IT-Enhanced Personalized Medicine Opens Investment OpportunitiesIT-Enhanced Personalized Medicine Opens Investment Opportunities

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Financial services giant Fidelity Investments sees enormous long-term investment opportunities in the emerging field of personalized medicine and says IT will drive much of the transformation.

"On the whole, the healthcare sector may continue to face secular headwinds in the form of costs and reimbursement pressures, but advancements and trends in personalized medicine provide investing opportunities in companies that are offering innovative products and services that help our healthcare system better serve patients and save money," Fidelity research analyst Eddie Yoon wrote in a research note.

Yoon sees "incredible growth opportunities" for companies that can develop "deflationary business models," meaning they can reduce costs, Yoon said in an interview with information Healthcare. Fidelity policy prevents him from making public pronouncements about specific companies, however.

"Research today will make it possible for doctors tomorrow to anticipate which treatments will work best for each person, and deliver more effective, less expensive care. That means fewer trial and error prescriptions and a steep drop in the number of adverse drug reactions, which cause more than 770,000 injuries and deaths a year in the United States," he wrote.

Framing personalized medicine as "the belief that healthcare can move from a provider-centric to a patient-centric system," Yoon believes that the field is broader than genetics and genomics. "People make an association with genetics," Yoon explained. "That's [just] one aspect of it."

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With this definition in mind, Fidelity cited a 2009 PricewaterhouseCoopers forecast suggesting that the U.S. market for personalized medicine is growing by 11% annually and should hit $450 billion by 2015. But the investment should pay off in the form of lower overall healthcare costs and better patient outcomes.

The current healthcare system, which now accounts for 18% of U.S. GDP and is rising, is "not a sustainable situation," and individuals are being asked to take on a bigger share of costs, Yoon said. "We can't grow like this forever," he added. IT is a key part of reversing the trend.

"Healthcare lives in the analog world," Yoon said. "We're going to accelerate the shift to the digital world."

He wrote in the research note that genetic sequencing to access data from individual's DNA will be "a key enabler of the personalized medicine trend" as the price of this service drops from $3 billion for the first human genome sequencing in 2003--a 13-year process--to a few thousand dollars in a test that takes less than two weeks.

"With an estimated 90% of prescription drugs working only about 50% of the time, prescribing physicians could use molecular diagnostics to test for specific genetic mutations that might cause one drug to be harmful, while another might be safe," Yoon suggested.

In a video accompanying the research note, Yoon predicted that medical records soon will start to include patients' genetic information to help clinicians make better decisions and come up with targeted treatment plans. Similarly, drug companies will be able to focus their research efforts on ever narrower patient populations.

"Adding genetic data to electronic medical records empowers patients, too," taking personalized medicine to the consumer level, Yoon added in the video. "When you can access your health profile from anywhere, you won't be bound to the doctor who has your files. Instead, you'll be able to shop for the provider with the best results treating patients like you."

"Technology startups and insurance giants are already competing to launch tools that make this possible," he said.

Even without genomic sequencing widely available now, many companies are providing online health management tools for their employees, according to Yoon. As part of the Meaningful Use federal electronic health records (EHRs) incentive program, hospitals and physicians must disclose quality data to qualify for Medicare and Medicaid bonus payments.

"But it is important to understand that these are long-term endeavors, which may require 15-20 years of research before there is any significant payoff," Yoon cautioned in the research note. This extended timetable might mean that a major government funding source such as the U.S. National Institutes of Health (NIH) needs to step in, though political realities are opening the door for private investors.

"The focus on federal deficit reduction could limit the NIH budget going forward, so private sources of funding may be needed to fill the gap," Yoon wrote.

This focus on personalized medicine is part of a Fidelity initiative called Thinking Big that launched in February. Personalized medicine is the third report in the series, following reports on water management and synthetic biology.

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