Will Precision Medicine methods benefit health plans, the pharmaceutical manufacturers industry, care providers and patients alike? This is a short version of the paper co-written with my colleagues, Ruslan Dorfman and Antoine Lefaivre. 

Healthcare systems in the developed world are well known for producing life-saving medical interventions, but they fail to deliver outcomes commensurate with costs. The macroeconomic drivers – rise in chronic conditions, empowered consumers, and cost constraints in healthcare – indicate that a global demand for patient-centric, value-creating health solutions will continue to grow. In Oliver Wyman’s published paper – Volume to Value Revolution – the authors, Tom Main and Adrian Slywotsky, make a case that new, patient-centred population health models will cause more than $1 trillion of value to shift from old models to new, consequently creating more than a dozen new $10 billion, high-growth markets.

Precision Medicine[1] (PM) is a disruptive innovation tailoring medical treatment to patients’ individual characteristics. PM employs diagnostics and analytics/software to classify individuals within subpopulations that differ in their susceptibility to a particular disease, or in their responses to a specific treatment. Preventive or therapeutic interventions can then be aimed toward those who will benefit, sparing expense and side effects for those who will not.


The PM approach initially evolved in an effort to demonstrate the efficacy of new oncological medications. New biological therapies provided remarkable clinical response but only in a fraction of treated patients. This created pressure on pharmaceutical companies to demonstrate value for money, and led to the development of companion diagnostics for many novel biologics. Almost half of new therapies in late stages of regulatory approval have companion diagnostics[2].

Pharmacogenetics and pharmacogenomics (collectively PGx) represent an evidence-based approach for personalized treatment optimization that leverages established biomarkers for predicting drug response. Because PGx is an evidence-based approach, targeting patients most likely to benefit from a given treatment, it creates a persuasive story communicating product value to payers, and facilitating market adoption. Ample clinical evidence links genetic variations in drug metabolic enzymes and transporters to variability of drug response in the general population. Leading healthcare providers in the USA are adopting PM to improve quality and reduce cost of care[3].


Now PGx is expanding beyond oncology. PillCheck is a digital health platform delivering PGx insights for chronic complex conditions. Complex diseases arise from numerous genetic and environmental factors working together. For example, inflammatory diseases, such as gout, Crohn's disease, and ulcerative colitis are early onset, chronic inflammatory diseases, which have no known cure. They are multi-factorial conditions, having a strong genetic component. Moreover, the management of these diseases is complex and involves a plethora of drugs requiring frequent adjustment and monitoring to minimize toxicity and non-response.

The FDA has been adding recommendations for PGx testing to drug labels[4] for commonly prescribed medications, many of them now generics, such as metformin, SSRIs, pro-opioids, and cardiologic medications. PillCheck, is among a handful of innovative platforms offering genetic tests and analytics with the aim of accelerating the medication adjustment process: these tests identify predictable genetic factors that influence a person's medication responses.  Some software tools follow the ‘gold standard’, drug dosage guidelines from the FDA drug monographs and Clinical Pharmacogenetic Implementation Consortium (CPIC), while others use proprietary markers.

Now days with the payer, rather than the prescriber, in the driver’s seat, new and useful interventions achieve market adoptions when both are in place: clear and appropriate health economic evidence, as well as effective data sharing mechanisms.

Statistics show that 1-in-4 primary care patients in North America is prescribed at least one medication that will cause an adverse drug reaction due to genetic variability in drug metabolism. But a stand-alone genetic test is not enough. To be truly useful, PGx insights need to be available to the patient, to his “circle of care.” This way they support the business intelligence and analytics needs of payers.

Can life sciences companies deliver more effective treatments to patients in the era of precision medicine? What will it take to integrate research, population analytics, and communications into a seamless solution for patients and their healthcare providers? Or will this become a new tug of war for diminishing healthcare $ between payers and pharmaceutical companies?

Precision medicine can deliver significant value to both the pharmaceutical industry and payers alike. This value comes in part from providing evidence-based and context-specific decision support that optimizes health outcomes. In essence, broad-based deployment of PM will go beyond data gathered from randomized controlled trials. Payers seek to optimize costs in real world clinical practice. The pharmaceutical industry seeks to engage patients early, and build brand loyalty and strengthen the relationship with payer by demonstrating better value for the “whole person”.

