IDEAS home Printed from https://ideas.repec.org/a/bpj/fhecpo/v16y2013i2p121-133n6.html
   My bibliography  Save this article

The Value of Diagnostic Testing in Personalized Medicine

Author

Listed:
  • Goldman Dana P.

    (Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles, CA, USA)

  • Gupta Charu

    (Precision Health Economics, Los Angeles, CA, USA)

  • Vasudeva Eshan

    (Precision Health Economics, Los Angeles, CA, USA)

  • Trakas Kostas

    (Janssen Diagnostics, Toronto, ON, Canada and Philadelphia, PA, USA)

  • Riley Ralph

    (Janssen Diagnostics, Toronto, ON, Canada and Philadelphia, PA, USA)

  • Lakdawalla Darius

    (Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles, CA, USA)

  • Agus David

    (Center for Applied Molecular Medicine, University of Southern California, Los Angeles, CA, USA)

  • Sood Neeraj

    (Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, Los Angeles, CA, USA)

  • Jena Anupam B.

    (Harvard Medical School and Massachusetts General Hospital, Boston, MA, USA)

  • Philipson Tomas J.

    (Harris School of Public Policy, The University of Chicago, 1155 East 60th Street, Chicago, IL 60637, USA)

Abstract

Personalized medicine – the targeting of therapies to individuals on the basis of their biological, clinical, or genetic characteristics – is thought to have the potential to transform health care. While much emphasis has been placed on the value of personalized therapies, less attention has been paid to the value generated by the diagnostic tests that direct patients to those targeted treatments. This paper presents a framework derived from information economics for assessing the value of diagnostics. We demonstrate, via a case study, that the social value of such diagnostics can be very large, both by avoiding unnecessary treatment and by identifying patients who otherwise would not get treated. Despite the potential social benefits, diagnostic development has been discouraged by cost-based, rather than value-based, reimbursement.

Suggested Citation

  • Goldman Dana P. & Gupta Charu & Vasudeva Eshan & Trakas Kostas & Riley Ralph & Lakdawalla Darius & Agus David & Sood Neeraj & Jena Anupam B. & Philipson Tomas J., 2013. "The Value of Diagnostic Testing in Personalized Medicine," Forum for Health Economics & Policy, De Gruyter, vol. 16(2), pages 87-99, September.
    • Handle: RePEc:bpj:fhecpo:v:16:y:2013:i:2:p:121-133:n:6
    DOI: 10.1515/fhep-2013-0023
    as

