• <div class="header-image" style="background-image: url(/live/image/gid/4/3040_V7N1_header.rev.1549561230.jpg);"/><div class="header-background-color"/>

Precision Medicine: The Future of Healthcare?

October 14, 2015
President Obama recently proposed a $250 million initiative supporting precision medicine based research. Precision-based research supports development of treatments and therapies for individuals based upon their specific genes, rather than the symptoms and traits that they exhibit. Through this work, physicians can better treat patients using precise medicines specified to the individual patient. This removes the inefficiencies and side effects of treating patients with drugs that don’t always work. However, this would require pharmaceutical companies to produce many different treatments for the same disease, greatly increasing the expense to the individual patient and to the healthcare industry as a whole. With these treatments exceeding $300,000 a year per patient, can we as a country afford these improvements in treating genetic diseases?

President Obama
Photograph by Larry Downing, Reuters

“Precision medicine gives us one of the greatest opportunities for new medical breakthroughs we’ve ever seen,” Obama said, promising that it would “lay a foundation for a new era of life-saving discoveries.”

President Obama wants the United States “to lead a new era of medicine, one that delivers the right treatment at the right time.”[1] In pursuit of this goal, the President announced the Precision Medicine Initiative in his State of the Union speech. The mission of the project is to: “enable a new era of medicine through research, technology, and policies that empower patients, researchers, and providers to work together toward development of individualized treatments.”[2] Precision medicine is the development of treatments and therapies for individuals based upon their specific genes, rather than the symptoms and traits that they exhibit. This is performed through sequencing and analyzing all of the patient’s relevant genes, through a process known as genomic testing. This is a $215 million project which would fund research for the development of new genomic based treatments for specific genetic diseases such as cancer. Precision medicine is important, as it allows for patients to have treatments specified to their exact genetic makeup, decreasing side-effects and improving the efficacy of therapies.

Physicians currently treat patients by prescribing drugs according to the symptoms or disease present in the individual. However, many diseases have different causes, and current treatments often only treat a few of these causes. Under the current model, certain therapies and drugs are extremely successful for some patients, but have devastating side effects for others. Precision medicine removes these inefficiencies in treatment. Providers can treat patients with individualized therapies that they are most likely to benefit from, using genomic information on the precise cause of the disease. Patients with different defects would not be given these drugs, preventing unnecessary waste and side effects.[3]This new medical approach eschews the traditional “one-size-fits-all” method of the past, focusing on individual differences in genetics, environment, and lifestyles. This gives clinicians tools to better understand the complex mechanisms underlying a patient’s condition, and allowing them to better predict which treatments will be most effective.[4]

National Cancer Institute: Precision Medicine in Cancer Treatment

Photograph by NIH - National Cancer Institute

The $215 million increase to the federal budget is outlined in the following way[5]:

  • $130 million to the National Institute of Health (NIH) for developing a research cohort of one million Americans who agree to contribute medical records; genome information; and environmental and lifestyle data. This research will be used to identify the molecular drivers of cancer, applying this knowledge to drug development. Part of this work would involve discovering and identifying biomarkers - genetic clues which hint at potential cancer development - to help inform patients of increased risk of developing diseases.[6]
  • $70 million to the National Cancer Institute (NCI), to increase and accelerate testing of effective, tailored treatments for cancer by expanding genetically based clinical cancer trials, and establishing a national “cancer knowledge network” that will generate and share new knowledge to fuel scientific discovery and guide treatment decisions.
  • $10 million to the Food and Drug Administration (FDA) to review changes needed to establish a new regulatory structure for this new research and care model. As part of this effort, the FDA will develop a new approach for evaluating Next Generation Sequencing technologies — tests that rapidly sequence large segments of a person’s DNA, or even their entire genome.
  • $5 million to the Office of the National Coordinator for Health Information Technology (ONC) to develop a data infrastructure to support research from the cohort to improve privacy and enable secure exchange of data across systems.


This funding would allow for additional resources to be provided to researchers in the field, as well as to establishing a large-scale study of Americans in targeting biomarkers. The Precision Medicine Initiative has been made possible through recent advances in genetics and protein biochemistry. The Cancer Genome Atlas Project[7] has been vital in isolating and identifying many mechanisms driving various cancersthrough this new genetic-based information.[8][9] This has also allowed for the development of many individualized cancer treatments such asimatinib (Gleevec) and crizotinib (Xalkori), for chronic myelogenous leukemia[10] and lung adenocarcinoma patients, respectively. These treatments are specified to certain individuals, for example, in Xalkori only patients exhibiting the ALK gene mutation receive the treatment. These drugs halt disease progression, greatly increasing survival.

