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Do cancer treatments have option value? Real‐world evidence from metastatic melanoma

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  • Meng Li
  • Anirban Basu
  • Caroline S. Bennette
  • David L. Veenstra
  • Louis P. Garrison

Abstract

A change in the expectations about future treatments may change the option value of a current treatment, thereby affecting its utilization. We conducted an interrupted time series analysis using a large administrative claims database to test whether the utilization of existing cancer treatments changed after the disclosures of the then‐investigational drug ipilimumab's Phase II and Phase III results among metastatic melanoma patients from 2008 to 2011. We used a multinomial logistic regression to analyze the temporal probability of receiving antineoplastic systemic therapy, surgical resection of metastasis, or both, relative to no treatment, in the first 3 months following the first metastasis diagnosis. One thousand eight hundred forty‐six metastatic melanoma patients were included. After adjusting for clinical and sociodemographic variables and the underlying time trend, the disclosure of ipilimumab's Phase II result was associated with a nearly twofold immediate increase in the probability of receiving surgical resection of metastasis relative to no treatment, which was significant at 5% level. No significant effect was observed for the time trend. No significant effects were found for the announcement of the Phase III result. Our findings in metastatic melanoma provide the first empirical evidence of the impact of option value in cancer treatment decision making.

Suggested Citation

  • Meng Li & Anirban Basu & Caroline S. Bennette & David L. Veenstra & Louis P. Garrison, 2019. "Do cancer treatments have option value? Real‐world evidence from metastatic melanoma," Health Economics, John Wiley & Sons, Ltd., vol. 28(7), pages 855-867, July.
  • Handle: RePEc:wly:hlthec:v:28:y:2019:i:7:p:855-867
    DOI: 10.1002/hec.3899
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    References listed on IDEAS

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    1. Linda Ryen & Mikael Svensson, 2015. "The Willingness to Pay for a Quality Adjusted Life Year: A Review of the Empirical Literature," Health Economics, John Wiley & Sons, Ltd., vol. 24(10), pages 1289-1301, October.
    2. John P. A. Ioannidis & T. D. Stanley & Hristos Doucouliagos, 2017. "The Power of Bias in Economics Research," Economic Journal, Royal Economic Society, vol. 127(605), pages 236-265, October.
    3. Thornton Snider Julia & Seabury Seth & Tebeka Mahlet Gizaw & Wu Yanyu & Batt Katharine, 2018. "The Option Value of Innovative Treatments for Metastatic Melanoma," Forum for Health Economics & Policy, De Gruyter, vol. 21(1), pages 1-10, June.
    4. Hausman, Jerry & McFadden, Daniel, 1984. "Specification Tests for the Multinomial Logit Model," Econometrica, Econometric Society, vol. 52(5), pages 1219-1240, September.
    5. Tomas J. Philipson & Gary Becker & Dana Goldman & Kevin M. Murphy, 2010. "Terminal Care and The Value of Life Near Its End," NBER Working Papers 15649, National Bureau of Economic Research, Inc.
    6. Gary Becker & Kevin Murphy & Tomas Philipson, 2007. "The Value of Life Near its End and Terminal Care," Levine's Working Paper Archive 122247000000001428, David K. Levine.
    7. Lenos Trigeorgis, 1993. "Real Options and Interactions With Financial Flexibility," Financial Management, Financial Management Association, vol. 22(3), Fall.
    8. Tomas J. Philipson & Gary Becker & Dana Goldman & Kevin M. Murphy, 2010. "Terminal Care and The Value of Life Near Its End," NBER Working Papers 15649, National Bureau of Economic Research, Inc.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Jason Shafrin’s journal round-up for 15th July 2019
      by Jason Shafrin in The Academic Health Economists' Blog on 2019-07-15 11:00:05
    2. Academic Health Economists’ Blog Journal Round-Up
      by Jason Shafrin in Healthcare Economist on 2019-07-15 16:38:21

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