Will Personalized Medicine Increase Costs?

Last week, the U.S. Food and Drug Administration ordered 23AndMe, maker of a $99 DNA test kit, to halt marketing of its test kits. The FDA said the kits fall under the classification of a medical device because they can potentially be used as a diagnosis tool and therefore requires FDA approval.
While 23andMe submitted a 510(k)s for the kits, the FDA’s letter says the company failed to submit follow-up documents requested by the FDA, rendering the 510(k)s withdrawn.The FDA’s decision is a major blow for the company, which has received a great deal of media attention for its low-cost DNA test. However, as a recent Fast Company article pointed out, one group within healthcare is thankful the FDA’s decision: insurers.
DNA sequencing currently costs around $1,000. However, 23AndMe, uses genotyping, rather than sequencing. As a New York Times article explains:
“23andMe uses a technology called genotyping, which identifies specific variants (or markers) within the genes that are associated with those diseases rather than sequencing the genes the way Myriad does — which makes the process much easier and, admittedly, less comprehensive in its analysis.”
For all the benefits of personalized medicine (such as targeted therapies, and better information for diagnostic and treatment decisions further down the line), which I’ve written about extensively for Becker’s, an element that has received less press is the potential costs.
The cost of sequencing — although it alone is costly — isn’t as much of a concern. Rather, the major concern is the cost of care that may occur after a person receives his or her DNA results. An increase of DNA testing, as Fast Company explains, “could lead to an increase in care —necessary or not — which insurers could end up covering.”And, because of a law called the Genetic Information Nondiscrimination Act, passed in 2008, insurers can’t charge more because of genetic predisposition to certain diseases or conditions.So, insurers would pick up the tab for trips to the doctor, diagnostics and other services that may not have been otherwise received, had it not been for the test. Certainly, it appears that DNA testing could increase short-term costs for insurers. However, how does testing impact long-term costs? That, it appears, is unclear.