Deep Dive into Pharmacogenomics: Deploying Precision Medicine in Drug Prescribing

A rapidly developing field, pharmacogenomic testing is a promising tool that may ultimately lead to better patient care optimization, elimination of waste and lower costs. 


July 15, 2021

Precision medicine has great potential to improve patient care and outcomes. The speed of clinical progress has been unprecedented, most notably benefiting patients at risk for, or affected by, genetic conditions.

Pharmacogenomic (PGx) testing (also referred to as drug-gene testing or DNA drug sensitivity testing) is rooted in the science of understanding drug-gene interactions and how genetic variability governs therapeutic outcomes. A patient’s unique genetic signature (or, in this case, “pharmacogenes”) can dictate how medications are absorbed, distributed, metabolized and eliminated (patients may break down a medication either too quickly or too slowly). Pharmacogenes may also determine the appropriate site of action for a medication.

Through the DNA sequencing of a simple blood or saliva sample, PGx testing may ultimately provide critical information about appropriate medicationdosingsite of administration and side effects.1 As such, these tests can be an important tool for optimizing a patient’s medication regimen and ensuring the best possible treatment outcome.2

Fast Facts

  • 34% of adverse drug reactions are caused by gene-drug reactions.3
  • Overall, 18%, or 720 million prescriptions, in the U.S. may be affected by actionable pharmacogenomics – 4 billion prescriptions in the U.S. each year.3
  • 99.5% of individuals carry at least one pharmacogenetic variant.4
  • 45.8% of the U.S.populationuses prescriptiondrugs (85% of adults aged 60+).5
  • 13.6% of the top 300 most prescribed medications can be informed with pharmacogenetic testing.6

Clinical Implications and Patient Eligibility

Precision medicine is becoming an integral component of health care diagnoses and treatment. PGx testing is a critical piece of this evolution and has the potential to change certain medication prescribing practices. Specifically, PGx testing has been hailed as a solution to age-old trial-and-error prescribing methods,7 which are often criticized for causing delay in reaching the optimal treatment protocol, jeopardizing patient confidence in treatment and compliance and contributing to waste within the health care system. PGx testing may help to pinpoint the most efficacious prescribing regimen from the outset and ward against potential drug incompatibility, overdosage and underdosage – all of which lead to treatment inefficiency, potential harm to the patient and waste. It is important to note that while a patient’s age, sex, BMI, smoking history, vitamin K intake and concurrently taken drugs can significantly influence drug efficacy, genetic variations in specific enzymes can largely dictate patient response as well.8

Pharmacogenomic testing is paving the way for other precision medicine applications like companion diagnostics and complementary diagnostics.9 What are the key differentiators among them?

While pharmacogenomic testing focuses on the genotype of the patient to determine drug compatibility, companion diagnostic testing focuses on the genotype of a patient’s cancerous cells (i.e., tumor cells). The companion diagnostic is tied to the expected efficacy of a particular therapeutic product – a “companion” to this product9 and referenced as a recommendation or requirement within the drug label/treatment guidelines.10 While companion diagnostics are linked to a specific drug, complementary diagnostic testing is typically associated with a broader class of drugs and is not restricted to specific uses by labeling.11

How Does It Work?

It is important to note that one single PGx test cannot determine how a patient will respond to all medications; if a patient is on more than one drug, additional PGx tests may be needed. Furthermore, these tests are not available for all medications.12 A patient’s physician will determine whether PGx testing is needed prior to beginning a new drug regimen and will order the test accordingly. DNA from a patient’s blood or saliva sample is then sequenced in the lab. Results are often delivered to clinicians based on a red/yellow/green (“stoplight”) scheme that offers guidance on standard prescribing practice (Green – “Proceed” or use as directed), modified prescribing practice (Yellow – “Modify” due to a moderate gene-drug interaction) and avoid or modified prescribing practice (Red – “Adjust or Avoid” due to a significant gene-drug interaction).13

The following patients are most likely to benefit from PGx testing (where PGx testing-applicable medications are being used or in question)14:

  • Those on a number of different medications simultaneously (i.e., “polypharmacy patients”);
  • Those with chronic conditions being treated by multiple providers;
  • Those with high emergency department (ED)/urgent care/hospital utilization;
  • Those on complex or new medications requiring specialized administration and ongoing monitoring/outcomes assessment;
  • Those in transition care;
  • Those who have had previous adverse reactions to medications; and
  • Those who have demonstrated poor adherence/erratic maintenance of intended therapy goals.

