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The American Journal of Managed Care January 2017
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The Challenge of Paying for Cost-Effective Cures
Patricia J. Zettler, JD, and Erin C. Fuse Brown, JD, MPH
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The Social Value of Childhood Vaccination in the United States
Tomas J. Philipson, PhD; Julia Thornton Snider, PhD; Ayman Chit, PhD; Sarah Green, BA; Philip Hosbach, BA; Taylor Tinkham Schwartz, MPH; Yanyu Wu, PhD; and Wade M. Aubry, MD
Value-Based Payment in Implementing Evidence-Based Care: The Mental Health Integration Program in Washington State
Yuhua Bao, PhD; Thomas G. McGuire, PhD; Ya-Fen Chan, PhD; Ashley A. Eggman, MS; Andrew M. Ryan, PhD; Martha L. Bruce, PhD, MPH; Harold Alan Pincus, MD; Erin Hafer, MPH; and Jürgen Unützer, MD, MPH, MA
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Joel S. Weissman, PhD; Michael L. Millenson, BA; and R. Sterling Haring, DO, MPH
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The Value of Survival Gains in Myelodysplastic Syndromes
Joanna P. MacEwan, PhD; Wes Yin, PhD; Satyin Kaura, MSci, MBA; and Zeba M. Khan, PhD
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Justin Blackburn, PhD; David J. Becker, PhD; Michael A. Morrisey, PhD; Meredith L. Kilgore, PhD; Bisakha Sen, PhD; Cathy Caldwell, MPH; and Nir Menachemi, PhD, MPH

The Value of Survival Gains in Myelodysplastic Syndromes

Joanna P. MacEwan, PhD; Wes Yin, PhD; Satyin Kaura, MSci, MBA; and Zeba M. Khan, PhD
This study measured the value of survival gains attributable to the introduction of 3 novel therapies for myelodysplastic syndromes.

Objectives: To measure the value of survival gains attributable to the introduction of 3 novel therapies for myelodysplastic syndromes (MDS).

Study Design: Retrospective study of patients diagnosed with MDS in the Surveillance, Epidemiology and End Results Program (SEER) registry, clinical trial evidence for MDS therapies, and claims data.

Methods: We used multivariate Cox proportional hazards models to estimate the increase in survival associated with the introduction of the 3 new therapies for patients diagnosed with MDS from 2001 to 2011 in the SEER cancer registry. Increases in survival associated with the 3 novel therapies were estimated using retrospective survival analyses and published clinical trial evidence. MDS treatment costs were estimated using Ingenix claims data and used to calculate the share of the value of survival gains retained by patients.

Results: We estimated that the introduction of these 3 therapies is associated with a hazard ratio of 0.901 (P <.10), and a 73% increase in median survival from 33 to 57 months. We estimated that for current and future MDS patients, these 3 therapies will generate over $193 billion in cumulative value through extensions in patient survival.

Conclusions: This study demonstrates that the value of recently approved innovative therapies in MDS is large and that the value of survival gains in MDS far outweighs their costs.

Am J Manag Care. 2017;23(1):e10-e15
Takeaway Points
  • Innovative treatments for myelodysplastic syndromes (MDS) have generated significant benefits for patients by markedly extending survival. 
  • The value of survival gains far outweighs their cost, suggesting that improving patient access to these MDS therapies is warranted. 
  • The value of survival gains represents a conservative estimate of the total value of innovative treatments for MDS to society, which also includes the value of medical cost offsets, productivity gains, and other sources of value, such as reduced caregiver burden.
Over the past several decades, innovation in both the detection and treatment of cancer has resulted in improved survival rates.1,2 Several tumor types—including breast,3 colon,4 chronic myeloid leukemia (CML),5,6 multiple myeloma,7 and non-Hodgkin lymphoma8—have experienced dramatic gains in survival, due in part to the introduction of targeted therapies, such as tyrosine kinase inhibitors (TKIs), vascular endothelial growth factor (VEGF) targeted drugs, immunomodulators (IMiDs), and proteasome inhibitors, among others.9,10 In contrast to conventional chemotherapies that kill rapidly dividing cells—whether cancerous or not—targeted therapies inhibit cancer cell growth and improve survival by interfering with specific molecular targets.11

