NEW YORK (Reuters) - President Barack Obama's plan to put the United States at the forefront of individually tailored medical treatment should give a much-needed boost to research in the field but experts say it won't work without reforms to healthcare, including drug testing and insurance.

The administration is expected to give the first details this week on the "precision medicine" initiative that Obama announced in his Jan. 20 State of the Union address. Obama said he wanted the United States to "lead a new era of medicine, one that delivers the right treatment at the right time."

Precision medicine seeks to identify and treat the exact form of disease in patients based on their genome - the precise order of molecules in their DNA - as well as other factors such as the interaction of genes and environment, and the microbes in their body.

Rather than the current one-size-fits-all approach, drugs would be tailored to individuals, allowing doctors to target the precise form a disease takes in any individual and avoid administering drugs that may be ineffective or even harmful.

"We'd be able to make diagnoses and treatment calls at the level of the individual. We are very, very far from doing that, but the payoff would be fantastic," said biologist Keith Yamamoto, vice chancellor of research at the University of California, San Francisco, medical school.

If Obama's initiative is to work, a first step is to build a national database of genetic profiles so researchers can look for correlations with their medical histories.

A 2011 report from a panel of the National Academy of Science recommended collecting molecular data on millions of patients. It also called for a type-2 diabetes project to identify the amino acids in the blood of people who develop the disease, and assess how pre-diabetes becomes full-fledged.

Nearly four years later, neither study is under way. Obama's initiative could breathe life into them, said two panel members who asked not to be identified.


Precision medicine has been propelled by advances in two areas in particular: cancer and pharmacogenomics, the study of how DNA interacts with drugs. Research has found that diseases such as breast cancer and lung cancer are not monolithic; they can be driven by a variety of genetic mutations.

Among the larger companies in genome sequencing which could benefit from Obama's initiative are Illumina Inc, which this month agreed an alliance with defense giant Lockheed Martin on genomics development; Thermo Fisher Scientific's Life Technologies unit and Roche Holding AG, which in January paid $1 billion for a majority stake in Foundation Medicine Inc, a leader in sequencing genes in tumors.

Google Inc and IBM Corp are among big firms that could play a role in storing and interpreting electronic health records and genomic and other data.

"The field has a tremendous need to crunch data and turn it into useful information," said Lynn Etheredge, director of the Rapid Learning Project, which aims to harness electronic health records and other data to improve medical care.

One barrier to change is that government and private health insurance does not routinely cover genetic testing. The federal Medicare program, for instance, declined in 2009 to cover a routine genetic test to predict how a patient's cancer would respond to anti-clotting drug Warfarin.

But overall healthcare costs could be reduced by genetics because "insurers could stop paying for drugs that don't help people," said UCSF's Yamamoto.

To make precision medicine mainstream, regulators would have to change how they review and approve drugs.

In the current system, the Food and Drug Administration specifies a condition for which a drug can be marketed. Insurance companies as well as government programs such as Medicare and Medicaid almost never pay for other uses.

With precision medicine, conditions would be classified far more specifically - for example, as a cancer driven by a certain gene mutation rather than simply "breast cancer."

"I can see the administration telling FDA and Medicare to create systems for approving and paying for drugs on the basis of molecular biology," said Etheredge.

By Sharon Begley and Toni Clarke

(Editing by Stuart Grudgings)