    Download full text from publisher

    File URL: https://doi.org/10.1515/fhep-2013-0023
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.
    File URL: https://libkey.io/10.1515/fhep-2013-0023?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Philipson Tomas J & Jena Anupam B, 2006. "Who Benefits from New Medical Technologies? Estimates of Consumer and Producer Surpluses for HIV/AIDS Drugs," Forum for Health Economics & Policy, De Gruyter, vol. 9(2), pages 1-33, January.
    2. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-329, March-Apr.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Manuel Hermosilla & Jorge Lemus, 2018. "Therapeutic Translation of Genomic Science: Opportunities and Limitations of GWAS," NBER Chapters, in: Economic Dimensions of Personalized and Precision Medicine, pages 21-52, National Bureau of Economic Research, Inc.
    2. Ernst R. Berndt & Dana P. Goldman & John W. Rowe, 2018. "Introduction to "Economic Dimensions of Personalized and Precision Medicine"," NBER Chapters, in: Economic Dimensions of Personalized and Precision Medicine, pages 1-7, National Bureau of Economic Research, Inc.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhifeng Gao & Ted C. Schroeder, 2009. "Consumer responses to new food quality information: are some consumers more sensitive than others?," Agricultural Economics, International Association of Agricultural Economists, vol. 40(3), pages 339-346, May.
    2. Kyle Bagwell & Garey Ramey, 1988. "Advertising and Limit Pricing," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 59-71, Spring.
    3. Bernd Süssmuth, 2012. "The Econometric Analysis of Willingness to Pay for Intangibles with Experience Good Character," Chapters, in: Wolfgang Maennig & Andrew Zimbalist (ed.), International Handbook on the Economics of Mega Sporting Events, chapter 14, Edward Elgar Publishing.
    4. Heineck, Guido & Süssmuth, Bernd, 2013. "A different look at Lenin’s legacy: Social capital and risk taking in the Two Germanies," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 789-803.
    5. Thunström, Linda & Nordström, Jonas & Shogren, Jason F., 2015. "Certainty and overconfidence in future preferences for food," Journal of Economic Psychology, Elsevier, vol. 51(C), pages 101-113.
    6. J. K. Pappalardo, 2022. "Economics of Consumer Protection: Contributions and Challenges in Estimating Consumer Injury and Evaluating Consumer Protection Policy," Journal of Consumer Policy, Springer, vol. 45(2), pages 201-238, June.
    7. repec:ebl:ecbull:v:10:y:2004:i:8:p:1-8 is not listed on IDEAS
    8. Alexander, Corinne E., 2002. "The Role Of Seed Company Supplied Information In Farmers' Decisions," 2002 Annual meeting, July 28-31, Long Beach, CA 19617, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    9. Mtimet, Nadhem & Ujiie, Kiyokazu & Kashiwagi, Kenichi & Zaibet, Lokman & Nagaki, Masakazu, 2011. "The effects of Information and Country of Origin on Japanese Olive Oil Consumer Selection," 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland 114642, European Association of Agricultural Economists.
    10. Tomas J. Philipson & Sachin Kamal-Bahl & Anupam B. Jena, 2017. "Defining Value: The Need for a Longer, Broader View," PharmacoEconomics, Springer, vol. 35(7), pages 669-672, July.
    11. Dhaval M. Dave, 2013. "Effects of Pharmaceutical Promotion: A Review and Assessment," NBER Working Papers 18830, National Bureau of Economic Research, Inc.
    12. Thomas de Haan & Theo Offerman & Randolph Sloof, 2015. "Money Talks? An Experimental Investigation Of Cheap Talk And Burned Money," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 56(4), pages 1385-1426, November.
    13. Filistrucchi, L. & Ozbugday, F.C., 2012. "Mandatory Quality Disclosure and Quality Supply : Evidence from German Hospitals," Other publications TiSEM 680b0e3e-d3f5-4b91-9803-8, Tilburg University, School of Economics and Management.
    14. Gu, Yiquan & Rasch, Alexander & Wenzel, Tobias, 2022. "Consumer salience and quality provision in (un)regulated public service markets," Regional Science and Urban Economics, Elsevier, vol. 93(C).
    15. Wei He & Chenyuan Jin, 2024. "A study on the influence of the characteristics of key opinion leaders on consumers’ purchase intention in live streaming commerce: based on dual-systems theory," Electronic Commerce Research, Springer, vol. 24(2), pages 1235-1265, June.
    16. Fabrizio Adriani & Giancarlo Marini & Pasquale Scaramozzino, 2009. "The Inflationary Consequences of a Currency Changeover on the Catering Sector: Evidence from the Michelin Red Guide," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 71(1), pages 111-133, February.
    17. Joe Cox & Daniel Kaimann, 2013. "The Signaling Effect of Critics - Evidence from a Market for Experience Goods," Working Papers CIE 68, Paderborn University, CIE Center for International Economics.
    18. Cai, Dapeng & Jørgensen, Jan Guldager, 2017. "Mutual Recognition for Sale: International Bargaining over Product Standards," Discussion Papers on Economics 1/2017, University of Southern Denmark, Department of Economics.
    19. Greiff, Matthias & Egbert, Henrik, 2016. "A Survey of the Empirical Evidence on PWYW Pricing," MPRA Paper 68693, University Library of Munich, Germany.
    20. David Bardey & Denis Gromb & David Martimort & Jérôme Pouyet, 2016. "Drugs, Showrooms and Financial Products: Competition and Regulation when Sellers Provide Expert Advice," PSE Working Papers halshs-01400841, HAL.
    21. Jhunjhunwala, Tanushree, 2021. "Searching to avoid regret: An experimental evidence," Journal of Economic Behavior & Organization, Elsevier, vol. 189(C), pages 298-319.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:fhecpo:v:16:y:2013:i:2:p:121-133:n:6. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peter Golla (email available below). General contact details of provider: https://www.degruyter.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.