Several clinical trials investigating novel targeted therapies for myelodysplastic syndromes (MDS) have demonstrated improvement in overall survival (OS) and progression-free survival (PFS).12,13 For example, azacitidine has been shown to successfully improve OS and quality of life,14 increasing median OS by nearly 10 months, while reducing the risk of fatal complications.13 Similarly, patients with MDS being treated with decitabine exhibited better overall response and PFS, and patients responsive to lenalidomide had a significantly lower risk of death or progression to acute myeloid leukemia (AML) after 6 months, compared with patients with MDS being treated with a placebo.15-17

The existing literature demonstrates that the return on investment in advances in treatments for cancer and acute myocardial infarction, among others, has been large, but may not be constant over time.18-20 This study contributes to the larger debate surrounding the value of medical innovation and the need for studying value in specific disease, time, and geographic contexts, given ongoing movement toward linking reimbursement to value. The introduction of novel targeted therapies, in MDS and elsewhere, coincides with increased scrutiny toward the relative value and cost of cancer therapies more generally.21-23 This attention motivates rigorous evaluation of the economic value of new cancer therapies, where value captures improved survival, improved quality of life, reduced caregiver burden, as well as other dimensions of value.24 In one recent analysis of CML, Yin et al (2012) measured the value generated by new novel targeted therapies along 1 dimension of value: survival gains. They estimated that the survival gains attributed to the introduction of TKIs generated significant social value.25 Similarly, studies on the value of improvements in cancer survival and mortality find that these gains have significant societal value.26,27

For MDS, to our knowledge, there are currently no analyses that measure the value of survival gains attributable to innovative therapies relative to their cost.28 Moreover, no study has measured MDS survival gains in the real world, where benefits may differ from those observed in clinical trials. This study addresses this gap in the literature. We estimated the value of survival gains in MDS from the introduction of 3 targeted therapies: azacitidine, decitabine, and lenalidomide. Following the analytical framework applied in Yin et al (2012),25 this study used data from the Surveillance, Epidemiology, and End Results Program (SEER) cancer registry database for 2001 to 2011, to estimate survival gains in the real world as a result of the introduction of these 3 therapies. We then calibrated an existing economic model to value the estimated increases in survival.29 Finally, we used the Ingenix Touchstone commercial claims database (Ingenix) to estimate treatment costs, which we compared with the total value of survival gains.


Survival Analysis

We conducted 3 distinct subanalyses. In the first, we used SEER registry data from 2001 to 2011 for patients with MDS, and Cox proportional hazards models to estimate the increase in survival in the real world due to the introductions of key new therapies for MDS between 2001 and 2011. The primary independent variables in the survival models were the binary variables that indicated when new therapies were introduced (Table 1). Prior to 2001, the International Classification of Disease classified MDS as a blood disorder rather than a neoplasm, making the identification of MDS (diagnosed prior to 2001 in SEER) problematic. Therefore, we restricted our analysis to patients diagnosed in 2001 or later.

We included a binary independent variable—YEARS2004-2005—that takes a value of 1 in (diagnosis) years 2004 and 2005, and another binary independent variable—YEARSPost2006—that takes a value of 1 in years 2006 to 2011. The regression coefficient on YEARS2004-2005 captures the survival effect of the introduction of azacitidine (introduced in 2004); and the coefficient on YEARSPost2006 captures the effect of the introductions of lenalidomide (approved in late 2005) and decitabine (introduced in 2006), as well the availability of azacitidine. Because all 3 therapies have been available from 2006 on, we were only able to estimate the combined effect of the availability of all 3 therapies for MDS from 2006 to 2011. The hazard ratio (HR) associated with the YEARSPost2006 variable is the primary estimate of the combined effect of new therapies on MDS survival, and is the key input into our economic model of the value of survival gains.

Importantly, in order to interpret the HR associated with the YEARSPost2006 as the combined effect of the 3 therapies, we included a set of flexible time variables to capture the secular trends in survival that are unrelated to the introduction of azacitidine, lenalidomide, and decitabine. In this way, we would not confound the estimated impact of new therapies on survival with these unrelated changes in MDS survival. In our final specification, we included a cubic annual time trend. We also controlled for a rich set of patient demographic characteristics, including age at diagnosis, gender, tumor sequence, and race. This ensured that changes in survival due to changes in case mix over time would not be incorrectly attributed to the impact of new therapies for MDS.

