Pre-approval incentives to promote adoption of personalized medicine: a theoretical approach

摘要

BackgroundCurrently, personalised medicine is becoming more frequently used and many drug companies are including this strategy to gain market access for very specialized therapies. In this article, in order to understand the relationships between the health authority and the drug company when deciding upon the implementation of personalized medicines, we take a theoretical perspective to model it when the price and reimbursement policy follows a pay-for-performance scheme. During the development of a new drug, the firm must decide whether to generate additional knowledge by investing in additional resources to stratify the target population based on a biomarker or directly apply for marketing authorization for the new treatment without information on the characteristics of patients who could respond to it. In this context, we assume that the pricing policy is set by the health authority, and then we characterize the pricing and investment decisions contingent on the rate of response to the treatment.