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Kellogg on Biotech

Pharmacogenomics: The Future of Healthcare

Aubrey Cattell KSM '06, William Gangi KSM '05, Michael Jensen KSM '06, and Shankar Swamy KSM '06

By any objective criteria, the United States healthcare system is broken. Drug companies face pressures and threats to their business model and practices, providers are perceived as puppets of either the drug industry or the managed care industry, payers find it nearly impossible to balance patient concerns of low quality care with shareholder concerns of higher profits, regulatory agencies are blamed for unsafe drugs, and patients are fed up with high prices and inadequate care.

One solution that could potentially address many of these problems is to move towards a pharmacogenomics model of healthcare, where scientists use their knowledge of individual genetic variations to create safer and more effective therapies. This vision of a new era in personalized medicine has existed for many years, but the pressures facing the healthcare system make this solution increasingly attractive as an alternative to the existing “blockbuster” model. Moreover, recent advances in genetics and diagnostics have finally made the technology viable for the first time.

This paper will attempt to answer several related questions. First, what is pharmacogenomics and what does this model have to offer each of the key players in the healthcare system? Second, what challenges remain for pharmacogenomics to become a viable part of our healthcare system? Finally, what companies are taking the initial steps towards realizing the promise of pharmacogenomics and how it could alter the future of the pharmaceutical industry.

©2007 Kellogg School of Management, Northwestern University