Economics of Pharmacogenetic‐Guided Treatments: Underwhelming or Overstated?

Economic evaluations have dispelled a perception that precision medicine, achieved through pharmacogenetic testing, reduces healthcare costs. For many tests aimed at preventing adverse drug reactions, cost‐effectiveness analyses predict modest improvements in health benefits and increases in total costs. While there are many uncertainties in estimating the value of testing, factors that influence cost‐effectiveness include the rarity of the outcome, the effectiveness of alternative treatments, and the scope and perspective of analysis.