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Genetic testing gaining popularity, dropping in price

Newborn babies are pictured at the university hospital of Leipzig, eastern Germany, on January 2, 2012. Genetic testing of newborns is growing increasingly more popular.

David Brancaccio: Let's do a household budget. Mortgage? Check. Utilities? Check. How about the bill for genetic testing? A study by the UnitedHealth Group released this morning says we spent about $5 billion on genetic tests in 2010 and could spend $25 billion by the end of the decade.

To talk about this, joining us live from our health desk is Gregory Warner. Good morning.            

Gregory Warner:Good morning.

Brancaccio:So Gregory, genetic testing -- what, like tests that prgenant moms take to check for, maybe, Down's syndrome?

Warner: Exactly. And then, after they give birth, there's more tests. You can scan to see if a newborwn is susceptible to cystic fibrosis. Steve Jobs used genetic tests to pick the right drugs for his tumors. Right now there are over 1,000 different tests with three to five new tests coming out each month. Sometimes a single test can cost $3,000 to $4,000.

Brancaccio: I'm doing the math there -- 1,000 different tests; thousands of dollars per test. Even then though, $25 billion seems like a large number. How did we get there?

Warner: It doesn't quite add up, right? So I put that question to Harry Ostrer he's director of genetic and genomic testing at Montefiore Medical Center and a professor at Albert Einstein College of Medicine. His answer took less time than it took me to say his work title.   

Harry Ostrer: Whole genome sequencing.   

Whole genome sequencing -- this is where you sequence every gene in your DNA in just one test. And the cost of that just slipped under $1,000. That puts us into the territory where it's starting to be cheaper to have all your genes sequenced than any one specific disease. And that means doctors are going to be a lot more willing to scan your genes. Insurers are going to be a lot more willing to pay for it.

In fact, Harry Ostrer is in dialogue now with the New York Board of Health about changing their policy for newborns instead of giving them a battery of 45 different tests, just scan all their genes. You get a lot more information; it may cost less -- of course, when costs go down, demand goes up. That's going to happen, he says, in the genetic market.

Brancaccio: All right, just scan 'em all. Marketplace's Gregory Warner. Thank you very much.

Warner: Thanks.

About the author

Gregory Warner is a senior reporter covering the economics and business of healthcare for the entire Marketplace portfolio.

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