Quantifying the Value of Personalized Medicines: Evidence from COX-2 Inhibitors

Neeraj Sood, Tomas Philipson and Huckfeldt Peter
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Huckfeldt Peter: The RAND Corporation, 1776 Main Street, Santa Monica, CA 90401, USA

Forum for Health Economics & Policy, 2013, vol. 16, issue 1, 101-122

Abstract: We develop a conceptual framework for estimating the value of personalized medicines. We show that personalizing medicines generates value from two sources. The first is a market-expansion effect by persons who initiate treatment due to reduced pre-treatment uncertainty about the effectiveness or side effects of treatment. The second is a market-contraction effect due to discontinuation of treatment by persons unresponsive to treatment. We apply the conceptual framework to evaluate the value of a predictive test to assess whether patients are at elevated risk for cardiac complications from COX-2 inhibitors. We find that this predictive test would yield an overall value to patients of about $16 billion per year or $1284 per likely patient.

Keywords: adverse events; diagnostics; innovation; personalized medicines; social value (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (2)

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DOI: 10.1515/fhep-2013-0005

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