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Targeted treatments can improve outcomes // But at great cost // Can we afford to each have our own?

The Price of Personalization

By Timothy Gower // Photographs by Adam Voorhes // Spring 2014
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Adam Voorhes

Brian O’Sullivan considers Kalydeco (ivacaftor) an invaluable medicine. “For me, as a clinician who cares for kids with cystic fibrosis, this drug has been wonderful,” says O’Sullivan, a pediatric pulmonologist at UMass Memorial Medical Center in Worcester, Mass. Kalydeco is the first drug to target a gene mutation that causes CF, an inherited chronic disease that produces thick mucus in the lungs, digestive problems and other symptoms. It afflicts about 30,000 children and adults in the United States. O’Sullivan has seen dramatic improvements in breathing, digestion and overall quality of life in patients treated with Kalydeco.

Yet Kalydeco only treats just the 4% of patients with CF who carry the G551D gene mutation—a total of about 1,200 people in the United States. Studies to see if Kalydeco could benefit patients with other mutations only recently began. And then there’s the price tag: $300,000 per patient for a year of treatment, which must continue for life. “We weren’t expecting it to be cheap, but this is so outrageous,” says O’Sullivan.

Last year, O’Sullivan and several colleagues wrote an editorial in JAMA that asked, in essence: How many more Kalydecos can the U.S. health care system afford? It’s a pressing question in the emerging era of personalized medicine, as the list of so-called targeted therapies—which are designed for a fraction of patients within a disease category and inevitably carry huge price tags continues to grow.

The concept of personalized medicine takes many forms, but the most promising may be the goal of replacing “one size fits all” drugs made to treat broad swaths of patients with new medicines designed to pinpoint genetic mutations and other molecular abnormalities that occur within patient subpopulations. Because researchers have learned a great deal about the genetic origins of cancers, oncologists have the largest number of targeted drugs to call upon. At Massachusetts General Hospital Cancer Center, all malignant tumors now are studied for genetic mutations that might make the patient one of the 10% of candidates for whom there is a drug that precisely fits their needs, says director Daniel Haber.

But targeted cancer drugs routinely cost $100,000 or more per course of treatment. When pharmaceutical companies make drugs for small groups of patients, they compensate for low-volume sales by charging a lot. Lofty price tags are also common for so-called orphan drugs that treat rare diseases. Insurers have generally not balked at the high cost of orphan drugs because relatively few patients need them. But in the pursuit of personalizing medicine there will be an ever-expanding formulary of expensive drugs that critics believe will strain the U.S. health care system. “This is not sustainable,” says O’Sullivan.

The rise of premium-priced targeted therapies is occurring at a time when the overall cost of drugs is increasing, and signs of resistance within the medical community are stirring. For example, the high price tag of a new hepatitis C drug, Sovaldi (sofosbuvir)—which costs $84,000 for a 12-week treatment—has come under protest by patients and payers alike. But while Sovaldi is considered a major advance in the treatment of hepatitis, that’s not the case for all recently approved drugs with sky-high prices, and some hospitals and insurers are refusing to use or cover high-ticket medicines that don’t provide patients with significant benefits. But even if personalized medicine yields therapies that improve patient care and prolong life, is this an advance we can afford?

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The Trouble with Targeting Treatments

Researchers are working to develop diagnostic tests to determine who is eligible for targeted therapies, but red tape and limited expertise stand in the way.


1. Me Medicine vs. We Medicine: Reclaiming Biotechnology for the Common Good, by Donna Dickenson (Columbia University Press, 2013). A medical ethicist argues that the promise of personalized health care has been overstated and that focusing on the individual distracts from the importance of proven public health interventions, such as vaccination programs.

2. “Towards a Balanced Value Business Model for Personalized Medicine: An Outlook,” by Christof Koelsch et al., Pharmacogenomics, January 2013. To bring down the high cost of personalized medicine, drug developers need to adopt new strategies, such as shorter, smaller clinical trials, Koelsch and colleagues argue, stating that “not all targeted therapies must inevitably cost a fortune.”

3. “Can Genomics Bend the Cost Curve?” by Katrina Armstrong, JAMA, March 14, 2012. Like most medical innovations, targeted therapies and companion diagnostic tests add to health care costs. However, Armstrong argues that personalized medicine has the potential to improve the value of health care by reducing the use of ineffective treatments.

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