Implications of personalised medicine for the health economy

Personalised medicine not only offers new opportunities for better and more efficient medical treatments. The introduction of personalised medicine also results in far-reaching implications for the health economy. Firstly a re-consideration of established business models of the pharmaceutical industry which so far are based on the blockbuster concept becomes necessary. While the blockbuster model follows the principle one therapy fits all, personalised medicine is based on patient-specific treatments with better effectiveness, and efficiency. This new efficiency model calls for adapted business strategies. Secondly, new market segments such as those for clinical biomarkers are expected to emerge. Clinical biomarkers allow the stratification of patient populations and accordingly the conduct of clinical trials with smaller patient populations. Patients with adverse side reactions could be identified at earlier stages using toxicity biomarkers. The total number and duration of clinical trials could be reduced. Thirdly a new role for diagnostics as gatekeepers for the introduction of new personalised therapeutics is emerging. The availability of biomarker-based diagnostics will pave the way for new therapeutical treatments. Thereby a faster adoption of a new treatment will be facilitated by the accompanying diagnostic and additional barriers will be set up for treatments which are not combined with biomarkers. Companies offering both diagnostic and therapeutic need to consider the valuation and pricing of both components in order to achieve most returns. Finally, a re-arrangement of the roles of key players in the health economy driven by an increasing integration of diagnostics and therapeutics is developing. Some companies are trying to combine diagnostics and therapeutics under one roof. Traditional diagnostics companies will shift their activities to biomarkers and seek cooperation with pharmaceutical companies while on the other hand established pharmaceutical companies will need diagnostic firms as partners. Medical engineering companies developing for example imaging technologies are also becoming more interested in this field. In this paper we will discuss these trends in detail based on available literature and expert, thereby illustrating how personalised medicine could transform the future health economy. We will elaborate that the frequently made notion that personalised medicine will be equivalent to smaller and less attractive niche markets does not hold in general. Rather, personalised medicine will offer a number of attractive business models for new generations of companies.