Productivity of Medical Innovation: Real-world evidence on the Impact of Immune Checkpoint Inhibitors

• In Event: Innovation, Incentives, and Inefficiencies in Pharmaceutical Markets

Abstract

Immunotherapy is widely recognized as a breakthrough innovation in oncology care. It has also become one of the most expensive pharmaceutical treatments for cancer, with treatment costs often exceeding $120,000 per patient. In this paper, we study the introduction of immune checkpoint inhibitors (ICIs), the most significant and widespread classes of immunotherapy drugs, for the treatment of metastatic melanoma. While cancer mortality rates have been declining since the 1990s, melanoma mortality rates were stagnant until about 2015. In 2011 and 2014, three different ICIs were approved for use in patients with metastatic melanoma. Using traditional Medicare fee-for-service claims data and colorectal cancer as a control condition, we provide empirical evidence of the impact of the introduction of ICIs on care utilization, treatment costs, and 1-year survival. Our results demonstrate that the introduction of ICIs significantly improved survival while also offsetting the use of traditional cancer treatments, chemotherapy and radiation. Despite this substitution, total health care spending increased, driven by ICI claims in the outpatient setting. Importantly, improvements in survival only manifested after the introduction of the second set of ICIs when use was more widespread, though lower than we would expect given demonstrated benefits and the lack of efficacy in existing treatments for patients with metastatic melanoma. 

 

Authors

• Danea M Horn
  Non-Presenting Co-Author

• Mireille Jacobson, University of Southern California
  Presenting Author

• Abby Alpert
  Non-Presenting Co-Author