|Adoption Of Personalized Medicine May Yield Significant ROI According To Deloitte
As the new administration examines the potential
investment in targeted therapies that utilize personalized medicine to
improve patient care, a new report released by the Deloitte Center for
Health Solutions found significant opportunities for the adoption of
personalized medicine to produce a positive return on investment (ROI)
across key stakeholders in the U.S. healthcare system.
The report, "Achieving ROI in Personalized Medicine:
Barriers, Incentives and Pathways to Successful Commercialization,"
also found that consumers stand to gain the most significant ROI
opportunity within the shortest time period.
"Personalized medicine is not a promise of the future;
it is fast emerging as the current state in diagnostics and
therapeutics," said Terry Hisey, vice chairman and U.S. industry leader
for Deloitte LLP’s life sciences industry group. "The U.S.
healthcare system will confront an array of challenges to expedite
development to make personalized medicine a reality. Our report
examines opportunities to overcome these obstacles, from access to
capital to stimulate increased research and development tohow to
justify coverage by health plans often pressured for short-term
Assessing the barriers and incentives for advancing the
adoption of personalized medicine, the Deloitte report, "The ROI for
Targeted Therapies: A Strategic Perspective," provides an analysis of
personalized medicine’s economic value proposition. It examines
the importance of ROI for multiple stakeholders — consumers,
diagnostic companies, pharmaceutical and biotechnology companies and
Deloitte developed a framework that factored in the ROI
for personalized medicine by examining case studies categorized by two
scenarios — altering the course of therapy or introducing a
companion therapy — across a number of clinical conditions,
ranging from HIV/AIDS to breast cancer. The results of the analysis
found that the ROI and time to yield benefit varied by scenario across
each stakeholder group.
According to the report:
- The literature review of two clinical scenarios found
that all stakeholder groups experienced a positive ROI under certain
- Consumers consistently experienced a positive ROI across all scenarios.
- Payors received only a marginal benefit, and that was after six years.
"Personalized medicine facilitates better care and lower
costs, and has the potential to benefit every major stakeholder in the
U.S. system — most importantly, its patients," added Paul
Keckley, executive director of the Deloitte Center for Health
Highlights of key stakeholder implications found in the report include:
- Consumers stand to gain the greatest ROI from
personalized medicine, often within the first year. However, upfront
costs will likely be required because these therapies may be more
expensive than conventional treatments. Long-term benefits of
personalized medicine create an incentive for adoption, although
education will also be critical to help consumers make informed care
- Providers will benefit from the new tools offered by
personalized medicine to improve patient care; however, reimbursement
issues will need to be worked out with payors. Additionally, as
providers implement electronic health records, new decision-support
tools will help facilitate the adoption of disease-specific standards
of practice that can provide real-time data to help prioritize
therapies based on potential drug interactions and patient clinical
- Payors may want to factor in personalized medicine
products into the equation as the employer-sponsored model evolves into
a retail health insurance model, providing the opportunity to include
customized products. Plans may also benefit as personalized medicine
may help slow the advancement of conditions and diseases that, left
untreated, result in more expensive acute care interventions and
Additionally, they may also desire government subsidies,
premium tax reductions and abatements to make coverage of personalized
medicine more profitable.
Policy makers will need to consider incentives for
commercial health plans to adopt personalized medicine by leading by
example (for example, reimbursing these technologies). They can also
consider leveraging the connection between personalized medicine with
the Orphan Drug Act, as well as supporting R&D tax credits (or
other strategies) for the biotechnology/pharmaceutical industry to
encourage its personalized medicine development efforts.
Address: Deloitte Center for Health Solutions, 555 12 St. NW, Suite 500, Washington DC 20004; (202) 879-5600, www.deloitte.com.