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On the Economic Infeasibility of Personalized Medicine, and a Solution

Author

Listed:
  • Marina Chiara Garassino
  • Kunle Odunsi
  • Marciano Siniscalchi
  • Pietro Veronesi

Abstract

Technological advances and genomic sequencing opened the road to personalized medicine: specialized therapies targeted to patients displaying specific molecular alterations. For instance, targeted therapies are now available for 50% of lung cancer patients—with some alterations affecting less than 1% of patients—greatly increasing life expectancy. In an investment model of drug development, we show that current institutions mandating experimentation and approval of individual therapies eventually disincentivize investments in personalized medicine as researchers identify increasingly rare alterations. Recent AI-based technologies, such as AlphaFold3, make personalized medicine viable when regulatory approval regards the process for drug discovery rather than individual therapies.

Suggested Citation

  • Marina Chiara Garassino & Kunle Odunsi & Marciano Siniscalchi & Pietro Veronesi, 2025. "On the Economic Infeasibility of Personalized Medicine, and a Solution," NBER Working Papers 33539, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:33539
    Note: AP CF EH PR
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    More about this item

    JEL classification:

    • I11 - Health, Education, and Welfare - - Health - - - Analysis of Health Care Markets
    • I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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