In this section, we used ipilimumab for first-line treatment of metastatic melanoma as an example to illustrate the estimation of ROV using minimal modeling and reporting [24]. We previously estimated the ROV of ipilimumab in an augmented CEA model that incorporated the arrival of future innovation [5]. Here, we use minimal modeling instead of building a formal CEA model, as well as improved the estimation of some parameters. Ipilimumab was first approved to treat non-resectable or metastatic melanoma in 2011. Efficacy of ipilimumab in previously untreated patients was demonstrated in a phase III trial that randomized 502 patients to ipilimumab plus dacarbazine or dacarbazine plus placebo [24]. The trial showed that patients in the ipilimumab arm had significantly longer overall survival and progression-free survival compared with those in the placebo arm [24]. We conducted this analysis as if it were performed at launch in 2011 to capture the ex ante ROV of ipilimumab at the time of launch by using information that was available by 2011.

In this case, ipilimumab may create ROV through both prolonging survival and delaying disease progression (Table 2, section 1).

Table 3 summarizes the four investigational new drugs in phase III testing in 2011 for advanced or metastatic melanoma that could have potentially been the next line of treatment after first-line ipilimumab or placebo. These four products were identified from a search on ClinicalTrials.gov for investigational new drugs under clinical development for metastatic melanoma by March 2011 [25]. We ignored products that were in phase II testing at the time as their chances of obtaining approval were much lower than those in phase III. For the four investigational new drugs, we extracted information on their efficacy from their phase II studies, their phase II study design, and start date of phase III (Table 2).

To estimate the probability of FDA approval, we used estimates from DiMasi et al., that investigational cancer drugs that had a response rate of ≤ 13.8% in phase II had a 2.5% probability of being approved, while those that had a response rate of >13.8% in phase II had a 77% probability of being approved [17]. Therefore, GSK1120212, T-VEC, and GSK2118436 each had a 77% chance of being approved, while Allovectin-7 had a 2.5% chance of approval.

To estimate the expected time of FDA approval, we added the mean length of phase III trials, i.e. 31 months, and the mean FDA review time for antineoplastic products, i.e. 10 months, to the phase III start date of each of the investigational new treatments [26, 27]. The projected FDA approval dates for GSK1120212, T-VEC, GSK2118436, and Allovectin-7, if approved, were April 2014, September 2012, March 2014, and March 2010, respectively (Fig. 1).

Timelines for phase III testing and US FDA approval for investigational new drugs. mo months

After reviewing the probability and the expected time of approval of each of the four investigational products, we decided to exclude Allovectin-7, as the likelihood of approval was extremely low, and it would have been approved before ipilimumab if it had demonstrated significant efficacy. The probability of any approval \(p\) among GSK1120212, T-VEC, and GSK2118436 is then \(1-^=98.8\%\). The expected time of approval, if any approval, is the average among the three products, which is September 2013. Time to approval \(_\) is 30 months, which is the difference between September 2013 and March 2011.

Using OS and PFS curves from ipilimumab’s phase III study [24], at 30 months after the start of the first-line treatment, 7.5% of ipilimumab patients and 2.5% of control patients remained progression-free (difference: 5 percentage points) and 17.5% of ipilimumab patients and 12.5% of control patients were alive but had disease progression (difference: 5 percentage points). Based on these data, we estimated that an additional 5–10 percentage points of patients would survive and be eligible for future innovation on ipilimumab versus control. Moreover, two of the three investigational new drugs are indicated for BRAF mutation-positive patients, which account for approximately 50% of all melanoma cases. Therefore, we multiplied a factor of (0.5+0.5+1)/3=0.67 to the range of 5–10 percentage points.

Finally, the OS estimates of GSK1120212, T-VEC, and GSK2118436 from phase II were 14.2 months, 15.9 months, and 13.0 months, respectively, with an average of 14.5 months [27,28,29]. In the phase III study of ipilimumab, the median OS for patients who progressed on their first-line treatment was approximately 8 months [24]; therefore, if any of the three above-mentioned investigational new drugs was approved, patients who did not respond to their first-line treatment may be able to take advantage of this new medicine and live approximately 14.5 months instead of 8 months. In its phase III study, ipilimumab and control had the same median PFS (3 months) [24]. We made another simplifying and conservative assumption that the future innovation also does not improve median PFS. Therefore, all of the projected survival gain was from a longer time in the PD state. The utility weight for PD for metastatic melanoma was assumed to be 0.52 [30]. Using the minimal modeling approach, the incremental QALYs of future innovation versus control (assuming an exponential survival function) was therefore:

$$\Delta QALY_ = 0.52 \times \frac \right)}} = 4.9.$$

Multiplying \(\Delta _\) with the difference in the proportion of patients who survived and were eligible, as well as the likelihood of approval, the ROV of ipilimumab enabling patients to benefit from future innovation in this case was approximately 0.16–0.32 QALYs (Table 2, section 2). We calculated ROV as a percentage of the conventional value by approximating \(\frac_}_}\):

$$\frac }} }} = \frac \times \left( - med_ } \right)}} \times \left( - med_ } \right)}} \approx \frac - med_ }} - med_ }} = \frac} = 3.1.$$

In the ipilimumab trial, median OS for first-line ipilimumab was 11.2 months and 9.1 months for control [24]. Multiplying \(\frac_}_}\) with the difference in the proportion of patients who survived and were eligible, as well as the likelihood of approval, the ROV of ipilimumab as a percentage of ipilimumab’s conventional value was 10–20% (Table 2, section 2). This method assumes that survival curves of first-line ipilimumab and control both follow the exponential distribution.

In this empirical analysis, cancer-specific estimates were used to estimate the probabilities of arrival, while industry-wide estimates were used to estimate the expected times of arrival (Table 2, section 3). The phase II studies of investigational new drugs included in this study all reported median OS and were all single-arm trials (Table 2, section 3).

In this case, ROV is likely to interact with the value of hope and insurance value, while unlikely to influence the conventional value through adherence or to interact with productivity effects (Table 2, section 4). Prior research in metastatic melanoma suggested that patients were risk-loving and placed a high value on large health gain at the tail of the curve [19]. ROV can further extend the tail of the curve, as large health gain on ipilimumab enables patients to benefit from future innovations, leading to additional health gain and even higher valuation. For risk-averse healthy individuals, ROV of ipilimumab can further reduce health loss if individuals develop metastatic melanoma in the future, thereby creating greater insurance value. Since both ipilimumab and chemotherapy are administered intravenously in the physician’s office and there are well-established criteria for stopping treatment (e.g., disease progression, intolerable adverse effects, etc.), adherence is unlikely influenced by potential access to future innovation. Finally, the majority of metastatic melanoma patients at the time had a remaining life expectancy of only a few months. Therefore, it is unlikely that any treatment would have much effect on productivity, or that ROV would interact with productivity effects.

The ICER for first-line ipilimumab without ROV was $229,175 per QALY [5]. To bring the current first-line ICER down to $150,000 per QALY, the future innovation would need to be net cost-saving. Therefore, it is unlikely that including future innovation will change the conclusion of the cost effectiveness of ipilimumab (Table 2, section 5). Note however that this is from a conventional healthcare perspective that does not consider eventual genericization over the product life cycle [31].