Ultimately, it is the patient who benefits from innovations such as PGx testing the most. Many people go to Dr. Google to read up on potential side effects after receiving a prescription. And after reading up, over 20% simply won’t use the drug for fear of potential side effects. Their chronic condition remains uncontrolled and poorly managed.

From the Payer’s perspective, in order to truly impact population health, we have to start with individuals: Only after positively influencing Jane or John Doe can we anticipate real impacts upon a population’s total health. We’ve heard so many times from PillCheck customers, that having their own PGx report provides them with the assurance of being prescribed the right medication, at the correct dosage, and thereby avoiding adverse drug reactions. The much-discussed ‘patient engagement’ goes through the roof when consumers have their PillCheck report and can discuss it with their doctor or pharmacist. There is a paradigm shift underway. The old ‘medical model’ – patients simply complying with the decisions of providers – is moving towards person-centered care.

This shift is most visible in primary care. Compared to other settings, primary care tends to involve fewer procedures. It involves advice and support to help patients stay healthy, modify their health care behaviours, cope with anxiety, and navigate complicated care routines for chronic problems.

With PillCheck insights, clinicians can establish optimal treatment strategies and limit inappropriate prescribing of many drug classes, including opioids, statins and others. This personalized approach to prescribing leads to faster recovery times and fewer side effects. The financial benefits accrue to the payer.


PGx can be a powerful tool for building a product value argument that takes into account: prevalence of responders (or non-responders), health resource utilization, and current practice patterns.

The frequency of poor responders requiring drug switches varies from drug to drug. For example 16% of Caucasians, and up to 30% of Asians, are considered poor responders to clopidogrel and will benefit from ticagrelor (Brillinta) or prasugrel (Effient). We estimate that there were about 2 million clopidogrel prescriptions filled in Canada last year. A conservative estimates puts 320,000 clopidogrel users at high risk of stroke and heart attack due to genetic variations in the CYP2C19 enzyme.  At the same time, only 166,000 patients were on Effient or Prasugrel, alternative treatments for clopidogrel-non-responders, indicating that the market share for these two medications is about half of what it should be.  PGx testing is recommended for patients prescribed clopidogrel, and would clearly result in a better health outcome.

A recent study examined the health-economic impact of PGx testing. Patients who are poor and intermediate CYP2C19 function and are treated with clopidogrel incur higher cardiovascular event rates than patients with normal CYP2C19 function. Events include myocardial infarction, stroke, and stent thrombosis, following ACS. The model developed by SAMUEL G. JOHNSON, PharmD, Kaizer Permanente, shows that when all patients received genotyping, clopidogrel market share was reduced from 93% to 73%, prasugrel increased to 19.3%, and ticagrelor increased to 7.7%. Total estimated cost differences when all possible patients were genotyped included annual savings of roughly $444,852. [5]

Payers struggle with reimbursement decisions for new branded medications, and with the design of tiered drug plans.  While tiered drug plans tend to reduce drug spending, one key concern is that these plans may reduce utilization of both essential and non-essential drugs, thereby creating additional barriers for patients to access the most optimal care.

 For example, according to current guidelines in Ontario[6], to qualify for Effient and Prasugrel a plan member or patient has to “fail” clopidogrel which is measured by the patient experiencing a significant cardiovascular event that requires additional medical care and increased disability costs. The unfortunate clinical outcome and associated costs could have been avoided with a PGx test.

A $500, pharmacogenetic test can identify a subset of patients that should switch to a more effective, albeit more costly, therapy. Who then should cover the cost of this PGx test? Payers argue for the manufacturer to cover the cost of testing, while the pharmaceutical companies are reluctant to pay for a test that potentially shifts patients to a competitor’s drug.


Who is the key beneficiary of PGx testing?


Aside from the optimal clinical outcome enjoyed by a plan member or patient, it is the health plan sponsor that benefits the most; the sponsor typically assumes the bulk of a drug’s cost. Although a patient will occasionally require a higher priced drug, if that patient’s disease is better managed the employer benefits from improved productivity and reduced disability costs.


