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Health Economics Tools and Precision Medicine: Opportunities and Challenges


  • Veenstra David L.
  • Basu Anirban

    (University of Washington, Seattle, WA, USA)

  • Mandelblatt Jeanne

    (Georgetown University, Washington, DC, USA)

  • Neumann Peter

    (Tufts University, Boston, MA, USA)

  • Peterson Josh F.

    (Vanderbilt University Medical Center, Nashville, TN, USA)

  • Ramsey Scott D.

    (Hutchinson Cancer Research Center, Seattle, WA, USA)


Precision medicine – individualizing care for patients and addressing variations in treatment response – is likely to be important in improving the nation’s health in a cost-effective manner. Despite this promise, widespread use of precision medicine, specifically genomic markers, in clinical care has been limited in practice to date. Lack of evidence, clear evidence thresholds, and reimbursement have been cited as major barriers. Health economics frameworks and tools can elucidate the effects of legal, regulatory, and reimbursement policies on the use of precision medicine while guiding research investments to enhance the appropriate use of precision medicine. Despite the capacity of economics to enhance the clinical and human impact of precision medicine, application of health economics to precision medicine has been limited – in part because precision medicine is a relatively new field – but also because precision medicine is complex, both in terms of its applications and implications throughout medicine and the healthcare system. The goals of this review are several-fold: (1) provide an overview of precision medicine and key policy challenges for the field; (2) explain the potential utility of economics methods in addressing these challenges; (3) describe recent research activities; and (4) summarize opportunities for cross-disciplinary research.

Suggested Citation

  • Veenstra David L. & Basu Anirban & Mandelblatt Jeanne & Neumann Peter & Peterson Josh F. & Ramsey Scott D., 2020. "Health Economics Tools and Precision Medicine: Opportunities and Challenges," Forum for Health Economics & Policy, De Gruyter, vol. 23(1), pages 1-14, June.
  • Handle: RePEc:bpj:fhecpo:v:23:y:2020:i:1:p:14:n:1
    DOI: 10.1515/fhep-2019-0013

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    References listed on IDEAS

    1. Ernst R. Berndt & Dana P. Goldman & John W. Rowe, 2019. "Economic Dimensions of Personalized and Precision Medicine," NBER Books, National Bureau of Economic Research, Inc, number bern-13, October.
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    3. 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.
    4. Dean A. Regier & David L. Veenstra & Anirban Basu & Josh J. Carlson, 2020. "Demand for Precision Medicine: A Discrete-Choice Experiment and External Validation Study," PharmacoEconomics, Springer, vol. 38(1), pages 57-68, January.
    5. John A. Graves & Zilu Zhou & Shawn Garbett & Josh F. Peterson, 2018. "The Value of Pharmacogenomic Information," NBER Chapters, in: Economic Dimensions of Personalized and Precision Medicine, pages 53-86, National Bureau of Economic Research, Inc.
    6. Ernst R. Berndt & Mark R. Trusheim, 2017. "The Information Pharms Race and Competitive Dynamics of Precision Medicine: Insights from Game Theory," NBER Working Papers 24020, National Bureau of Economic Research, Inc.
    7. Elizabeth J J Berm & Margot de Looff & Bob Wilffert & Cornelis Boersma & Lieven Annemans & Stefan Vegter & Job F M van Boven & Maarten J Postma, 2016. "Economic Evaluations of Pharmacogenetic and Pharmacogenomic Screening Tests: A Systematic Review. Second Update of the Literature," PLOS ONE, Public Library of Science, vol. 11(1), pages 1-22, January.
    8. Berndt, Ernst R. & Goldman, Dana P. & Rowe, John (ed.), 2019. "Economic Dimensions of Personalized and Precision Medicine," National Bureau of Economic Research Books, University of Chicago Press, number 9780226611068, December.
    9. Bhaven Sampat & Heidi L. Williams, 2019. "How Do Patents Affect Follow-On Innovation? Evidence from the Human Genome," American Economic Review, American Economic Association, vol. 109(1), pages 203-236, January.
    10. Anirban Basu, 2009. "Individualization at the Heart of Comparative Effectiveness Research: The Time for i-CER Has Come," Medical Decision Making, , vol. 29(6), pages 9-11, November.
    11. Josh J. Carlson & Rahber Thariani & Josh Roth & Julie Gralow & N. Lynn Henry & Laura Esmail & Pat Deverka & Scott D. Ramsey & Laurence Baker & David L. Veenstra, 2013. "Value-of-Information Analysis within a Stakeholder-Driven Research Prioritization Process in a US Setting: An Application in Cancer Genomics," Medical Decision Making, , vol. 33(4), pages 463-471, May.
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    Blog mentions

    As found by, the blog aggregator for Economics research:
    1. Chris Sampson’s journal round-up for 10th August 2020
      by Chris Sampson in The Academic Health Economists' Blog on 2020-08-10 11:00:11

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