A groundbreaking study has unveiled the economic edge of precision medicine, highlighting its potential to deliver a superior return on investment (ROI) for pharmaceutical research and development (R&D) compared to traditional one-size-fits-all approaches. The study, titled “Delivering the precision oncology paradigm – reduced R&D costs and greater return on investment through a companion diagnostic informed precision oncology medicines approach,” was published in the Journal of Pharmaceutical Policy and Practice, offering a comprehensive analysis of the economic impact of precision medicine in oncology.
Conducted by a team of precision healthcare economists and researchers, this study represents the world’s first extensive examination of the initial wave of precision oncology medicines in the market. The findings strongly advocate for a reevaluation of the commercial model surrounding precision medicines and their associated diagnostic and prognostic tests.
Professor Mark Lawler, co-lead of Health Data Research UK’s Big Data For Complex Disease Research Driver Programme and senior author of the study, emphasised the significance of precision medicine in delivering affordable care for cancer patients. He stated that adopting a precision oncology approach guided by companion diagnostics (CDx) could provide health benefits at an affordable cost, including reducing expensive clinical trial attrition rates and sparing patients from ineffective treatments with significant side effects.
The study reveals that developing an oncology medicine without CDx-guided clinical trials costs over $1 billion more in R&D expenditure compared to a precision oncology approach. Therefore, CDx-guided precision oncology approaches offer better value to key stakeholders, such as payers, patients, and the pharmaceutical industry.
Professor Richard Sullivan, a co-author of the paper, emphasised the importance of precision medicine’s economic impact as it represents the future of medicine. Significant cost savings in R&D were observed in the study, which could be directed towards better testing and deliver greater cost benefits to health systems, thus benefiting more patients.
Dr. Raymond Henderson, lead author on the paper, highlighted how a precise health economic approach can provide the necessary evidence to support the delivery of precision oncology for patients.
While traditional oncology medicines have historically generated more revenue than precision medicines, a study published in the Journal of Clinical Oncology last year highlighted clinical practice gaps in CDx testing as a key reason for the revenue disparity. Inefficiencies in the diagnostic pathway have resulted in less than 50% of eligible patients gaining access to the most effective precision medicines for their cancer type. The precision medicine approach should enable pharmaceutical companies to adopt new business models that promote equity-based pricing systems and develop precision oncology medicines with significant clinical benefits.
The study’s findings hold crucial implications for the pharmaceutical industry, as investment in better testing could potentially recover patients lost to the diagnostic pathway and generate significant lifecycle revenues per therapy.
While precision oncology approaches demonstrate their value to stakeholders, there are still barriers to overcome to ensure cost-effective treatments reach all target patients. The study received support from Health Data Research UK (HDR UK) and funding from the Queen’s University Belfast Foundation.
The full paper can be accessed at the following link