INCORPORATING REAL OPTION VALUE IN THE ECONOMIC EVALUATION OF OSIMERTINIB FOR ADVANCED EGFR-MUTATED NON-SMALL CELL LUNG CANCER
Author(s)
Kwame Adjei, PharmD1, Karam Diaby, PhD2, Meng Li, PhD3, Fatimah Sherbeny, PhD1, Sandra Suther, PhD1, Askal Ayalew Ali, PhD1;
1Florida A&M University, Tallahassee, FL, USA, 2Otsuka, Princeton, NJ, USA, 3Tufts Medical Center, The Center for the Evaluation of Value and Risk in Health, Boston, MA, USA
1Florida A&M University, Tallahassee, FL, USA, 2Otsuka, Princeton, NJ, USA, 3Tufts Medical Center, The Center for the Evaluation of Value and Risk in Health, Boston, MA, USA
OBJECTIVES: Real Option Value (ROV), which captures survival benefits that enable patients to access future innovations, is rarely incorporated into health technology assessments of oncology therapies. This study assessed the impact of ROV on the economic value of first-line osimertinib compared with first-generation EGFR-tyrosine kinase inhibitors in advanced EGFR-mutated non-small cell lung cancer (NSCLC) in the United States.
METHODS: Two cost-effectiveness models were constructed: a conventional model and a ROV-adjusted model incorporating future survival gains. Both used a three-state Markov model (progression-free survival, progressed disease, and death). The ROV model applied a trend-based approach using SEER-Medicare data for NSCLC patients diagnosed between 2011 and 2017. Cox proportional hazards models estimated mortality trends over the first three years following diagnosis, which were extrapolated beyond 2017 and applied to transition probabilities from progressed disease to death. Analyses adopted a U.S. health system perspective, included direct medical costs adjusted to 2024 U.S. dollars, used one-month cycles and a lifetime horizon, and applied a 3% annual discount rate.
RESULTS: In the trend-based analysis, hazard ratios were 0.835 (95% CI: 0.827-0.843) for all-cause mortality, 0.832 (95% CI: 0.824-0.840) for lung cancer-specific mortality, and 0.870 (95% CI: 0.841-0.900) for other-cause mortality (all p<0.001). Compared with the conventional model, the ROV-adjusted model reduced the incremental cost of osimertinib versus first-generation EGFR-TKIs by 4.40% ($239,779.95 to $229,226.80). Incremental life years and quality-adjusted life years increased from 1.93 to 2.67 and from 1.52 to 2.05, respectively. Consequently, the ICER declined by 29.04%, from $157,761/QALY to $111,942/QALY.
CONCLUSIONS: Conventional cost-effectiveness analyses, even with lifetime horizons, implicitly assume a static treatment landscape and therefore fail to account for the value of future therapeutic innovation enabled by extended survival. Incorporating ROV addresses this limitation and meaningfully improves the assessed value of osimertinib, supporting a more comprehensive framework for evaluating innovative oncology therapies.
METHODS: Two cost-effectiveness models were constructed: a conventional model and a ROV-adjusted model incorporating future survival gains. Both used a three-state Markov model (progression-free survival, progressed disease, and death). The ROV model applied a trend-based approach using SEER-Medicare data for NSCLC patients diagnosed between 2011 and 2017. Cox proportional hazards models estimated mortality trends over the first three years following diagnosis, which were extrapolated beyond 2017 and applied to transition probabilities from progressed disease to death. Analyses adopted a U.S. health system perspective, included direct medical costs adjusted to 2024 U.S. dollars, used one-month cycles and a lifetime horizon, and applied a 3% annual discount rate.
RESULTS: In the trend-based analysis, hazard ratios were 0.835 (95% CI: 0.827-0.843) for all-cause mortality, 0.832 (95% CI: 0.824-0.840) for lung cancer-specific mortality, and 0.870 (95% CI: 0.841-0.900) for other-cause mortality (all p<0.001). Compared with the conventional model, the ROV-adjusted model reduced the incremental cost of osimertinib versus first-generation EGFR-TKIs by 4.40% ($239,779.95 to $229,226.80). Incremental life years and quality-adjusted life years increased from 1.93 to 2.67 and from 1.52 to 2.05, respectively. Consequently, the ICER declined by 29.04%, from $157,761/QALY to $111,942/QALY.
CONCLUSIONS: Conventional cost-effectiveness analyses, even with lifetime horizons, implicitly assume a static treatment landscape and therefore fail to account for the value of future therapeutic innovation enabled by extended survival. Incorporating ROV addresses this limitation and meaningfully improves the assessed value of osimertinib, supporting a more comprehensive framework for evaluating innovative oncology therapies.
Conference/Value in Health Info
2026-05, ISPOR 2026, Philadelphia, PA, USA
Value in Health, Volume 29, Issue S6
Code
EE260
Topic
Economic Evaluation
Topic Subcategory
Novel & Social Elements of Value
Disease
No Additional Disease & Conditions/Specialized Treatment Areas, SDC: Oncology