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 / Winter 2012 / Issue 69(originally published by Booz & Company)


A Strategist’s Guide to Personalized Medicine

That is why they need a plan for implementing personalized medicine. To be successful, they will need to take into account three elements of their current reality: first, the prospects for innovation; second, the right value proposition; and third, the capabilities needed to deliver on that proposition.

A New Form of Pharma R&D

Back in the age of economies of scale, most drug companies’ business models depended on producing therapies for the largest number of people with unmet medical needs: cimetidine (GlaxoSmithKline’s Tagamet) for excess stomach acid, lovastatin (Merck’s Mevacor) for high cholesterol, and naproxen (Bayer’s Aleve) for aches and pains. Even biotech’s early successes, starting in the 1970s, were conceived as mass-market products: epoetin alfa (Amgen’s Epogen) for anemia, recombinant insulin (Lilly’s Humalog) for diabetes, and etanercept (Pfizer and Amgen’s Enbrel) for autoimmune diseases like rheumatoid arthritis and psoriasis. Each represented a multibillion-dollar franchise sustained for many years — and together, they reduced many causes of early mortality, helping raise the average human life span.

But an aging population also means that chronic diseases — including immune-mediated diseases such as cancer, metabolic diseases such as diabetes, and neurological diseases such as dementia — have become more prevalent. Unlike the acute killers of previous generations, these diseases tend to affect people in a relatively heterogeneous manner. Depending on their genetic makeup, people are susceptible to different disease strains and may respond in different ways to the same medication. For illnesses like these, the healthcare system can no longer afford a trial-and-error approach to pharmaceutical research, in which physicians attack diseases with one compound after another in hopes of finding one whose benefits to the patient will outweigh its side effects.

With personalized medicine, segmentation begins at the research stage. A PMx team seeks out patient populations that can be identified using biomarkers. A biomarker is a measurable substance in an organism — a gene, protein, or other biological element — whose presence has been linked to a pathology, such as cancer or autoimmune disease. A biomarker may also be a genetic variant that indicates an individual’s potential response to a particular drug. Drugs are tailored to relatively small, well-defined patient groups, segmented by these markers; the Dx enables the Rx.

This type of pharmaceutical research first led to a marketable product in 1998, when the FDA approved Herceptin — a breast cancer drug developed by Genentech. Herceptin works in only about 25 percent of breast cancer patients. Ordinarily a drug that did not work for three-quarters of the patient population would have failed to win regulatory approval. But researchers at Dako AS, a diagnostics company based in Denmark, devised an accompanying assay (an analysis of the presence of a substance or genetic indicator) showing elevated levels of a protein marker called HER-2 in patients who responded. The FDA approved the medication for only that group of people. Herceptin is now a drug with yearly sales of $6 billion.

Since Herceptin, companies have used pharmacogenomic assays (tests based on genetic biomarkers) to resuscitate drugs that would have failed clinical trials or to manage the potential danger of side effects. Because many cancers are prompted by mutations in the genetic code, oncology has been the most fertile early ground for these drugs. For example, Erbitux and Vectibix were developed for colorectal cancer, but they work only in people whose tumors have a mutation in the EGFR gene and a normal KRAS gene, and thus are prescribed only after positive responses to assays for those variants.

Personalized medicine could be applied to a wide range of chronic diseases. As knowledge of the human genome expands, new and old drugs alike can be made more viable through genetic testing. Strattera (atomoxetine), a drug used for attention-deficit hyperactivity disorder, was linked to liver damage for patients with a mutation in the CYP2D6 gene. It is now marketed with a pharmacogenomic assay to rule out this population. Warfarin and Plavix, two blood thinners, can cause excessive bleeding among patients with particular genetic variations. Testing can show which patients should get other medicines.

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  1. Marcus Ehrhardt, Robert Hutchens, and Susan Higgins, “Five Steps toward a Revitalized Pharmaceutical Supply Chain,” s+b, Spring 2012: Companies embracing personalized medicine will need to build these operational capabilities.
  2. Gil Irwin, Art Kleiner, and Joyjit Saha Choudhury, “When Disruptive Integration Comes to Health Care,” s+b, Mar. 3, 2010: The Innovator’s Prescription coauthor Jason Hwang talks about the next wave of healthcare business models.
  3. Alex Kandybin and Vessela Genova, “Big Pharma’s Uncertain Future,” s+b, Spring 2012: As the era of the blockbuster drug comes to an end, the industry must cope with new unknowns.
  4. For more thought leadership on this topic, see the s+b website at:
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