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- Title
Implementation of personalized medicine in a context of moral hazard and uncertainty about treatment efficacy.
- Authors
Alcenat, Stéphane; Maréchal, François; Naegelen, Florence
- Abstract
This paper analyzes the decision of a health authority to implement personalized medicine. We consider a model in which the health authority has three possibilities. It can apply either the same treatment (a standard or a new treatment) to the whole population or implement personalized medicine, i.e., use genetic information to offer the most suitable treatment to each patient. We first characterize the drug reimbursement contract of a firm producing a new treatment with a companion genetic test when the firm can undertake an effort to improve drug quality. Then, we determine the conditions under which personalized medicine should be implemented when this effort is observable and when it is not. Finally, we show how the unobservability of effort affects the conditions under which the health authority implements personalized medicine.
- Subjects
MORAL hazard; INDIVIDUALIZED medicine; TREATMENT effectiveness; UNCERTAINTY; GENETIC testing
- Publication
International Journal of Health Economics & Management, 2021, Vol 21, Issue 1, p81
- ISSN
2199-9023
- Publication type
Article
- DOI
10.1007/s10754-020-09290-2