July 2008

Grant Results

National Program

Changes in Health Care Financing and Organization

SUMMARY

Pharmacogenomics is the study of how inherited variations in genes dictate a person's reaction to a drug. In this 2004 to 2005 project, Louis F. Rossiter, Ph.D., and other researchers from the College of William & Mary Center for Public Policy Research, examined how pharmacogenomics fits within the current health care market.

This project was part of the Robert Wood Johnson Foundation (RWJF) national program Changes in Health Care Financing and Organization (HCFO) (for more information see Grant Results). HCFO supports policy analysis, research, evaluation and demonstration projects that provide public and private decision leaders with usable and timely information on health care policy and financing issues.

Key Findings

The researchers reported the following findings in the Findings Brief:

  • Few pharmacogenomics products are available; however, many more are in the premarket stage of approval by the U.S. Food and Drug Administration (FDA).
  • The pharmaceutical business model, which benefits most from high-volume drug sales to as many patients as possible, is a major challenge to the pharmacogenomic model, which relies on ruling out patients who would be adversely affected by a drug.
  • The current cost-containment environment and the absence of a blockbuster pharmacogenomic product may hinder future private and public funding of these products and services.

Funding

RWJF provided a $108,455 grant for the project from 2004 to 2005.

 See Grant Detail & Contact Information
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THE PROJECT

Pharmacogenomics is the study of how inherited variations in genes dictate a person's reaction to a drug. Pharmacogenomic studies are used to discern an individual's susceptibility to disease based on his or her genetic makeup and to enable physicians to identify patients who will have an adverse reaction to a drug by comparing the drug with a genetic test.

In this 2004 to 2005 project, Louis F. Rossiter, Ph.D., led a team of researchers from the College of William & Mary Center for Public Policy Research in Williamsburg, Va., in an examination of the current health care market to determine how pharmacogenomics fits within the current health care financing, delivery and payment environment. Specifically, the researchers:

  • Summarized marketed pharmacogenomic products and services and those in the premarket approval stage at the U.S. Food and Drug Administration (FDA).
  • Interviewed 35 industry leaders and scientists to identify the mechanisms by which suppliers bring pharmacogenomic products to the market.
  • Studied the implications of the financing and organization of the health care delivery system for pharmacogenomic products.

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FINDINGS

The researchers reported the following findings in the Findings Brief (March 2007):

  • Few pharmacogenomics products are available; however, many more are in the premarket stage of approval by the FDA. Although the future looks promising, the lack of both cost-effectiveness studies and competing products that are easier for physicians to administer remain challenges for pharmacogenomic products.
  • There are four key stakeholders in the pharmacogenomics field:
    • Genetic analysis companies, which develop the systems and technology to handle genetic material.
    • Molecular diagnostic companies, which manufacture the tests that determine if a drug therapy is safe.
    • Research and manufacturing companies, which conduct clinical trials and bring products and services to the market.
    • Distributors, which provide easy-to-use genetic test kits to physicians and patients.
  • Competition exists at the market and physician levels:
    • The pharmaceutical business model, which benefits most from high-volume drug sales to as many patients as possible, is a major challenge to the pharmacogenomic model, which relies on ruling out patients who would be adversely affected by a drug.
    • At the physician level, pharmacogenomic products face competition from other treatments on the basis of price, potential side effects, survival rates and confidence in their effectiveness. However, the treatment that offers the highest survival rate with the lowest side effects is likely to prevail.
  • The majority of pharmacogenomic products will continue to be distributed through large research and manufacturing firms; however, the role physicians will play is less concrete. Physicians may be hesitant to learn and utilize the complex information required to administer pharmacogenomic products.
  • Private investors are likely to continue to be the source of funding for pharmacogenomic products until clear cost-effectiveness and outcomes data are available.
  • The current cost-containment environment and the absence of a blockbuster pharmacogenomic product may hinder future private and public funding of pharmacogenomic products and services.

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CONCLUSIONS

The researchers reported the following conclusions in the Findings Brief:

  • The existing health care payment system is not designed to allow pharmacogenomic products and services to reach their maximum treatment potential.
  • More funding should be directed toward pharmacogenomic cost-effectiveness research.

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GRANT DETAILS & CONTACT INFORMATION

Project

Exploring the Implications of Pharmacogenomics on Health Care Costs and Access to Treatment

Grantee

The College of William & Mary Center for Public Policy Research (Williamsburg,  VA)

  • Amount: $ 108,455
    Dates: February 2004 to April 2005
    ID#:  050400

Contact

Louis F. Rossiter, Ph.D.
(757) 221-1913
lfross@wm.edu

Web Site

http://www.hcfo.net/about.htm

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BIBLIOGRAPHY

(Current as of date of this report; as provided by grantee organization; not verified by RWJF; items not available from RWJF.)

Articles

Rossiter LF and Jensen C. "Pharmacogenomics: The Emerging Market and Health Care Competition." Unpublished.

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Report prepared by: Barbara Matacera Barr
Reviewed by: Lori De Milto
Reviewed by: Molly McKaughan
Program Officer: Nancy Barrand

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