forbes.com 
Cancer treatment depends on precise DNA testing. Modern medical treatment is sophisticated and expensive.
<On Friday, Pfizerannounced that its new gene-targeted lung cancer drug, Xalkori, will cost $9,600 per patient per month, meaning it could cost $80,000 or more for the average patient. But Xalkori is only effective in about 5% of patients whose tumors have a mutation in a gene called ALK. As biotech executive Gautam Kollu noted on Twitter, the real cost of the drug is $9,600 plus 25 ALK tests, because that’s how many patients will need to be screened for one to actually get Xalkori (which up until now was known by the generic name crizotinib.)
Abbott Laboratories makes the ALK test through its Vysis unit, and I asked a spokesman how much it would cost. Like the test for Roche’s Herceptin, a type of test called a FISH test is used. The spokesman said:
An ALK test, including the pathology service, will be approximately $1,500 (a one time cost). The price we charge for the test kit itself is less than $250, which is similar to other FISH tests.
It’s not clear to me whether or not all of that $1,500 represents costs that would not have previously been paid for these lung cancer patients (I’ve asked Pfizer and Abbott) but that could mean that for every person who gets Xalkori, the system will pay another $30,000 on top of the cost of the drug. (Update: Most of the cost is for pathology services, and multiple tests could be combined in that panel. See below.)
Given those costs, it’s easy to see how DNA sequencing in cancer might have a market in the future. That’s one of the big potential markets for companies like Illumina, Complete Genomics, and Life Technologies, which are sequencing whole human genomes at a cost of $5,000 or less. Remember, though, those technologies could carry extra pathology costs, too >
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