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The ROI of Pharmacogenomics

Elyas Bakhtiari, for HealthLeaders Media, August 18, 2010
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While some tests are expensive, the potential savings from wasted medicine can be worthwhile. 

When leaders at Ohio State University Health Plan were deciding whether to cover a genetic test that could tell patients if they have a specific mutation in what’s known as the KRAS gene, the numbers made a strong case.

Studies have shown that nearly 40% of colorectal cancer patients may have the mutation, which renders panitumumab and cetuximab, two popular therapies for the disease, essentially ineffective. Finding that mutation beforehand and diverting to a different treatment method has the potential to save a lot of lives, as well as a lot of unnecessary spending on medicine.

Add to that percentage the cost of the drugs—each treatment can cost more than $50,000—and the $452 price of the test that can detect the KRAS mutation suddenly doesn’t seem very expensive at all. In fact, when extrapolated out to the Rx Ohio Collaborative, an organization that encompasses nearly 500,000 patients in Ohio, the KRAS test has the potential to save $3 million to $3.6 million every year, according to Brian Lehman, director of pharmacy benefits for OSU Health Plan.

“When you’re looking at the financials of that, to cover a test that’s $452 in order to prevent the waste of 40% of your drugs being inappropriately prescribed is a sound investment,” says Lehman, who is also the pharmacy director for the Institute of  Pharmaceutical Outcomes for the Rx Ohio Collaborative.

But not every pharmacogenomic test has the potential to save as many lives or is as cost-effective as the KRAS test, and as more such genetic tests hit the market, insurers are increasingly making coverage decisions that aren’t nearly as straightforward.

OSU Health Plan performed a similar assessment of another test that reveals whether a patient will be a fast or slow metabolizer of warfarin, an anticoagulant, based on the presence of an enzyme in the liver. If a patient metabolizes too slowly, the dosage must be reduced or the blood can become too thin, so the test has potential to avert serious medication complications. But after reviewing the research, leaders weren’t quite sold on its effectiveness and decided to wait, says Lehman. Pharmacists were already effectively managing patients’ warfarin levels, so the health plan opted to cover pharmacist intervention but not the predictive test.

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