Mental Health, more and more of an issue for employers, provides a good example of how PM can make a significant difference in patient outcomes. Today, over 24 different antidepressants and antipsychotic medications carry the PGx labeling.

Citalopram is the first line of therapy for depression, yet only 30% of patients respond at regular dose. Furthermore, up to 30% of Caucasians carry genetic variations that make them resistant to citalopram. The majority will require higher dose or alternative therapy. It is well known that finding the optimal therapy can take many weeks and even months, leading to significant disability costs and avoidable patient suffering from uncontrolled symptoms. PGx testing can quickly  guide healthcare providers and patients to more effective therapy. Prospective clinical trials have demonstrated the value of PGx-guided therapy on patient outcomes[7]. These valuable insights provided for treatment-resistant patients lead to faster recovery times, and reduced physician visits for dose adjustment and drug switches[8].

In addition, PM has an important impact on patients’ adherence to treatment[9]. Concerns about adverse reactions to medication are the leading reason for patient-initiated discontinuation of therapy. Fear of side effects also discourages patients to initiate therapy. Up to 50% of prescriptions go unfilled, even when the cost of medication is not an issue. PGx testing provides additional assurances to patients that the therapy will be safe and effective.

Medicare and other insurance providers in the USA already cover the costs of PGx testing for high-risk medications including clopidogrel[10], [11]. However, higher US costs, differences in coverage policies, and cumbersome reimbursement procedures discourage healthcare providers from utilizing the available codes. Alternative reimbursement models including value-based pricing and pay-for-performance, create a more clear business case for PGx testing[12].

Canadian insurers are not in a rush to take on Precision Medicine, essentially because they are not yet concerned about optimal drug therapy and are not responsible for the cost of physician visits and hospitalizations, which narrows the economic justification considerably. Citing unproven ROI and privacy concerns, Canadian plan administrators sometimes fail to distinguish between disease-diagnostic and PGx testing. The latter has no impact on identification of inherited disease, and no impact on health or life insurance.  

Lack of physician awareness is another barrier for broad scale adoption of PGx testing, but that is changing. A recent survey by Medco in the US clearly indicated that 75% of physicians surveyed are ready to use PGx. The biggest driver is patients demanding better health outcomes[13], A UBC spinoff company called GenXys, in which local Family Health lead, Dr. Dawes has a leadership role and financial interest, is conducting a pilot in BC.

Finally, plan sponsors’ need to control escalating health plan costs is putting pressure on insurance carriers to be more innovative and engaged, and to eventually adopt evidence-based solutions such as pharmacogenetics.


Access to and sharing of healthcare information is the true innovation driver behind Precision Medicine.


Given the lack of awareness and knowledge, providing PGx test results to patients in a vacuum will not deliver the desired result. These test results must be shared amongst healthcare providers and patients to ensure coordinated and patient-centric drug prescribing. In the absence of significant Health IT integration: Electronic Medical Records (EMR) with Pharmacy Information systems (PIS), with the adjudication engines managed by PBM’s and with Personal Health Records (PHR), the benefits of PGx testing will not be fully realized.


As new evidence reveals the financial burden of drug-drug and drug-gene interactions on health system utilization, regulatory bodies and public payers may decide to encourage or even enforce evidence-based prescribing practices among primary care practitioners and pharmacists. The latter will require additional investment in the time healthcare providers spend on individual-based health assessments.  



How can the value of Precision Medicine be maximized? Risk-sharing models for better population health management


We believe that within five years, healthcare professionals will be required to identify and prevent drug–drug and drug-gene interactions both for patient safety and healthcare spending purposes. PillCheck, our company's PGx application is a software platform that performs bioinformatics analysis and enables sharing of genetic data between clinical diagnostic labs, patients, and healthcare providers. 


Precision Medicine will eventually become the standard of care and will be made available to plan members who can benefit from personalized and preventive disease management. GeneYouIn has developed a health economic model demonstrating that PillCheck can reduce both drug and disability costs. By facilitating the sharing of information between physicians, pharmacists, case managers and plan members PillCheck delivers incremental value by doing away with existing silos in patient care, and enabling patient empowerment thus extracting synergies beyond the direct benefit of medication optimization.

