Cost-Effectiveness of Precision Medicine
One of the critical questions surrounding precision medicine is its cost-effectiveness. Can a personalized approach deliver on the Institute for Healthcare Improvement (IHI’s) aims of improving outcomes while controlling, or even reducing, healthcare costs? Let’s explore how precision medicine approaches fare compared to conventional practice in terms of cost-effectiveness, highlighting key findings from the literature.
Evaluating Cost-Effectiveness: Frameworks and Metrics
When assessing cost-effectiveness in healthcare, most studies use the metric of quality-adjusted life years (see definition of QALYs), which incorporates both the quality and the quantity of life gained from healthcare interventions. The incremental cost-effectiveness ratio (see definition of ICER) is another commonly used metric, reflecting the additional cost per QALY gained. For example, if a new intervention, such as medication, costs $5,000 more than the previous standard treatment, but provides 2 extra quality-adjusted life years (QALYs), the ICER would be $2,500 per QALY gained, showing the cost per unit of additional health benefit.
The following scenarios were evaluated against the reasonable standard of care. Thresholds for cost-effectiveness are often set between $50,000 and $150,000 per QALY in the United States. This range represents the amount that is generally considered a reasonable cost to gain one additional year of life in perfect health. With these metrics in mind, we can peer into how precision medicine approaches may deliver better health outcomes without disproportionate costs.
Examples from the Literature
1. Non-Small Cell Lung Cancer (NSCLC)
Targeted therapies that account for specific genetic mutations in cancer cells have been a major focus of precision medicine. A well-known example is the use of an epidermal growth factor receptor (EGFR) inhibitor (gefitinib) for patients with non-small cell lung cancer (NSCLC) [1]. In two follow up studies, researchers assessed the cost-effectiveness of genetic testing and targeted therapy [2,3]. The researchers found the use of EGFR inhibitors may result in improved progression-free survival and a higher quality of life. The ICER for gefitinib versus conventional chemotherapy was approximately $110,000 to $150,000 per QALY, which is at the upper end of our generally accepted cost-effectiveness threshold.
2. Next Generation Sequencing (NGS) for Breast Cancer Risk
A number of cost effectiveness analysis studies have been published for women with breast cancer or a family history of breast and ovarian cancer [4,5]. Collectively, the studies provide evidence for NGS for BRCA mutations in high-risk populations that may lead to early detection and prevention in the offspring of women affected by breast cancer, potentially reducing the incidence of breast and ovarian cancer. The researchers found that cost savings from avoidance of treatment for breast cancer offset the cost of the genetic tests and preventive interventions, particularly in women under 50, demonstrating a favorable ICER well below $50,000 per QALY [5].
3. Thrombotic disease: Warfarin and Clopidogrel
Multiple systematic reviews have supported a cost-efficacy or cost savings of pharmacogenetic (PGx)–guided treatment for drugs with Clinical Pharmacogenetics Implementation Consortium (CPIC) guidelines [6,7]. Most of the studies published included those on Warfarin and Clopidogrel and compared PGx-informed treatment to conventional management, demonstrating cost-efficacy. References to these studies have been provided at the end of the text.
Addressing the Cost Concerns
While precision medicine approaches may show potential for improving health outcomes while providing cost savings, its implementation is not without challenges. The upfront costs for accelerating research, advanced testing, data analysis, algorithm development, and targeted treatments are significant. However, long-term benefits, such as reduced hospitalizations, fewer adverse drug events, and improved patient outcomes, show promise in balancing these costs in the future.
As healthcare technology seeks to become more widespread and accessible, the costs of precision diagnostics and treatments are likely to decrease. In the coming years, we can expect advances in precision medicine tools, technology and an increased focus on analyzing complicated data sets that may enhance the cost-effectiveness of precision medicine by optimizing treatment pathways for all patients.
References
Maemondo M, Inoue A, Kobayashi K, et al. Gefitinib or chemotherapy for non-small-cell lung cancer with mutated EGFR. N Engl J Med. 2010 Jun 24;362(25):2380-8.
Maniwa T, Yoshihara K, Kataoka N, et al. Cost-effectiveness of gefitinib versus chemotherapy for patients with non-small cell lung cancer with mutated epidermal growth factor receptor. Lung Cancer. 2013 Jan;79(1):59-64.
Kohn CG, Chamoun M, Moghadamnia M, et al. A clinical and economic evaluation of EGFR-TK mutation testing and treatment with erlotinib or gefitinib in the first-line setting in advanced non-small-cell lung cancer in the United States. Lung Cancer. 2015 Feb;90(1):61-9.
Tuffaha HW, Mitchell A, Ward RL, et al. (2018). Cost-effectiveness analysis of germ-line BRCA testing in women with breast cancer and cascade testing in family members of mutation carriers. Genet Med. 2018 Mar;20(9):985-994.
Li Y, Arellano AR, Bare LA, et al. (2017). Cost-effectiveness of multigene testing for all patients with breast cancer. JAMA Oncol. 2017 Jun;3(6):765-771.
Morris SA, Alsaidi AT, Verbyla A, et al. Cost Effectiveness of Pharmacogenetic Testing for Drugs with Clinical Pharmacogenetics Implementation Consortium (CPIC) Guidelines: A Systematic Review. Clin Pharmacol Ther. 2022 Dec;112(6):1318-1328.
Verbelen M, Weale ME, Lewis CM. Cost-effectiveness of pharmacogenetic-guided treatment: are we there yet? Pharmacogenomics J. 2017 Oct;17(5):395-402.
