The document discusses value-conscious biomedical innovation and evaluating medical technologies based on their costs and benefits. It provides examples of how insurers and Medicare make coverage decisions based on whether a technology is medically necessary and cost-effective. The document also analyzes studies on different treatment options for prostate cancer and potential cost savings if lower-cost options were used. It examines cost-effectiveness analyses of COX-2 inhibitors compared to NSAIDs under various assumptions and for high-risk patients. Moving to a cost-effectiveness criterion could shift both health care expenditures and outcomes.

1. Value-Conscious Biomedical Innovation Alan M. Garber Department of Veterans Affairs and Stanford University May 14, 2009

3. The paradox of biomedical innovation

5. How insurers make decisions about medical technologies

11. Erlotinib and gemcitabine in pancreatic cancer. Overall survival results.

12. We found that overall survival in patients with advanced pancreatic cancer was significantly improved with erlotinib and gemcitabine compared with placebo plus gemcitabine; the HR [hazard ratio] of 0.82 represents a 18% reduction in the risk of death, or alternately, an overall 22% improvement in survival. HR is the most appropriate measure of overall and progression-free survival in rapidly progressive diseases such as pancreatic cancer because it encompasses the whole observation period and not just a single point estimate, such as the median. The improvement in median overall survival with erlotinib and gemcitabine is modest (6.24 v 5.91 months) while the 1-year survival rate with erlotinib and gemcitabine is 23% versus 17% with placebo and gemcitabine. The improvement in progression-free survival with a HR of 0.77 supports the beneficial effects of erlotinib. This benefit was achieved without a difference in response rate between the arms.

16. Wilt, T. J. et. al. Ann Intern Med 2008;148:435-448 Complication rates for prostate cancer treatments from nonrandomized studies

18. Medical expenditures by treatment for 65 year-olds One-year expenditures, adjusted for comorbidities

20. Cost-effectiveness analysis

21. COX-2 Inhibitors vs NSAIDS Change in costs Gain in health benefit (QALYs) Comparator: Naproxen $12k $6k $0 Source: Spiegel et al., The Cost-Effectiveness of Cyclooxygenase-2 Selective Inhibitors in the Management of Chronic Arthritis, Ann Intern Med. 2003;138:795-806. 0 0.10 0.05 $ 100k per QALY

22. COX-2 Inhibitors vs NSAIDS Change in costs Gain in health benefit (QALYs) Comparator: Naproxen Assumption: Excludes effects on heart Change in cost: $11,600 Change in benefit: 0.04 QALYs Incremental CER: $290,000/QALY $12k $6k $0 Source: Spiegel et al., The Cost-Effectiveness of Cyclooxygenase-2 Selective Inhibitors in the Management of Chronic Arthritis, Ann Intern Med. 2003;138:795-806. $ 100k per QALY Basecase 0 0.10 0.05

23. COX-2 Inhibitors vs NSAIDS Change in costs Gain in health benefit (QALYs) Comparator: Naproxen Assumption: INCLUDES effects on heart Change in cost: $11,600 Change in benefit: 0.03 QALYs Incremental CER: $395,000/QALY $12k $6k $0 Source: Spiegel et al., The Cost-Effectiveness of Cyclooxygenase-2 Selective Inhibitors in the Management of Chronic Arthritis, Ann Intern Med. 2003;138:795-806. $ 100k per QALY Basecase w/ heart 0 0.10 0.05

24. COX-2 Inhibitors vs NSAIDS Change in costs Gain in health benefit (QALYs) Comparator: Naproxen Assumption: High-risk patients Change in cost: $4,720 Change in benefit: 0.08 QALYs Incremental CER: $56,000/QALY $12k $6k $0 Source: Spiegel et al., The Cost-Effectiveness of Cyclooxygenase-2 Selective Inhibitors in the Management of Chronic Arthritis, Ann Intern Med. 2003;138:795-806. $ 100k per QALY Basecase w/ heart High risk 0 0.10 0.05