Does Cost-Effectiveness Analysis Overvalue Potential Cures? Exploring Alternative Methods for Applying a "Shared Savings" Approach to Cost Offsets.

OBJECTIVES: To evaluate alternative methods to calculate and/or attribute economic surplus in the cost-effectiveness analysis of single or short-term therapies. METHODS: We performed a systematic literature review of articles describing alternative methods for cost-effectiveness analysis of potentially curative therapies whose assessment using traditional methods may suggest unaffordable valuations owing to the magnitude of estimated long-term quality-adjusted life-year (QALY) gains or cost offsets. Through internal deliberation and discussion with staff at the Health Technology Assessment bodies in England and Canada, we developed the following 3 alternative methods for further evaluation: (1) capping annual costs in the comparator arm at $150 000 per year; (2) "sharing" the economic surplus with the health sector by apportioning only 50% of cost offsets or 50% of cost offsets and QALY gains to the value of the therapy; and (3) crediting the therapy with only 12 years of the average annual cost offsets or cost offsets and QALY gains over the lifetime horizon. The impact of each alternative method was evaluated by applying it in an economic model of 3 hypothetical condition-treatment scenarios meant to reflect a diversity of chronicity and background healthcare costs. RESULTS: The alternative with greatest impact on threshold price for the fatal pediatric condition spinal muscular atrophy type 1 was the 12-year cutoff scenario. For a hypothetical one-time treatment for hemophilia A, capping cost offsets at $150 000 per year had the greatest impact. For chimeric antigen receptor T-cell treatment of non-Hodgkin's lymphoma, capping cost offsets or using 12-year threshold had little impact, whereas 50% sharing of surplus including QALY gains and cost offsets greatly reduced threshold pricing. CONCLUSIONS: Health Technology Assessment bodies and policy makers will wrestle with how to evaluate single or short-term potentially curative therapies and establish pricing and payment mechanisms to ensure sustainability. Scenario analyses using alternative methods for calculating and apportioning economic surplus can provide starkly different assessment results. These methods may stimulate important societal dialogue on fair pricing for these novel treatments.

Assessing the Value of Sarilumab Monotherapy for Adults with Moderately to Severely Active Rheumatoid Arthritis: A Cost-Effectiveness Analysis.

BACKGROUND: Rheumatoid arthritis is associated with a societal burden greater than $39 billion annually. Novel treatments, known as targeted immune modulators (TIMs), are expensive but effective, producing improvements in response rates compared with conventional disease-modifying antirheumatic drugs (cDMARDs). Sarilumab, a TIM approved in 2017, shows superior improvements compared with cDMARDs and produced significantly greater likelihood of achieving response and improvement in the Health Assessment Questionnaire Disability Index than adalimumab monotherapy. Although sarilumab monotherapy has shown improvements over cDMARDs and the TIM market leader adalimumab, treatment with sarilumab is costly, with an annual wholesale acquisition cost of $39,000. OBJECTIVE: To estimate the lifetime cost-effectiveness of starting treatment with sarilumab monotherapy for adult patients with moderately to severely active rheumatoid arthritis who have had an inadequate response to cDMARDs. METHODS: A sequential treatment cohort model followed a hypothetical cohort from initiation of sarilumab monotherapy until death. The model allowed patients to switch therapies up to 3 times due to effectiveness or adverse events. The first switch was to a TIM within the same treatment category; the second switch was to a TIM within a different treatment category; and the third switch was to a cDMARD. Sarilumab monotherapy was compared with a cDMARD (methotrexate) and the TIM market leader (adalimumab monotherapy). Key risk and benefit evidence came from clinical studies and network meta-analyses of data on radiographic progression and response. We used a lifetime time horizon and the U.S. health sector payer perspective assuming therapy net pricing. We also incorporated loss of productivity to reflect a restricted societal perspective. RESULTS: Over a lifetime time horizon, a treatment pathway starting with sarilumab resulted in 17.16 life-years and 13.66 quality-adjusted life-years (QALYs). Treatment pathways starting with the cDMARD resulted in 16.54 life-years and 11.77 QALYs; treatment pathways starting with adalimumab resulted in 17.05 life-years and 13.35 QALYs. Total costs for sarilumab ($492,000 for payer perspective, $634,000 for societal perspective) were less than total costs for adalimumab ($536,000 for payer perspective, $689,000 for societal perspective) but higher than total costs for the cDMARD ($63,000 for payer perspective, $272,000 for societal perspective). When compared with cDMARD therapy, sarilumab resulted in a cost-effectiveness estimate of $227,000 per QALY gained from the payer perspective and $191,000 per QALYs gained from the societal perspective. When compared with adalimumab, sarilumab was dominant from both perspectives. CONCLUSIONS: Sarilumab resulted in better health outcomes than conventional therapy alone. However, its additional cost with assumed class-level net prices led to cost-effectiveness estimates above commonly cited thresholds. When compared with the market leader, sarilumab achieved favorable value. This evaluation informs stakeholders of the value of sarilumab and its alternatives to promote high value practices in health care. DISCLOSURES: Funding for this research was contributed by the Institute for Clinical and Economic Review (ICER). Ollendorf, Chapman, Kumar, Synnott, and Agboola are employees of ICER, an independent organization that evaluates the evidence on the value of health care interventions, which is funded by grants from the Laura and John Arnold Foundation, Blue Shield of California Foundation, and the California HealthCare Foundation. The organization's annual policy summit is supported by dues from Aetna, AHIP, Anthem, Blue Shield of California, CVS Caremark, Express Scripts, Harvard Pilgrim Health Care, Omeda Rx, United Healthcare, Kaiser Permanente, Premera Blue Cross, AstraZeneca, Genentech, GlaxoSmithKline, Johnson & Johnson, Merck, National Pharmaceutical Council, Takeda, Pfizer, Novartis, Lilly, and Humana. This work is an extension of an analysis presented at the New England Comparative Effectiveness Public Advisory Council on March 24, 2017, where the authors received public feedback on the analysis, results, and effect of a value assessment for targeted immune modulators. At the time of presentation, sarilumab was still an investigational product; therefore, a price was not known, so cost-effectiveness estimates were not generated. Since the presentation of that material, additional evidence for sarilumab has become available. The additional evidence has been incorporated into this analysis to present cost-effectiveness estimates for sarilumab.