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Why is Reimbursement Failing to Support Precision Medicine?

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Image credit: LiveClinic Healthcare Blog

This year I had the opportunity to be the chairperson and one of the speakers during the International Molecular Diagnostics Congress in Barcelona, an event that brought together several experts from industry, including government and other stakeholders, to discuss the recent advances in precision medicine (or personalized medicine) and its clinical and economic implications to healthcare.

As explained by the US Department of Health and Human Services, “Precision medicine is an emerging approach for disease treatment and prevention that takes into account individual variability in genes, environment, and lifestyle for each person”.

The goal of precision medicine is to create more effective and cost-efficient treatment approaches that may reduce costs, whilst demonstrating improved outcomes. Sounds great, right? No, not for the current reimbursement systems.

In spite of the strong potential benefits, reimbursement remains the #1 barrier for precision medicine, as validated unanimously at the International Molecular Diagnostics Congress in Barcelona.

So, why is this happening?

In short, there are no proper reimbursement incentives for precision medicine.

As demonstrated in the report, “The Case for Personalized Medicine - 4th Edition”, by the Personalized Medicine Coalition (PMC), there is a surprisingly low rate of effectiveness of traditional treatments. According to research, diabetes drugs are not effective for 43% of its intended patient population and for cancer, the average percentage climbs to 75%.

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Source: Brian B. Spear, Margo Heath-Chiozzi, Jeffrey Huff, “Clinical Trends in Molecular Medicine,” Volume 7, Issue 5, 1 May 2001, pages 201-204; mentioned by PMC

It is no surprise that precision medicine is driving significant value for healthcare. In fact, according to the PMC, we’ve seen a 34% reduction of the use of chemotherapy in women with breast cancer, a USD 604M savings in metastatic colorectal cancer treatment (US only) and prevention of more than 17,000 strokes per year with proper treatment. With so many benefits, what can be done to accelerate the adoption of precision medicine, considering the lack of proper reimbursement incentives?

Integration with multiple stakeholders

The success of Precision Medicine lies in the involvement and engagement of several stakeholders in healthcare and governments, that, for one, have already started to take action in the United States.

More specifically to reimbursement, we still look forward to proper incentives and business models from payers that can pay for identifying patients’ profiles and the best way to treat them.

While there have been several affordable technologies and devices launched, which drive the success of precision medicine, such as companion diagnostics, the typical reimbursement pathways force standard approaches instead of focused and customized methods.

There is a strong need for evidence, especially considering the impact of precision medicine on the entire treatment pathway. For that reason, when generating evidence and/or planning for value messages, companies should take the opportunity to engage early and identify which outcomes payers are looking for.

Each and every one of us share responsibility for the success of precision medicine, and we here at ValueConnected are here to support you in combating any and all barriers.

Want to know more about the evolving landscape of precision medicine and real case examples of reimbursement as a barrier or driver? Contact us at contact@valueconnected.com and follow us on LinkedIn to receive the latest updates.