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Economic and developmental considerations for pharmacogenomic technology.

Abstract：

:The pharmaceutical industry's core business is the innovation, development and marketing of new drugs. Pharmacogenetic (PG) testing and technology has the potential to increase a drug's value in many ways. A critical issue for the industry is whether products in development should be teamed with genetic tests that could segment the total population into responders and non-responders. In this paper we use a cost-effectiveness framework to model the strategic decision-making considerations by pharmaceutical manufacturers as they relate to drug development and the new technology of PG (the science of using genetic markers to predict drug response). In a simple, static, one-period model we consider three drug development strategies: a drug is exclusively developed and marketed to patients with a particular genetic marker; no distinguishing among patients based on the expression of a genetic marker is made (traditional approach); and a strategy whereby a drug is marketed to patients both with and without the genetic marker but there is price discrimination between the two subpopulations. We developed three main principles: revenues under a strategy targeting only the responder subpopulation will never generate more revenue than that which could have been obtained under a traditional approach; total revenues under a targeted PG strategy will be less than that under a traditional approach but higher than a naive [corrected] view would believe them to be; and a traditional [corrected] approach will earn the same total revenues as a price discrimination strategy, assuming no intermarket arbitrage. While these principles relate to the singular (and quite narrow) consideration of drug revenues, they may nevertheless partially explain why PG is not being used as widely as was predicted several years ago when the technology first became available, especially in terms of pharmaceutical manufacturer-developed tests.

journal_name

Pharmacoeconomics

journal_title

PharmacoEconomics

authors

Vernon JA,Johnson SJ,Hughen WK,Trujillo A

doi

10.2165/00019053-200624040-00004

subject

Has Abstract

pub_date

2006-01-01 00:00:00

pages

335-43

issue

eissn

1170-7690

issn

1179-2027

pii

2444

journal_volume

pub_type

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Economic and developmental considerations for pharmacogenomic technology.