The Precision Medicine Initiative 

Photograph by Genetic Alliance

One major issue with precision medicine is in commercialization. Funding is a major problem at development and deployment to the patient.

Developing drugs for only a small population is a risky investment. Even with tax breaks and market exclusivity provided by orphan drug status (drugs intended for diseases suffered by 200,000 Americans or less), stockholders are leery of bringing these drugs to market, due to the high failure rate and the expenses of taking these therapies to clinical trials.

The high price of R&D, which takes into account all of the failed trials, leads to treatments costing patients tens of thousands of dollars per year. This may become the norm. Certain drugs, such as Kalydeco already cost individual patients $300,000 or higher per year[11]. Many of the uninsured or underinsured will be unable to afford these prices, leading many to question the efficacy of these precision research efforts.

On a macroeconomic scale, the President touted the economic benefits that his investment would bring about. He cited one study[12] about the Human Genome Project[13], noting (with dubious veracity[14]) that “every dollar we spent to map the human genome has returned $140 to our economy – $1 of investment, $140 in return.”[15]

This $250 million funding, however, is likely not enough to sequence 1 million genomes from scratch. Whole-genome sequencing, though plummeting in price, still costs about $1,000 per genome, meaning this component alone would cost $1 billion.[16] Some argue that this funding would encourage greater spending and time on therapies which would apply and treat fewer and fewer people. This “paradox of precision medicine”[17] means that these more effective drugs would have markets of only a few thousand or hundred people. The question, therefore, arises: should we spend taxpayer dollars in the midst of an ever-growing debt to pursue therapies, which would only affect a few hundred people?

The Precision Medicine initiative would have a profound impact on the healthcare industry as a whole, making treatment of patients more effective and efficient, but also far more expensive to consumers. With our healthcare expenses rapidly approaching our overall GDP, the question arises – should we spend taxpayer dollars in the midst of an ever-growing debt to pursue therapies that only affect a few hundred people? These consumers may not be able to even afford the treatments without government assistance, but we must in the coming years decide how much we value the health of our citizens – as well as how we hope to pay for this.

[3]FACT SHEET: President Obama’s Precision Medicine Initiative (The White House)


[4] Ibid.

[5] ibid

[6]Precision Medicine Initiative Cohort Program - Precision Medicine Initiative - National Institutes of Health (NIH) (U.S National Library of Medicine)


[7] The Cancer Genome Atlas Home Page (The Cancer Genome Atlas)


[8]Near-term Goals - Precision Medicine Initiative - National Institutes of Health (NIH) (U.S National Library of Medicine)




[10]Near-term Goals - Precision Medicine Initiative - National Institutes of Health (NIH) (U.S National Library of Medicine)





[13]Human Genome Project (Information)


[14]A 1 to 140 ‘return’ from the Human Genome Project? (Washington Post)


[15]Remarks by the President on the BRAIN Initiative and American Innovation (The White House)


[16]U.S. proposes effort to analyze DNA from 1 million people (Reuters)


Student Blog Disclaimer
  • The views expressed on the Student Blog are the author’s opinions and don’t necessarily represent the Wharton Public Policy Initiative’s strategies, recommendations, or opinions.


