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Dynamic Cost-Effectiveness of Oncology Drugs
Yang Lu, PhD; John R. Penrod, PhD; Neeraj Sood, PhD; Saarah Woodby, BA; and Tomas Philipson, PhD
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Value of Survival Gains in Chronic Myeloid Leukemia
Wesley Yin, PhD; John R. Penrod, PhD; J. Ross Maclean, MD; Darius N. Lakdawalla, PhD; and Tomas Philipson, PhD
Appendix B -- Value of Survival Gains in Chronic Myeloid Leukemia
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Yuri Sanchez, PhD; John R. Penrod, PhD; Xiaoli Lily Qiu, PhD; John Romley, PhD; Julia Thornton Snider, PhD; and Tomas Philipson, PhD
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eAppendix -- New Approaches to Measuring Value in Oncology Therapy
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Value of Survival Gains in Chronic Myeloid Leukemia

Wesley Yin, PhD; John R. Penrod, PhD; J. Ross Maclean, MD; Darius N. Lakdawalla, PhD; and Tomas Philipson, PhD
Although clinical trial data have quantified patient survival gains associated with tyrosine kinase inhibitors in chronic myeloid leukemia, the overall value of these benefits is unknown.
Table 1 shows the patient characteristics of all CML patients in the SEER registry and the SEER CML sample. Incident cohorts of CML patients diagnosed in 2000 or later were included in survival-gain estimations associated with the introduction of first-line imatinib treatment. Restricting the data to SEER CML registrants for whom key demographic controls were reported generated a final analytical sample of 5,523 patients. Those in the CML subsample were demographically similar to patients from the full SEER CML sample, with the exception of 2 variables; namely, survival time (which was expected given the greater probability of survival among CML patients diagnosed at later dates) and Hispanic race (which likely resulted from a broader definition of “Hispanic” in more recently diagnosed patients).

Survival Gains: First- Line Therapy

Table 2 shows the results from the multivariate Cox proportional hazard analysis of survival impact following the 2001 introduction of first-line TKI therapy. The independent variable of interest is the post-TKI variable, which takes the value of 1 in 2001 and thereafter. The coefficient of this variable can be interpreted as the HR corresponding to the introduction of imatinib. Table 2 also depicts the most flexible form of the secular effects of time trend and time since diagnosis; year-of-diagnosis indicators and quadratic trend for month-of-diagnosis were included as controls for the secular trend in survival. As shown, the post-TKI variable was associated with an HR of 0.833 (P <.01). The implied TOT survival ratio of 1.307 can be interpreted as imatinib causing an immediate ~30% increase in the probability of CML survival at 90 months. This effect can be seen in the Figure, which shows the estimated pre-TKI and post-TKI survival curves for the treated patients. The survival ratio is equivalent to the vertical distance between curves at 90 months. Alternatively, the HR can be characterized by the median survival length (the life expectancy of a 50th percentile CML patient; ie, the horizontal distance between the curves). The HR of 0.833 corresponds to an estimated increase in median survival from 90 to 210 months.

As previously discussed, the effect of imatinib was estimated from the sustained shift in the survival curve that occurred in 2001, the year of the drug’s introduction. As a sensitivity analysis, we evaluated whether shifts were observable in the survival curve at other years, as a large, sustained shift in survival occurring in any other year might imply that the estimated survival effect at 2001 was driven by factors unrelated to imatinib. To evaluate this, the survival analysis was repeated using a post-year variable for each year between 1998 and 2005. Reported P values for each estimated HR of the post-year variable are available in Appendix B. The only statistically significant coefficient corresponded to the post-2001 (ie, post-TKI) variable.

Survival Gains: Second-Line Therapy

OS rates reported in first-line imatinib studies13,26 were averaged, with response rates weighted by study sample size. This was then compared with OS rates in second-line dasatinib therapy.20 As shown in Table 3, the relative effectiveness of dasatinib in second-line therapy, as compared with imatinib in first-line therapy, was 91%. Under the assumption that the differences in clinical versus community survival rates would be the same for dasatinib and imatinib, we applied this 91% to the survival rate ratio of imatinib estimated in the SEER-based proportional hazard analysis.

Value and Costs

Table 4a shows the cost of treatment, the value of survival gained through treatment, and the value of gains for patients treated with imatinib as a first-line response to CML. Estimated annual and lifetime costs are reported in the first line of Table 4a. The annual value of TKI-related survival gains (column 1) is equivalent to the increase in annual income necessary to make a CML patient indifferent to the pre- and post-treatment survival curves, which is also equivalent to the patient’s willingness to pay for treatment. Column 2 shows the present lifetime value of survival gains per individual treated with imatinib, column 3 illustrates the lifetime value of TKI treatment across all newly diagnosed US CML patients over a 1-year period, and column 4 shows the lifetime value of TKI treatment for all present and future US CM L patient cohorts. Note that the fraction of total value recouped by drug manufacturers is lower in column 4 than in columns 1 through 3. This reflects the assumption that the cost to future CML cohorts of treatment after patent expiration is negligible relative to prices under patent. Columns 1 to 4 in Table 4b show corresponding values for dasatinib in second-line therapy.

