Applying the Transaction Cost “3P” Theory to the Economics of Genomics Medicine

The Transaction Cost Political approach called “3P theory” focuses on the inclusion of political processes, integrating bargaining or countervailing powers of major economic actors on the supply side and main stakeholders on the demand side in medical markets. It leads to consider Politics as one of the main Ps of the marketing strategy of firms, so it modified the traditional marketing mix of companies with respect to valuing and positioning products and services; pharmaceutical companies, in such regulated markets, need to provide an Acceptable Cost/Benefit Ratio or Benefit/Risk ratio to gain market access, get approved by the regulatory agencies and then be accepted for reimbursement by public and private payers. An additional contribution of the “3P TCP theory”, to explain the medical market dynamics, is to also consider the Ps on the demand side: they include the responses of professionals and patients and can also be called 3P: P for Physicians, P for Pharmacists and P for patients. In each system, the critical decision points at individual level, may differ, as well as cost reduction strategies towards affordable access to medical products and services for the patient. This paper proposes a reflection on issues to apply this type of analytical approach for the economics of genomic medicine, since the growth of genomic, genetic and other life science data leads to medicine. paradigm shift towards precision medicine and emphasize the individual level of strategic decision making in learning health systems. Therefore, it may benefit from such a Transaction Cost political analysis, between players, at individual level of decision makers and their interactions.