A Push for Personalized Medicine

November 30, 2010

As the demand for granularity in managing covered lives increases, pharmacy benefit managers are placing greater focus on pharmacogenomics, or personalized medicine, and more payors are accepting it, says Tony Perkins, an analyst at First Analysis Securities Corp.

“Right now we are seeing payors accept or seek pharmacogenomics more often than they have in past,” Perkins said. “These payors have the ability to analyze their covered lives‘ genetics to prescribe the correct drug at the correct dosage for that person. We believe payors like the benefit and are willing to pay extra for it.”

Perkins points to MedcoHealth Solutions (MHS) as the leader in pharmacogenomics, with 11 million covered lives and more than 250 payors. He says there is a higher client retention rate for personalized medicine, making the pharmacy benefit managerpayor relationship stronger.

“More payors are interested in offering the benefit to their covered lives and more PBMs will be offering the benefit in the near future,” Perkins said. “Therefore, we believe the supply and demand may not be equal at this point, but in the near future, we would assume more supply is going to come online to fulfill the industry demand. We think pharmacogenomics is still somewhat under the radar, especially in the middle market, because not all payors are aware of the benefit.”