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The Underappreciated Cost-Saving Potential of Personalized Medicine in Health Reform Debate

The current draft includes comparative effectiveness research but does not provide nearly as much funding as is needed for CER. From the headlines over the past few months, it appears that Washington is overlooking the value of personalized medicine in reducing healthcare costs. This is quite unfortunate, as the potential for savings is significant. Here are three examples of cost-saving diagnostics and some thoughts on how personalized medicine relates to health reform legislation under consideration, and what it may mean for stakeholders.

Genomic Health’s Oncotype Dx is a test with compelling cost-saving potential. It is used to predict chemotherapy benefit for patients who have node-negative, estrogen receptor positive (node-, ER+) breast cancer. By averting unnecessary chemotherapy, the test has been shown to save about $2,000 per patient. Extending this cost savings to the roughly 100,000 new cases of node-, ER+ breast cancer in the U.S. each year, this test could save the U.S. healthcare system up to approximately $200 million a year or about $2 billion over the 10-year time horizon under legislative consideration.

Another test frequently mentioned for its cost-saving potential is XDx’ Allomap. This noninvasive test is used instead of biopsies in the management of heart transplant patients after surgery. The total potential cost savings is estimated at roughly $20 million per year (about $12 million for payors as well as approximately $8 million for hospitals and transplant centers). Over the 10-year time frame being considered by legislators, the test could lead to savings of about $200 million.

These examples of cost-effective diagnostics are but a prelude to an era of cost-effective personalized medicine. The real potential is in better targeting expensive drugs to those who will benefit from them, thereby both cutting wasteful expenditure and decreasing adverse events associated with treating nonresponders.


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