Genomic Medicine: Impact on Overall Medical Cost

From an op-ed in the Boston Globe last month by Michael Leavitt (HHS Sec in last administration) and Professor Raju Kucherlapati of Harvard Medical School:  

A woman with atrial fibrillation, a heart condition, is prescribed the widely used blood-thinning drug warfarin. A $350 genetic test is performed, looking for variations in two specific genes that affect the body's metabolism and response to the drug. Combined with other factors, the test indicates a proper dosage range for her. Thus, with a test that looks at her genetic profile, she is prevented from suffering uncontrolled bleeding or life-threatening blood clots and risk of stroke that can accompany the use of this powerful drug...

In the case of warfarin, for example, adverse events related to dosage problems make this drug a leading cause of drug-related emergency room episodes. More accurate dosing, enabled by a relatively low-cost genetic test, might save as much as $1 billion per year while delivering better-quality care and better health.

[The] decision model evaluated the cost-effectiveness of genotype-guided warfarin dosing for patients with nonvalvular atrial fibrillation and found that for the standard base case (a 69-year-old man with no contraindications to warfarin therapy and the current cost of genotyping of about $400), genotype-guided dosing costs $170 000 more per quality-adjusted life-year gained than standard warfarin dosing.

What's the truth?

The diagnostic and pharmaceutical companies right now price based on the value of a new product.  If society has decided that it is willing to pay $50,000 per Quality Adjusted Life Year (QALY), it's not likely that many vendors will sell their new products at a price that would allow us to gain incremental benefit AND also save money.

The good news is that prices tend to come down over time -- and come down faster and further if there are competitors.  The bad news is that some of our leaders are counting on cost-SAVING from new technology, which is not likely to be realized quickly with our current economic model.