Effect of clinical outcome-driven reimburesement on cost savings and innovation in multiple myeloma.

e18344 Background: The cost of cancer care is dissociated from the individual patient’s clinical outcome. A cancer patient treated with a particular drug incurs a fixed expense that is independent of her clinical response. Manufacturers thus have little incentive to design medications more effective than the minimum required for FDA approval. Methods: We propose a model whereby drug manufacturers are rewarded for sustained patient responses. Clinical information flowing to insurance companies dictates patients’ co-payment rates. “Integrated” PFS (iPFS) is defined as the mean of the median PFS of all medications approved for an indication. Patients with objective evidence of disease progression before reaching a given iPFS endure no out-of-pocket expenditure and insurance company deducts a certain percentage from launch price. Patients with durable responses longer than a chosen iPFS threshold pay 20% while the insurance company pays 80% of launch price. For each patient still responding at a specific (high) iPFS, drug company earns extra percentage of launch price via the insurance company (same fraction saved from cases of failure to respond). PFS Kaplan-Meier curves of five common drugs in mm were assessed. Model's impact was calculated. Results: The calculated iPFS was 17 months. iPFS thresholds chosen were 0.7 and 1.2, equaling 11.9 and 20.4 months. For each patient progressing before 11.9 months, the manufacturer were to (randomly) lose 19% of launch price. For each patient with no progression at 20.4 months, it was calculated that manufacturers should earn extra 15% of launch price to achieve overall financial neutrality. Patients had no out-of-pocket expenditure if they had progression earlier than 0.35 iPFS. Approximately 70k patients experienced early progression and were spared cost, with savings amounting 5 m dollars. Amgen and Bristol-Myers generated extra annual revenues amounting 18.4 and 10.6 m dollars for carfilzomib and elotuzumab. Celegne and Takeda experienced annual deductions of 9.9 and 25.9 m dollars for lenalidomide and bortezomib. Conclusions: Our model would spur scientific innovation while generating economic savings for mm patients.