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Impact of Genomics on Insurers - Part 4


Personalized Medicine

With the increasing ability to collect, store and interpret the unique genetic make-up of each individual, including their responsiveness to particular treatments, we can expect a shift from one-fits-all care towards personalized treatment regimes. Both care providers and insurers will be affected.

As explained in the first article in this series, all of us possess a unique set of variations in our genetic make-up. This wide range of genetic heterogeneity in the population leads to differences between individuals regarding the predisposition for different diseases or the responsiveness to different treatments or prevention measures.

Targeted treatment

Medical diagnosis has always included a combination of anamnesis and physical examination. However, by using imaging methods as well as lab tests – and recently also genetic testing – illnesses can increasingly be subdivided into different subtypes that require different treatments. >Moreover, each patient may respond differently to a drug in terms of the optimal dosage and in terms of side effects due to physiological differences rooted in genetic variations.

Personalized medicine aims at customizing the treatment approach to an individual patient – not by trial and error as in classical medicine but based on knowledge about the subtle molecular differences between patients. The term companion diagnostics refers to the fact that pharmaceutical companies increasingly sell drugs in combination with treatment-specific diagnostics. Diagnostic testing, including genetic sequencing, as well as testing for monitoring should therefore be considered an integral part of a personalized treatment regimen. These tests form the basis for a more accurate diagnosis and for treatment calibration as required for targeted therapies.

Treatment costs

Overall treatment costs can be reduced by personalized medicine. For instance by applying a specific treatment regimen only to those patients who will most probably respond or by tailoring drug dosage to obtain optimal treatment success while reducing side effects.

Yet, reliable studies regarding the cost savings created by companion diagnostics are only available for a small number of treatments. However, in some cases evidence has been provided that overall costs were reduced significantly.. A study focusing on the treatment of breast cancer with Herceptin found that testing patients for the overexpression of the HER2 protein reduced the costs per cured patient from around USD 70'000 to around USD 55'000 at testing costs of less than USD 400. Although more data is still needed for many other cases, we can assume that personalized medicine can potentially lead to improvements in population health and greater cost effectiveness.

Impact on insurers

The rise of personalized medicine will definitively have an impact on the insurance industry.

Health insurers will face some interesting questions on how to cover for personalized medicine. For example, genome sequencing might lead to additional costs because of medical tests and other downstream actions that might be performed based on the result of the sequencing. Therefore, insurers need to consider whether to cover a test, a treatment or a combination of both as part of a function of cost effectiveness. Currently available value assessment frameworks need to be enhanced to cover the full spectrum of changes expected due to personalized medicine.

Personalized Medicine

Personalized medicine can potentially lower consumption of ineffective treatments by non-responders and raise it for responders. Health insurers might profit from falling costs as the whole treatment scheme moves away from a trial-and-error based treatment approach to a more predictable approach that gives room for success-based pricing models. Whether the reduction of inefficiencies will lower the overall claims costs remains to be seen and needs to be closely observed.

For life insurers, the situation is even more challenging. More effective treatments and prevention measures will probably increase in longevity. But it is unclear which fraction of additional life years will be in good health or require long-term care. Therefore, different effects can be expected for the different types of coverage offered by life insurers.

Synpulse is currently conducting an online survey with insurance experts on questions such as those raised in this article. Later articles in this series will present our findings. Stay tuned!



Ingo Muschick
 Ingo Muschick
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