At the recent CPBI conference[14] Mike Sullivan (Cubic Health) and Loretta Kulchycki (Great West Life) each highlighted correlations between spending on medications and corresponding disability costs. It is essential for both payers and the pharmaceutical industry to understand and embrace the impact of Precision Medicine because it benefits both. While the drug spend might marginally increase for some patients, the optimal drug therapy will create substantial savings on disability costs.  By taking a more holistic view, payers will finally be able to obtain true value for their health plan money stemming from Precision Medicine.


Imagine prescribers having at their fingertips, a comprehensive drug response profile for every patient.


In addition, a more rational drug formulary would include built-in prescription management algorithms enabling unbiased, evidence-based prescribing. Such programs could be funded by a consortium of pharmaceutical manufacturers in the same manner that brand loyalty programs are managed by third party marketing organizations for pharmacists and physicians.


Considering the cost of introducing a 5th or 6th market entry product, pharmaceutical manufacturers might rather consider co-funding Precision Medicine programs in order to facilitate their reimbursement.  As an example: statin-induced muscle pain is reported by 18% of patients on simvastatin or atorvastatin. Approximately 5% of patients with high cholesterol levels are at high risk of severe statin-induced muscle wasting and kidney failure, and considered statin-intolerant. These patients need alternative treatment to mitigate risk of fatal heart disease.  

Several companies have developed PCSK9 inhibitors that can help statin-resistant patients to control the risk of heart disease. The PSCK9 inhibitors such as Evolocumab (Amgen), alirocumab (Sanofi/Regeneron), and bococizumab (Pfizer) represent alternatives for high-risk patients. These medications should be targeted to specific patients and pharmaceutical manufacturers will have to find a means to identify the small subset of patients who will benefit from the more expensive treatment.

A $500 PillCheck tests for multiple PGx variations, including patients that carry SLCO1B1 mutations. With PillCheck report doctors can target treatment to patients with hypercholestolemia who are at high risk of statin-induced rhabdomyolysis, and thus easily identify patients who qualify for new biologics, such as Evolocumab. Based on population frequency of mutations we estimate that 5-14% will be carrying two mutations and would benefit from an alternative treatment to a statin.


Variations in the SLCO1B1 gene have been linked to a risk of statin-induced myopathies, particularly for patients carrying two loss-of-function alleles. These patients cannot tolerate even low doses of rosuvastatin (Crestor), although rosuvastatin is associated with the lowest rates of this adverse side effect.


In this example, by co-funding Precision Medicine initiatives for patients with heart disease, pharmaceutical manufacturers can help create a cost-effective path to simultaneous screening for multiple markers. Patients at high risk of developing statin-induced myopathy can be identified as candidates for newer antiplatelet medications.


Broad based utilization of Pharmacogenetic testing clearly delivers better healthcare experience for patients, value for money evidence to support drug spend and means to more effective and better targeted marketing for the pharmaceutical industry.


In closing then, it is important to stress the win-win-win nature of Precise Medicine adoption. The payer is rewarded for their foresight in orienting their plans to leverage the savings on offer in reduced drug and disability costs. Providers also reap savings rewards by streamlining their operations through integrated and better targeted care delivery. Finally, perhaps the biggest winner of all is the patient who is lifted out of the status quo of trial-and-error style treatment prescriptions.



[1] http://www.nih.gov/precisionmedicine/

[2] http://www.ncbi.nlm.nih.gov/pubmed/19300459


[4] http://www.fda.gov/drugs/scienceresearch/researchareas/pharmacogenetics/ucm083378.htm

[5] http://amcp.org/JMCP/2015/July/19841/1033.html


[7] http://www.ncbi.nlm.nih.gov/pubmed/25710119

[8] http://www.ncbi.nlm.nih.gov/pubmed/24018772

[9] http://www.nature.com/tpj/journal/v13/n6/full/tpj201333a.html

[10] http://www.mdpi.com/2075-4426/2/4/201

[11] http://www.ncbi.nlm.nih.gov/pubmed/20205056

[12] http://www.ncbi.nlm.nih.gov/pubmed/20415556

[13] http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2672358/

[14] https://www.cpbi-icra.ca/Events/Details/National/2015/05-25-FORUM-2015-Defining-Our-Future/FORUM-2015---Sessions

AuthorVeronika Litinski