Genetically targeted therapies create opportunities to do business in new ways

Pharmacogenomics, the study of genetic variability in the way individuals respond to medicines, has the potential to spark a major, technology-driven restructuring of the health care and pharmaceuticals industries, according to a commentary published in the current issue of Nature Medicine by faculty of the Indiana University Program in Pharmacogenomics, Ethics, and Public Policy.

Commentary co-authors Barbara Evans, Ph.D., J.D., David Flockhart, M.D., Ph.D.,and Eric Meslin, Ph.D., see pharmacogenomics, which matches drugs to an individual’s specific genetic makeup, as having major implications for the way health care will be delivered and financed in the future.

Pharmacogenomics has the potential to reduce “trial and error” in health care through tests that can identify, in advance, which patients are likely to have a good response to a particular drug therapy. The goal is to target specific drugs at specific patients, using genetic information to increase treatment successes and reduce adverse reactions.

The authors note that many of the health care industry’s business norms date to an earlier era when prescribing was more an art than a science. “For example, the usual practice today is that patients and insurers must pay, even if a treatment fails to work. As well-targeted therapies become more commonplace, people may start to question that rule,” said Dr. Evans, a senior scientist in the Indiana University School of Medicine’s Department of Medicine. She is an economist and attorney has been heavily involved over the past twenty years in restructuring of regulated industries in the U.S., Russia, Central Asia, and the Middle East.

The authors expect pressure in coming years for health care providers and drug manufacturers to bear a larger share of the costs associated with drug-treatment failures that occur when therapies are not well targeted.

According to Dr. Evans, it has been estimated that only 60% of prescriptions written produce the desired therapeutic benefits in patients. The remaining 40% either fail to produce a positive response or occasionally harm the patient.

“In 2002, overall prescription drug spending in the U.S. was approximately $162 billion. A back-of-the-envelope calculation suggests that up to $65 billion (or 40% of this total) may have been spent on drugs that, for one reason or another, did not help the patient get well. Pharmacogenomics only addresses some of these treatment failures–those that have genetic roots. Still, the numbers are so large that even a small improvement in targeting could save billions of dollars,” said Dr. Evans,

Restructuring is contentious in any industry but it presents especially tough challenges in health care, where change presents complex ethical, social, and community concerns, the authors note. Even when change is beneficial for the industry as a whole, there can be windfall gains and losses for individual stakeholders, and prospective losers may have incentives to resist. Experience in other industries shows that daunting problems of this type can be successfully resolved. According to Dr. Evans this typically requires careful dialogue among industry stakeholders and skillful regulatory policy, to ensure that the costs and benefits of change are shared in a fair way among all industry participants.

The co-authors are members of the Indiana University Center for Bioethics and its Program in Pharmacogenomics, Ethics, and Public Policy. PEPP seeks to clarify the ethical, economic, legal, and regulatory impacts of pharmacogenomics on clinical practice, research ethics, economic and industry structure, and legal and regulatory issues. Dr. Evans directs PEPP. Dr. Flockhart is a physician and pharmacogeneticist who heads the Indiana University School of Medicine’s Division of Clinical Pharmacology and whose current research and clinical trials activities focus on breast cancer. Dr. Meslin is director of the Indiana University Center for Bioethics and previously served as Executive Director of the National Bioethics Advisory Commission.