Personalized medicine, genetic tests and health insurance: a tighter trade-off between adverse selection and risk discrimination

David BARDEY Professeur associé, Université de Los Andes (Bogota) ; chercheur associé, Toulouse School of Economics. Contact : d.bardey@uniandes.edu.co.

Philippe de DONDER ** Directeur de recherches, CNRS, Toulouse School of Economics.

We are currently witnessing the emergence of personalized medicine, defined as the use of genetic information to better tailor individual diagnostic, prevention and treatment decisions. These medical and technological advances make it necessary to think through their consequences on health insurance markets. One major decision consists in deciding whether the information generated by genetic tests should be shared with health insurers.

This article first discusses the economic consequences of such a sharing of genetic information: risk discrimination if the information is not shared, and adverse selection if it is. We then discuss four different types of regulation of genetic information which are used around the world. We then present the main results of a recent study we have undertaken, which compares (using both a theoretical and an experimental viewpoint) two such regulations. We conclude with a few suggestions for further research.