Early Progress in Specialty Areas

PGx testing has demonstrated utility across a number of specialty areas, including cardiology, pain management, behavioral health and oncology.


Patients utilizing the anti-thrombotic drug class (e.g., warfarin and clopidogrel) are strong candidates for PGx testing, given that the therapeutic range of these drugs is extremely narrow and that they elicit high inter- and intra-patient variability in response.8 The discovery of relevant genetic polymorphisms (CYP2C9 and VKORC1 in the case of warfarin and CYP2C19 in the case of clopidogrel) led to Food and Drug Administration (FDA) revisions in the warfarin and clopidogrel drug labels to include pharmacogenomic information in 2007 and 2009, respectively.15


PGx testing (mainly in the form of companion and complementary diagnostic testing) has become an integral component of breast cancer treatment, especially with respect to utilization of the monoclonal antibody trastuzumab (Herceptin). It has been recognized that the HER2 receptor gene may be overexpressed in nearly one-fourth of all patients with breast cancer, corresponding to increased tumor formation and metastasis and resistance to chemotherapy. Having a handle on this variability in the HER2 receptor gene can help oncologists better tailor an alternative treatment regimen for patients who overexpress this gene. There have been significant PGx strides in the lung cancer and colorectal cancer spaces as well.15

Behavioral Health

PGx testing has shown great potential for utility in the behavioral health space. Indeed, several genome-wide association studies have identified genetic variants that may influence a patient’s response to antipsychotic and antidepressant agents.15 This is especially important considering the Centers for Disease Control and Prevention’s (CDC) National Health and Nutrition Examination Survey findings: During 2015-2018, 13.2% of U.S. adults (18 and over) used antidepressant medications.16 Strikingly, less than 40% of patients taking antidepressants succeed on their first treatment.17 It has been shown, however, that once genetic variants are examined and targeted through PGx testing, patients may demonstrate as much as an 83% improvement in remission.18 With one in six U.S. adults likely to develop a major depressive disorder (MDD) and potentially the need for medication in their lifetime19, such targeted treatment through PGx testing may have a tremendous impact. Still, many researchers and physicians await more widespread statistically significant evidence before encouraging the mass consumption of these tests.20 

Translation into Clinical Practice: Is PGx Testing Ready for Prime Time?

PGx testing, as a field, has seen rapid growth and development in recent years; however, it continues to face several hurdles on its way to becoming “mainstream” in clinical practice. Below are areas that require additional attention from manufacturers, physicians and payers alike.

