Dynamic cost-effectiveness of oncology drugs.

Objective: To develop a methodology for computing cost-effectiveness measures of a drug throughout its life cycle.
Study Design: We developed a set of models that measure the long-term cost-effectiveness of 2 oncology drugs, paclitaxel and docetaxel, throughout their life cycles.
Methods: The study combined pricing history of the drugs, US Food and Drug Administration approval dates, drug utilization from Medicare claims, and clinical effectiveness information from phase III studies reported in the scientific literature. These data were used to estimate the incremental cost-effectiveness ratio (ICER) at the time of market entry and by year thereafter. The study population included patients with cancer who were treated with paclitaxel or docetaxel.
Results: The prices of paclitaxel and docetaxel dropped substantially due to patent expirations, while the number of users increased several fold because of subsequent empirical evidence and approval of new indications that resulted in greater efficacy. The ICER over a 10-year period was approximately 60% of the ICER at product launch for both drugs, and was further decreased when a longer-term perspective was taken.
Conclusions: We demonstrated that the ICER of a drug can decrease substantially over its life cycle. Thus, cost-effectiveness at drug launch might be a poor indicator of the longterm value of the drug. The results of this study are based on the analysis of 2 prominent oncology drugs, paclitaxel and docetaxel. The results may not be generalizable to other drug classes or other oncology drugs for which new indications are less common.