Because SEER lacks information on which specific therapies patients utilize, the hazard model allowed us to estimate the average impact of new therapy introduction on the entire MDS population, including patients undergoing treatment with therapies other than azacitidine, lenalidomide, and decitabine. Hence, our regression estimates captured the “intended to treat” (ITT) effect of the 3 therapies on MDS survival. To estimate the survival impact on those treated by the new therapies (ie, the “treatment on the treated” (TOT) effect), we used the Ingenix claims data to calculate the average share of patients with MDS being treated by the new therapies between 2006 and 2011. We then scaled the ITT effect by the share of patients treated with the novel therapies to calculate the TOT effect.

Value of Survival Gains

To estimate the value of survival gains in MDS, we applied methods developed by Becker, Philipson and Soares (2005),30 which allowed us to estimate the value patients place on increased longevity. This method involved calibrating an economic model to calculate the utility of patients with cancer when facing the baseline survival curve, as well as the utility curve when faced with an improved survival curve attributable to new treatments. This model also allowed us to estimate the dollar amount that would make baseline patients with cancer as well off as patients with the improved survival, holding all else equal. Following Becker, Philipson, and Soares (2005), we interpreted this dollar amount as the value of the survival gain.

Because utility in this framework depends on the value of consumption while alive, this dollar amount depends on patient income levels, which, at a very general level, dictates patients’ ability to consume goods, including healthcare. The model was therefore calibrated to the income level of patients with cancer, in addition to discount rates, marginal utility of consumption, and other standard economic parameters, as summarized in Becker, Philipson, and Soares (2005) (see eAppendix for further details [available at]).30

The economic model takes as inputs the estimated survival gains, as well as patient “full” income levels, as the total value of time available for work and leisure.31 We estimated patient income using the Medical Expenditure Panel Survey (MEPS) data from 2010 and 2011.32 However, MEPS did not have a sufficient number of patients with MDS (who fall into the “other” cancer category) to allow for the estimation of tumor-specific estimates of income; therefore, to produce reliable estimates of annual income, we estimated the expected annual earnings and full income of all patients with cancer, 18 years or older, assuming earned income reflects 8 hours of work per day and, therefore, full income equals double earned income.

We estimated the annual treatment costs of these 3 therapies using claims data from the Ingenix database for years 2006 to 2012, averaging across years and inflating to 2013 dollars using the Bureau of Labor Statistics Consumer Price Index.33 The Ingenix database is a private sector health insurance claims–based database that combines information from a wide array of different insurance providers. The database captures all healthcare claims, including prescription drugs, and inpatient, emergency, and ambulatory services for elderly and nonelderly individuals with employer-provided insurance from more than 50 large Fortune 500 firms. We calculated the present discounted value (PDV) of the increase in survival for a single patient over his or her lifetime, where value and costs in later years are weighted by each year’s estimated survival probability. Finally, we calculated the PDV of the lifetime value and costs for all future patient cohorts.

The total PDV of the lifetime survival gains and costs considers future MDS incident cohorts together with the current cohort, assuming a 3% discount rate, and accounts for patent expiry: generic versions of azacitidine and decitabine became available in 2013, and the lenalidomide patent will expire in 2027. How much prices decline following patent expiry depends on several factors, including the number of generic manufacturers that enter the market, the complexity of producing the molecule, outpatient rather than pharmacy benefit coverage, branded-drug market share, the number of competing therapies, and the length of time since patent expiry.34 For these reasons, the effect of patent expiry on the price of specialty drugs like oncologics may be different than the effect of expiry on nonspecialty drugs. To accommodate for this uncertainty in post patent expiry drug prices, we used a conservative estimate of the effect of patent expiration on drug prices. A recent study estimates that intravenously administered specialty drugs decline by 34% after patent expiry, and that oral specialty drugs decline by 21% after patent expiry.34 We used these price declines when forecasting future costs of generic azacitidine, lenalidomide, and decitabine treatment in MDS.

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