longterm Nonsteroidal Antiinflammatory Drugs,” Journal of Rheumatology, 38(6):1071–1078.CrossrefWeb of ScienceGoogle Scholar

  • Seabury, S. A., D. P. Goldman, J. R. Maclean, J. R. Penrod and D. N. Lakdawalla (2012) “Patients Value Metastatic Cancer Therapy more Highly than is Typically shown through Traditional Estimates,” Health Affairs, 31(4):691–699.CrossrefWeb of ScienceGoogle Scholar

  • Sood, N., T. Philipson and P. Huckfeldt (2013) “Quantifying the Value of Personalized Medicines: Evidence from COX-2 Inhibitors,” Forum for Health Economics and Policy, 16(1):1–22.Google Scholar

  • The Lewin Group (2005) The Value of Diagnostics Innovation, Adoption and Diffusion into Health Care, Prepared for the Advanced Medical Technology Association.Google Scholar

  • U.S. Food and Drug Administration (2004) Safety of Vioxx: FDA Public Health Advisory. Washington, DC.Google Scholar

  • UnitedHealth Group (2012) “Personalized Medicine: Trends and Prospects for the New Science of Genetic Testing and Molecular Diagnostics,” Working Paper 7.Google Scholar

About the article

Corresponding author: Tomas J. Philipson, Harris School of Public Policy, The University of Chicago, 1155 East 60th Street, Chicago, IL 60637, USA, e-mail:

Published Online: 2013-09-14

Published in Print: 2013-09-01

For example, HercepTest is an assay to determine HER2 protein overexpression in breast cancer tissue. Only breast cancer patients who overexpress HER2 respond to therapy with Herceptin (trastuzumab), a monoclonal antibody (Hudis 2007).

Citation Information: Forum for Health Economics and Policy, Volume 16, Issue 2, Pages S87–S99, ISSN (Online) 1558-9544, ISSN (Print) 2194-6191, DOI: https://doi.org/10.1515/fhep-2013-0023.

Export Citation

©2013 by Walter de Gruyter Berlin Boston. Copyright Clearance Center

Citing Articles

Here you can find all Crossref-listed publications in which this article is cited. If you would like to receive automatic email messages as soon as this article is cited in other publications, simply activate the “Citation Alert” on the top of this page.

[1]
Victor J Dzau, Geoffrey S Ginsburg, Karen Van Nuys, David Agus, and Dana Goldman
The Lancet, 2015, Volume 385, Number 9982, Page 2118

Comments (0)

Please log in or register to comment.
Log in