The High Cost of Pharmacogenetic Products

In addition to exclusion from treatment and the creation of new orphan populations, other significant justice issues about access to care are raised by the development of pharmaco-genetic-based therapies. Although there may be important cost savings for the industry from improved drug discovery and development, it seems highly likely that pharmacoge-netic- based drugs will have narrower and more restricted markets. This may mean that it is harder for these products to become blockbusters, with sales exceeding $1 billion a year. In an analysis of the economics of pharmacogenetics Danzon and Towse conclude.

The problem of patient fragmentation that results from genetic testing is most appropriately addressed by adjusting prices to reflect higher benefits of targeted treatment. However, two potential problems remain: 1. Payers may be reluctant to adjust prices upwards for targeted treatments ... Doing so requires companies and payers to use economic evaluation to identify the higher value associated with such targeting. 2. If genetic testing reduces populations eligible for treatment, but does not significantly reduce the costs of R&D, and if prices are not adjusted, then an increasing number of potential treatments may be shelved for lack of commercial viability at normal payer thresholds (27).

This suggests that there will be significant pressure to increase the price of pharma-cogenetic products. It is widely anticipated that new pharmacogenetic-based drugs will be expensive (15,17,18). Marketing strategies based on the use of efficacy data might also lead to the premium pricing of more effective new products and the creation of niche markets, where patients and providers pay more for improved therapy.

Several social issues arise from this. First, there is a need for cost-effectiveness and cost-benefit analysis of various pharmacogenetic applications to assess their potential impact on the costs of healthcare, and also on industry research and development (R&D) costs, pricing and incentives to innovate. Carefully balanced policies will have to be adopted to promote innovation and the creation of new medicines, while enabling healthcare payers and providers to reap the benefits. Without cost-benefit data there is a danger that providers may not be willing to purchase these more expensive products. Second, if pharmacogenetic products are significantly more expensive than conventional medicines, this will raise issues about the distribution of access to the better treatment they offer. The National Health Service (NHS) in the United Kingdom may be unable to afford to give all patients access to these new drugs. This may lead to rationing. In some cases these products may be only available to those who can afford to use private health providers. Similarly, on a global scale, developing countries may have little access to these improved therapies.

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