Objectives: To develop a model of the option value a therapy provides by enabling patients to live to see subsequent innovations and to apply the model to the case of nivolumab in renal cell carcinoma (RCC) and non-small cell lung cancer (NSCLC).
Study design: A model of the option value of nivolumab in RCC and NSCLC was developed and estimated.
Methods: Data from the Surveillance, Epidemiology, and End Results (SEER) cancer registry and published clinical trial results were used to estimate survival curves for metastatic cancer patients with RCC, squamous NSCLC, or nonsquamous NSCLC. To estimate the conventional value of nivolumab, survival with the pre-nivolumab standard of care was compared with survival with nivolumab assuming no future innovation. To estimate the option value of nivolumab, long-term survival trends in RCC and squamous and nonsquamous NSCLC were measured in SEER to forecast mortality improvements that nivolumab patients may live to see.
Results: Compared with the previous standard of care, nivolumab extended life expectancy by 6.3 months in RCC, 7.5 months in squamous NSCLC, and 4.5 months in nonsquamous NSCLC, according to conventional methods. Accounting for expected future mortality trends, nivolumab patients are likely to gain an additional 1.2 months in RCC, 0.4 months in squamous NSCLC, and 0.5 months in nonsquamous NSCLC. These option values correspond to 18%, 5%, and 10% of the conventional value of nivolumab, respectively.
Conclusions: Option value is important when valuing therapies like nivolumab that extend life in a rapidly evolving area of care.