Better targeting of pharmaceuticals to patient's genetic profile could save around $110B annually

American Clinical Laboratory AssociationJul 25 2011

Genetic testing made possible by the mapping of the human genome can help the US cut costs and create jobs while at the same time improving survival rates for such diseases as cancer, HIV, and heart disease.

This according to Alan Mertz, president of the American Clinical Laboratory Association (ACLA): "Genetic testing is going to be a powerful and increasingly important tool in helping public and private payers get control of over-utilization and inappropriate utilization of health care resources," said Mertz in a recent presentation to the Marwood Group, a health care advisory and financial services company.

"An estimated $30 billion - $110 billion every year could be saved by using genetic tests to select the drug that precisely matches the genetic fingerprint of the patient," said Mertz.

Every year, the US spends about $300 billion on pharmaceuticals, he explained. But studies show that anywhere from 20% to 75% of patients do not respond to drug therapy, often due to drug interactions or incorrect dosing. Roughly half of the time, it is due to a molecular mismatch between the patient and the pharmaceutical, said Mertz.  

"But if we provide patients with more targeted therapy — based upon their own, unique genomic profile — we have clear potential to address some of this inappropriate care," he added.

Mertz cited examples where genetic tests both improve health outcomes and health economics:  In breast cancer, 30% of women have an overabundance of the HER2 protein. Regular chemotherapy will not help them, but a drug called Herceptin does. Genetic testing lets doctors know which patients will respond to the drug, which has been shown to reduce the risk of death by 33% and the risk of recurrence by 52%. The resulting cost savings is $24,000 per patient.

Similarly, genetic tests help physicians select the right drug for patients with metastatic colon cancer, thus avoiding ineffective treatment and reducing adverse events. "According to one estimate, the US health care system could save $700 million annually if test were done before prescribing the drug," said Mertz.

Using genetic tests to select the right dose of the most common blood thinner, warfarin, could save a whopping $1.1 billion annually, according to a 2006 Brookings/AEI estimate, Mertz said. A study from June 2010 in the Journal of the American College of Cardiology reported that use of the test could reduce hospitalizations from inaccurate dosing by 31%.

Mertz also cited a recently released Battelle report that found that between 1988 and 2010, human genome sequencing projects -- which includes genetic testing -- generated $796 billion in US economic output, $244 billion in personal income for Americans, and 3.8 million job-years of employment.

"Genetic testing offers new tools to help us manage disease and use our health care resources wisely," said Mertz. "It also opens a world of economic potential in jobs, growth, and output."