These results indicate that patients place an annual value of $110,600 on first-line TKI treatment relative to annual costs (under patent) of $30,500. This implies that, for all patients in present and future CML cohorts, the present social value of first-line TKI therapy is $88 billion. The present value of these costs, accounting for future patent expirations, was estimated to be $8.24 billion. Hence, approximately 91% of the social value of TKIs in first-line therapy is retained by patients, while 9% is recouped by drug companies. Likewise, dasatinib used as second-line CML therapy creates $55 billion in social value, of which patients retain roughly 90%, while 10% is recouped by drug companies.


This study evaluated the social value of CML survival gains achieved by treatment with TKIs. This analysis attributes the discrete 2001 HR drop in CML deaths observable in SEER data to the effect of imatinib treatment; this finding was robust to flexible controls for secular time trends in the survival analysis.

The study applied a novel model to assess the social benefit associated with improved CML patient longevity following the introduction of the TKI drug class. Based on this analysis, the TKI drug class in first- and second-line CML therapy has created over $143 billion in present discounted social value. Approximately 90% of this value will be derived from survival gains to be retained by patients and society, while ~10% will be recouped by drug companies. This proportional allocation corresponds with prior research using a similar model, which found that, between 1988 and 2006, 3% to 12% of the value of overall survival gains from cancer treatments was appropriated by drug companies.21 These estimates also suggest that, at current price levels, the vast majority of value created by TKI therapy in CML is appropriated as aggregate benefit to consumers; in other words, patients, not drug companies, are the primary beneficiaries of TKI therapy in CML.

An understanding of the social value of TKI treatment in CML has implications for therapeutic reimbursement and pricing, as well as for healthcare professionals’ awareness of how CML treatment costs contextualize to overall social benefit. Payers succeed in a competitive marketplace when they provide value to patients. From this perspective, the sizable lifetime value of TKI therapy to CML patients (relative to the cost of therapy) provides ample justification for facilitating patients’ access to TKI therapy. While the extant literature calls into question the cost-effectiveness of some seemingly expensive new cancer therapies, the results of this study (based upon comprehensive economic-impact evaluation) underscore the importance of taking into account the social value of such therapies and the attendant lifetime benefits accruable to patients (and not just the contemporaneous cost) in making payer and policy decisions. For instance, it is important to weigh the social value of therapies against costs in making assessments about the impact of managed care on the quality of healthcare delivery.

It is worth noting that the current study’s survival improvement estimates are somewhat smaller than those reported in clinical trials of TKIs. This study estimated a 90-month TOT survival rate of 65% after the introduction of imatinib, which is substantially lower than the 90-month survival rate reported in clinical trials.12,17,27 This may be due to inadequate dosing or poorer monitoring/adherence in community settings relative to clinical trial settings, particularly in the years immediately following the introduction of imatinib. These survival estimates suggest the potential value of addressing real-world obstacles to TKI efficacy, such as poor adherence.

In terms of study limitations, the value of survival gains and costs in second-line therapy identified by this study were confined to clinical trial and cost data for dasatinib, which was the first molecule to receive approval for a second-line CML indication. The additional benefit of a subsequently approved second-line TKI molecule (nilotinib) was not evaluated in this study. As a result, the current figures are conservative to the extent that they omit possible benefits that could accrue from having another second-line agent available. Moreover, the estimated value due to the availability of these second-generation TKI agents is conservative, because the empirical analysis did not capture the incremental benefits that these agents would provide in first-line use. Both dasatinib and nilotinib have demonstrated superiority to imatinib in first-line clinical trials, and received FDA approval for this use in 2010.14-16,28

In addition, the current study’s estimate of value is derived solely from survival gains. To the extent that treatment leads to other benefits, such as reduced caregiver burden or reductions in medical expenditures due to improved health, the fraction of total value retained by patients and society is likely to be underestimated.

Author affiliations: Leonard D. Schaeffer Center for Health Policy and Economics, School of Pharmacy, and Sol Price School of Public Policy, University of Southern California, Los Angeles, CA (DNL); Bristol-Myers Squibb, Plainsboro, NJ (JRM, JRP); Harris Graduate School of Public Policy, University of Chicago, Chicago, IL (TP); Department of Economics, Boston University, Boston, MA (WY).

Funding source: This supplement was supported by Bristol-Myers Squibb. Author disclosures: Dr Maclean and Dr Penrod report employment with and stock ownership in Bristol-Myers Squibb. Dr Lakdawalla and Dr Philipson report consultancy with Bristol-Myers Squibb and partnership in Precision Health Economics. Dr Yin reports consultancy with Precision Health Economics.

Authorship information: Concept and design (DNL, JRM, JRP, TP, WY); acquisition of data (DNL, TP); analysis and interpretation of data (DNL, JRM, JRP, TP, WY); drafting of the manuscript (DNL, JRM, JRP, TP, WY); critical revision of the manuscript for important intellectual content (DNL, JRM, JRP, TP, WY); statistical analysis (WY); obtaining funding (JRM, JRP); and supervision (JRM, WY).

Address correspondence to: Darius N. Lakdawalla, PhD, Leonard D. Schaeffer Center for Health Policy and Economics, University of Southern California, 3335 S Figueroa St, Unit A, Los Angeles, CA 90089-7273. E-mail:
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