  • <h3>National Center for Education Statistics</h3><p><strong><img width="400" height="80" alt="" src="/live/image/gid/4/width/400/height/80/479_nces.rev.1407787656.jpg" class="lw_image lw_image479 lw_align_right" data-max-w="400" data-max-h="80"/>The National Center for Education Statistics (NCES) is the primary federal entity for collecting and analyzing data related to education in the U.S. and other nations.</strong> NCES is located within the U.S. Department of Education and the Institute of Education Sciences. NCES has an extensive Statistical Standards Program that consults and advises on methodological and statistical aspects involved in the design, collection, and analysis of data collections in the Center. To learn more about the NCES, <a href="http://nces.ed.gov/about/" target="_blank">click here</a>.</p><p> Quick link to NCES Data Tools: <a href="http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4" target="_blank">http://nces.ed.gov/datatools/index.asp?DataToolSectionID=4</a></p><p> Quick link to Quick Tables and Figures: <a href="http://nces.ed.gov/quicktables/" target="_blank">http://nces.ed.gov/quicktables/</a></p><p> Quick link to NCES Fast Facts (Note: The primary purpose of the Fast Facts website is to provide users with concise information on a range of educational issues, from early childhood to adult learning.): <a href="http://nces.ed.gov/fastfacts/" target="_blank">http://nces.ed.gov/fastfacts/#</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>NOAA National Climatic Data Center</h3><p><img width="200" height="198" alt="" src="/live/image/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg" class="lw_image lw_image483 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/198/483_noaa_logo.rev.1407788692.jpg 3x" data-max-w="954" data-max-h="945"/>NOAA’s National Climatic Data Center (NCDC) is responsible for preserving, monitoring, assessing, and providing public access to the Nation’s treasure of <strong>climate and historical weather data and information</strong>.</p><p> Quick link to home page: <a href="http://www.ncdc.noaa.gov/" target="_blank">http://www.ncdc.noaa.gov/</a></p><p> Quick link to NCDC’s climate and weather datasets, products, and various web pages and resources: <a href="http://www.ncdc.noaa.gov/data-access/quick-links" target="_blank">http://www.ncdc.noaa.gov/data-access/quick-links</a></p><p> Quick link to Text & Map Search: <a href="http://www.ncdc.noaa.gov/cdo-web/" target="_blank">http://www.ncdc.noaa.gov/cdo-web/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The World Bank Data (U.S.)</h3><p><img width="130" height="118" alt="" src="/live/image/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg" class="lw_image lw_image484 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 2x, /live/image/scale/3x/gid/4/width/130/height/118/484_world-bank-logo.rev.1407788945.jpg 3x" data-max-w="1406" data-max-h="1275"/>The <strong>World Bank</strong> provides World Development Indicators, Surveys, and data on Finances and Climate Change.</p><p> Quick link: <a href="http://data.worldbank.org/country/united-states" target="_blank">http://data.worldbank.org/country/united-states</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Congressional Budget Office</h3><p><img width="180" height="180" alt="" src="/live/image/gid/4/width/180/height/180/380_cbo-logo.rev.1406822035.jpg" class="lw_image lw_image380 lw_align_right" data-max-w="180" data-max-h="180"/>Since its founding in 1974, the Congressional Budget Office (CBO) has produced independent analyses of budgetary and economic issues to support the Congressional budget process.</p><p> The agency is strictly nonpartisan and conducts objective, impartial analysis, which is evident in each of the dozens of reports and hundreds of cost estimates that its economists and policy analysts produce each year. CBO does not make policy recommendations, and each report and cost estimate discloses the agency’s assumptions and methodologies. <strong>CBO provides budgetary and economic information in a variety of ways and at various points in the legislative process.</strong> Products include baseline budget projections and economic forecasts, analysis of the President’s budget, cost estimates, analysis of federal mandates, working papers, and more.</p><p> Quick link to Products page: <a href="http://www.cbo.gov/about/our-products" target="_blank">http://www.cbo.gov/about/our-products</a></p><p> Quick link to Topics: <a href="http://www.cbo.gov/topics" target="_blank">http://www.cbo.gov/topics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>MapStats</h3><p> A feature of FedStats, MapStats allows users to search for <strong>state, county, city, congressional district, or Federal judicial district data</strong> (demographic, economic, and geographic).