The Causes and Consequences of the Diffusion of Precision Medicine: Evidence from Innovations in Breast Cancer Medicine

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Project Summary/Abstract: Rapid advancements in DNA sequencing in the early 2000s paved the way for precision medicine - an approach to tailor disease prevention and treatment while taking into account differences in people’s genes, environments, and lifestyles. Today more than ten genetic tests enter the market every day, ranging from tests that help predict drug response to tests that predict disease risk. Yet, relatively little is known about the extent to which precision medicine has diffused into clinical practice and the consequences on the healthcare system. The proposed project studies this question in the context of breast cancer, a diagnosis which 254,744 individuals received in 2018 alone, and for which multiple technologies have recently become available to patients. One of the earliest precision medicine tools to reach the market was a genomic test that personalized the decision to administer chemotherapy to a patient (OncotypeDX). While historically, the majority of women with early-stage breast cancer would receive chemotherapy, with genomic-guided care, only women likely to benefit from chemotherapy would receive it. Using Medicare as an example, the overall objective of the proposed project is to understand the barriers to and facilitators of technological adoption by providers, and the consequences of technological adoption on the healthcare system. To accomplish this, the proposed research specifically aims to: (1) identify the effect of the introduction of OncotypeDX on provider practice patterns, patient health, and healthcare spending, (2) explore the characteristics of adopting providers, and (3) explore the role of financial incentives in provider technological adoption stemming from the 340B drug pricing program. Under the first aim, a staggered difference-in-difference design will be used to estimate the causal impact of provider technological adoption. For the second aim, key characteristics of provider technological adoption will be identified as well as the determinants of under-adoption. Under the third aim, the role of financial incentives in under-adoption will be estimated using variation stemming from the 340B program. The proposed project is innovative because it is uses novel empirical designs to estimate the causal effect of technological adoption at the population-level for an understudied class of technologies. The research proposed is significant because it provides insight into the role of providers in the diffusion and impact of precision medicine on the healthcare system, as well as the extent to which diffusion has been efficient and equitable. Identification of the determinants of provider technological adoption may point to effective targets for information and education campaigns. The proposed project aligns well with the Agency for Healthcare Research and Quality’s (AHRQ) research priority to increase the affordability and efficiency of health care.