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A Financial Model of Medication Wastage Avoidance by Using Genetic Testing

Susan Garavaglia
Organization: Medco Health Solutions, Inc

Wolfram Technology Conference 2011
Conference location

Champaign, Illinois, USA

No medication is 100% effective for 100% of patients. With certain chronic diseases, such as depression and rheumatoid arthritis, the patient may not be aware that the medication is not helping him or her and use non-efficacious medications for several years. Thus, the medication is a wasted cost. Spear, et al. (1) produced a meta-analysis of efficacy of drugs for 14 diseases and, more recently, Kitzmiller, et al. (5) provides a useful overview of current knowledge of pharmacogenomics. In several therapeutic areas, the value of genetic testing or genotyping has been demonstrated in enabling better clinical outcomes and lower medical costs (2,3,4). In some cases, genotyping establishes a phenotype of metabolization rates and, in other cases, genotyping leads the prescriber to the right drug for the patient versus a non-efficacious or even toxic drug. A genetic test needs to be performed only once on a patient; however, to identify the subgroup of patients that require adjustments to therapy or dosage, all patients must be tested, creating a cost barrier to testing. An interactive model is introduced to estimate how much wasted medication could be avoided with an effective genetic test. Selectable parameters include disease of interest, patient population size, inflation rates, nominal improvement percent, and cost per test. The model also has hard-coded parameters that could be modified, such as Average Wholesale Price (AWP) Per Member Per Year (PMPY) costs and total enrollment. Medication spent and wastage are calculated as annuities. Mathematica functions used include Manipulate, PieChart TimeValue, and Annuity.

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AFinancialModelOfMedicationWastageAvoidanceByUsingGeneticTesting.cdf (121.9 KB) - CDF Document
AFinancialModelOfMedicationWastageAvoidanceByUsingGeneticTesting.nb (121.2 KB) - Mathematica Notebook