</p><p> Quick link: <a href="http://www.fedstats.gov/mapstats/" target="_blank">http://www.fedstats.gov/mapstats/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>USDA Nutrition Assistance Data</h3><p><img width="180" height="124" alt="" src="/live/image/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg" class="lw_image lw_image485 lw_align_right" srcset="/live/image/scale/2x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 2x, /live/image/scale/3x/gid/4/width/180/height/124/485_usda_logo.rev.1407789238.jpg 3x" data-max-w="1233" data-max-h="850"/>Data and research regarding the following <strong>USDA Nutrition Assistance</strong> programs are available through this site:</p><ul><li>Supplemental Nutrition Assistance Program (SNAP) </li><li>Food Distribution Programs </li><li>School Meals </li><li>Women, Infants and Children </li></ul><p> Quick link: <a href="http://www.fns.usda.gov/data-and-statistics" target="_blank">http://www.fns.usda.gov/data-and-statistics</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>National Bureau of Economic Research (Public Use Data Archive)</h3><p><img width="180" height="43" alt="" src="/live/image/gid/4/width/180/height/43/478_nber.rev.1407530465.jpg" class="lw_image lw_image478 lw_align_right" data-max-w="329" data-max-h="79"/>Founded in 1920, the <strong>National Bureau of Economic Research</strong> is a private, nonprofit, nonpartisan research organization dedicated to promoting a greater understanding of how the economy works. The NBER is committed to undertaking and disseminating unbiased economic research among public policymakers, business professionals, and the academic community.</p><p> Quick Link to <strong>Public Use Data Archive</strong>: <a href="http://www.nber.org/data/" target="_blank">http://www.nber.org/data/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>HUD State of the Cities Data Systems</h3><p><strong><img width="200" height="200" alt="" src="/live/image/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg" class="lw_image lw_image482 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 2x, /live/image/scale/3x/gid/4/width/200/height/200/482_hud_logo.rev.1407788472.jpg 3x" data-max-w="612" data-max-h="613"/>The SOCDS provides data for individual Metropolitan Areas, Central Cities, and Suburbs.</strong> It is a portal for non-national data made available through a number of outside institutions (e.g. Census, BLS, FBI and others).</p><p> Quick link: <a href="http://www.huduser.org/portal/datasets/socds.html" target="_blank">http://www.huduser.org/portal/datasets/socds.html</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Aviation Administration: Accident & Incident Data</h3><p><img width="100" height="100" alt="" src="/live/image/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg" class="lw_image lw_image80 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 2x, /live/image/scale/3x/gid/4/width/100/height/100/80_faa-logo.rev.1402681347.jpg 3x" data-max-w="550" data-max-h="550"/>The NTSB issues an accident report following each investigation. These reports are available online for reports issued since 1996, with older reports coming online soon. The reports listing is sortable by the event date, report date, city, and state.</p><p> Quick link: <a href="http://www.faa.gov/data_research/accident_incident/" target="_blank">http://www.faa.gov/data_research/accident_incident/</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Federal Reserve Economic Data (FRED®)</h3><p><strong><img width="180" height="79" alt="" src="/live/image/gid/4/width/180/height/79/481_fred-logo.rev.1407788243.jpg" class="lw_image lw_image481 lw_align_right" data-max-w="222" data-max-h="97"/>An online database consisting of more than 72,000 economic data time series from 54 national, international, public, and private sources.</strong> FRED®, created and maintained by Research Department at the Federal Reserve Bank of St. Louis, goes far beyond simply providing data: It combines data with a powerful mix of tools that help the user understand, interact with, display, and disseminate the data.</p><p> Quick link to data page: <a href="http://research.stlouisfed.org/fred2/tags/series" target="_blank">http://research.stlouisfed.org/fred2/tags/series</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>Internal Revenue Service: Tax Statistics</h3><p><img width="155" height="200" alt="" src="/live/image/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg" class="lw_image lw_image486 lw_align_left" srcset="/live/image/scale/2x/gid/4/width/155/height/200/486_irs_logo.rev.1407789424.jpg 2x" data-max-w="463" data-max-h="596"/>Find statistics on business tax, individual tax, charitable and exempt organizations, IRS operations and budget, and income (SOI), as well as statistics by form, products, publications, papers, and other IRS data.</p><p> Quick link to <strong>Tax Statistics, where you will find a wide range of tables, articles, and data</strong> that describe and measure elements of the U.S. tax system: <a href="http://www.irs.gov/uac/Tax-Stats-2" target="_blank">http://www.irs.gov/uac/Tax-Stats-2</a></p><p>See all <a href="/data-resources/">data and resources</a> »</p>
  • <h3>The Penn World Table</h3><p> The Penn World Table provides purchasing power parity and national income accounts converted to international prices for 189 countries/territories for some or all of the years 1950-2010.</p><p><a href="https://pwt.sas.upenn.edu/php_site/pwt71/pwt71_form.php" target="_blank">Quick link.</a> </p><p>See all <a href="/data-resources/">data and resources</a> »</p>