OBJECTIVES: Innovative pharmaceutical treatments contribute significant value for improving and extending the lives of cancer patients. Many innovative oncology products become standard of care and continue to produce significant value well beyond the period of innovator exclusivity. Current tools used to guide 3rd party funding decisions are made at the beginning of product lifecycles and fail to account for the long-term stream of value, particularly from acquisition cost reduction after innovator exclusivity. The objective of this study was to propose a framework to highlight this important aspect for determining the value of new drug innovation using two case studies. METHODS: The drugs selected for the cases studies were paclitaxel and azacitidine. Pharmacoeconomic studies evaluating these agents were identified. Applying off-patent prices after exclusivity, a lifecycle ICER was determined by annually amortizing the ICER value over the potential useful life of a product. Results are in Canadian dollars. RESULTS: Paclitaxel remains a standard of care in advanced ovarian and breast cancer even after innovator loss of exclusivity in 2004. Using the current off-patent price, the lifecycle ICER for paclitaxel is estimated to be approximately $26,000 per QALY. Azacitidine has become the standard of care for higher-risk MDS in Canada. It is anticipated that azacitidine will remain part of standard care beyond innovator exclusivity. Assuming a 25% reduction in acquisition cost and a further 10 year useful life, the lifecycle ICER for azacitidine is estimated to be approximately $36,000 per QALY. CONCLUSIONS: Many innovative oncology medicines provide significant societal value well past the period of innovator exclusivity. Current approaches for assessing economic value fail to recognize this unique aspect and may be undervaluing new oncology medicines. Therefore, approaches should evolve to better account for the societal value a product produces over its useful life span.
Kim, T., & Dranitsaris, G. (2012). PCN92 The Lifecycle Value of Oncology Medicines. Value in Health, 15(4), A224. https://doi.org/10.1016/j.jval.2012.03.1209