  • Cost-effectiveness data: While there is evidence that supports the cost effectiveness of testing for certain gene-drug pairs via pharmacoeconomic evaluations21,22, on the whole, there is a lack of comparative- and cost-effective data to demonstrate that all testing costs are justifiable based on clinical outcomes.23 Fortunately, overall, the cost of genetic testing has come down significantly in recent years.24
  • Physician education: There is a significant need for educational programs and standardized criteria to guide the utilization of pharmacogenomic data in clinical decision-making.25 Many clinicians feel as though they do not have adequate training in pharmacogenomics.26 Studies have shown that physicians who are not educated by a pharmacist trained in PGx testing are far less likely to adopt this testing in clinical practice.27 However, there is at least a greater awareness of the science due to emerging targeted therapies in the oncology treatment space. Indeed, given the prevalence of these tests and others in the pipeline, prescribers generally have more acceptance and understanding.
  • Reimbursement hurdles: Insurance reimbursement for testing is largely tied to cost-effectiveness data which, as previously indicated, is not widely available in this arena. As a result, most private insurers have been reluctant to adopt widespread reimbursement policies. Today, most diagnostic tests in the U.S. are paid for based on Current Procedural Terminology (CPT) codes and Medicare clinical laboratory-fee and physician-fee schedules.7 However, many agree that pharmacogenomic tests are prime candidates for value-based pricing, pay-for-performance or even money-back guarantee arrangements.28
  • Regulation: The following federal agencies regulate genetic tests: the Food and Drug Administration (FDA), the Centers for Medicare and Medicaid Services (CMS) and the Federal Trade Commission (FTC). However, not every test on the market today is regulated.29 There is a need for a clearer regulatory path and standardized labeling practices.30
  • Quality assurance: With new genetic biomarkers being discovered at such a rapid pace, it becomes exceedingly difficult (yet all the more important) to keep up with establishing (and adjusting) quality assurance and proficiency guidelines. Best practices with respect to technical performance, analytical validation, clinical interpretation and proficiency are key and must be firmly established.31,32
  • Delivery: In order to make sound on-the-spot decisions about clinical treatment/drug dosing, physicians would ideally need to be able to have pharmacogenomic testing performed and results available on a point-of-care basis. This is not always possible, as these tests rely heavily on polymerase chain reaction (PCR) analysis.33 Typically, it takes a lab 2-4 weeks to turn around a PGx test. Furthermore, there is a need for standardized assays than can be relied upon in a routine clinical setting. Each lab has the ability to customize what they are testing for, so one lab might pick up on an anomaly while another lab might not. Assay design truly depends on the purpose of the test. Ultimately, testing methods and logistics of the testing [e.g., when to test, integration of results into electronic health record (EHR) systems] should be taken into consideration, along with capabilities of integrating results into clinical workflow to make treatment decisions.34
  • Privacy: Confidentiality is often raised as a key consideration when it comes to PGx testing.35 While the Genetic Information Nondiscrimination Act (GINA) was passed by Congress in 2008 to protect against misuse of genetic information by employers and insurers, it has been argued that perhaps it is more symbolic than anything, considering that employers are still permitted to request access to health records of potential employees, which may include genetic information.36Additionally, those who provide life insurance are technically not banned from using genetic data to choose plan participants.37 HIPAA standards prevent disclosure of genetic information when it is held by “covered entities,” including health care providers, hospitals, pharmacies and insurance carriers. This protection, however, does not apply to individuals who seek private health insurance in the individual market. Further, there are no standards related to informed consent for genetic testing.35

Key Considerations for Employers

  • Seek general guidance about PGx testing from your health plans, PBMs and clinical consultants to ensure that you understand the advantages, challenges and implications associated with testing compliance.
  • Talk to your health plan and PBM partners about which PGx tests (if any) are covered as well as associated coverage guidelines. In particular, inquire as to which drugs will necessitate a PGx test prior to approval. Ask about how these tests will be billed and identified in claims data and be sure to understand where there may be overlap between the pharmacy and medical benefit.  Consider asking your vendor partners for data analysis that can shed light on member utilization.
  • Employers now have an opportunity to partner with entities that can identify and work with employees who may benefit the most from PGx tests. Talk to these potential vendor partners about how PGx testing would be integrated into an existing benefits strategy with your health plan/PBM. Some employers may choose to house a PGx program under their well-being solution strategy.
  • Enable your vendor partner(s) to leverage claims data accordingly to identify the appropriate patients for PGx testing.
  • Consider whether you’d like to target all therapeutic classes and offer PGx testing to all members or only select ones (e.g., behavioral health medications) as part of a disease management strategy.
  • Inquire about the member experience. How will employees be approached, tested and informed about results/next steps? What sort of patient navigation and guidance exists as a follow up to testing?
  • Devise a plan for educating employees, answering questions and promoting the benefit while underscoring how confidentiality is handled and maintained through the vendor partnership.
  • Most information/insights on PGx testing have been collected from adult populations; however, some information can be extrapolated for pediatric care – but not always. The industry has strong data for oncology drugs, but less informative data for behavioral health/pain management drugs. Ask your partners how they handle PGx testing for minors/dependents.

Looking Ahead

Today, the FDA is approving an increasing number of drug labels that include genetic biomarker information – a trend that has gained significant momentum over the past decade. While few labels actually require PGx testing prior to treatment38, the mere inclusion of this biomarker information is enough to spark additional research and an increase in the number of pharmacogenomic tests available.28

Pharmacogenomic insights about drug efficacy can be illuminating and have the potential to improve patient safety and experience, as well as generate payer cost savings. However, before PGx testing can become mainstream, the industry must address the many scientific, economic, legal and commercial barriers that still exist – work that will require a multistakeholder approach.37

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More in Benefits Strategy


  1. Clinical Implications and Patient Eligibility
  2. Early Progress in Specialty Areas
  3. Translation into Clinical Practice: Is PGx Testing Ready for Prime Time?
  4. Key Considerations for Employers
  5. Looking Ahead