The option value of innovative treatments in the context of chronic myeloid leukemia.

OBJECTIVE: To quantify in the context of chronic myeloid leukemia (CML) the additional value patients receive when innovative treatments enable them to survive until the advent of even more effective future treatments (ie, the "option value"). STUDY DESIGN: Observational study using data from the Surveillance, Epidemiology and End Results (SEER) cancer registry comprising all US patients with CML diagnosed between 2000 and 2008 (N = 9,760). METHODS: We quantified the option value of recent breakthroughs in CML treatment by first conducting retrospective survival analyses on SEER data to assess the effectiveness of TKI treatments, and then forecasting survival from CML and other causes to measure expected future medical progress. We then developed an analytical framework to calculate option value of innovative CML therapies, and used an economic model to value these gains. We calculated the option value created both by future innovations in CML treatment and by medical progress in reducing background mortality. RESULTS: For a recently diagnosed CML patient, the option value of innovative therapies from future medical innovation amounts to 0.76 life-years. This option value is worth $63,000, equivalent to 9% of the average survival gains from existing treatments. Future innovations in CML treatment jointly account for 96% of this benefit. CONCLUSIONS: The option value of innovative treatments has significance in the context of CML and, more broadly, in disease areas with rapid innovation. Incorporating option value into traditional valuations of medical innovations is both a feasible and a necessary practice in health technology assessment.