Spending on health care is becoming unsustainable in developed countries because of ageing populations, changing disease patterns and increasing patient expectations. To control costs, governments and funding organizations should be helping to steer the revolution in personalized medicine.

Protein-based biological drugs ('biologics'), for example, are expected to account for seven of the world's ten best-selling drugs by 2016, but they are hugely expensive. Anticancer biologics can cost up to US$100,000 per patient per year, even though they might extend life by just a few months.

Personalized medicine will ensure that such drugs are prescribed only to those patients who stand to benefit. These patients can be identified using molecular biomarkers to determine the genetic profiles of their diseases. Health-care funders should demand that companion biomarker tests become the norm for biologics and other expensive drugs, and should provide incentives for drug firms as necessary.

A pathway for approving cheaper, generic versions of biologics has now been established in the United States and the European Union. However, the need for detailed assessment of the clinical efficacy and safety of these drugs remains a major hurdle to their commercialization. Therefore, funders of health care may have to continue paying premium prices even once a biologic has lost exclusivity, making their personalized prescription all the more critical.