The impact of pharmaceutical innovation on the longevity and hospitalization of New Zealand cancer patients, 1998–2017

ABSTRACT

Background

We investigate whether the cancer sites that experienced more pharmaceutical innovation in New Zealand had larger subsequent declines in premature mortality and hospitalization rates and larger subsequent increases in 5-year survival rates, controlling for changes in incidence. 

Research design and methods

We estimate the effects of the number of WHO ATC5 chemical substances and ATC4 chemical subgroups approved on the number of years of potential life lost before ages 85, 75, 65, 5-year relative survival rates, and the number of inpatient hospital discharges, by estimating difference-in-differences (2-way fixed-effects) models using aggregate longitudinal data on 23 cancer sites.

Results

Substances/subgroups approved during 1985-2001 reduced the number of years of potential life lost before age 85 (YPLL85) in 2017 by 67%. Those substances/subgroups reduced YPLL75 and YPLL65 in 2017 by similar percentages. The odds of surviving at least 5 years after diagnosis are significantly positively related to the number of substances previously approved.

Conclusions

The cost per life-year before age 85 gained in 2017 from previous drug approvals did not exceed 1719 USD. The WHO considers interventions whose cost per quality-adjusted life-year gained is less than per capita GDP to be highly cost-effective; New Zealand’s per capita GDP in 2017 was 42,260 USD. capita GDP in 2017 was 42,260 USD.

Expert Opinion

Pharmaceutical innovation—the introduction and use of new drugs—substantially increased cancer survival rates in New Zealand, and substantially reduced premature (before ages 85, 75, and 65) cancer mortality there during the period 1998–2017. Moreover, overall the new cancer drugs were highly costeffective. The drugs approved during 1985–2001 are estimated to have reduced the number of years of potential life lost before age 85 in 2017 by 244,876. Even if previous drug approvals increased the cost of hospital discharges and other medical costs, the cost per life-year before age 85 gained in 2017 from those approvals could not have exceeded 1719 USD.

KEYWORDS:

• Pharmaceutical
• innovation
• longevity
• hospitalization
• New Zealand
• cancer

Declaration of interest

The author has received research support from Asociación de Laboratorios Farmacéuticos de Investigación y Desarrollo, Cámara Argentina de Especialidades Medicinales, Incyte Corporation, Korean Research-based Pharmaceutical Industry Association, Laerdal, Medicines Australia, Merck/MSD, National Pharmaceutical Council, Novartis, Pfizer, Pharmaceutical Research and Manufacturers of America, PHRMAG (Pharmaceutical Research and Manufacturers Association Gulf), PReMA (Thailand Pharmaceutical Research and Manufacturers Association), and the U.S. Social Security Administration. The author has no other relevant affiliations or financial involvement with any organization or entity with a financial interest in or financial conflict with the subject matter or materials discussed in the manuscript apart from those disclosed.

Reviewers disclosure

A reviewer on this manuscript has disclosed being the Deputy Editor in Chief, Journal of Medical Economics; Quantitative Methods Editor, JAMA Dermatology; Equity in Matrix45, LLC, which provides consultation services to the life sciences industries, government agencies (US, EU, international), academic institutions, and professional and patient advocacy organizations. Peer reviewers on this manuscript have no other relevant financial relationships or otherwise to disclose.

Notes

1. Survival time for cancer patients is usually measured from the day the cancer is diagnosed until the day they die. Patients are often diagnosed after they have signs and symptoms of cancer. If a screening test leads to a diagnosis before a patient has any symptoms, the patient’s survival time is increased because the date of diagnosis is earlier. This increase in survival time makes it seem as though screened patients are living longer when that may not be happening. This is called lead-time bias. It could be that the only reason the survival time appears to be longer is that the date of diagnosis is earlier for the screened patients. But the screened patients may die at the same time they would have without the screening test [34].

2. SURV5%_s,t = the fraction of people diagnosed with cancer at site s in year t who were alive 5 years after diagnosis. The survival estimates are relative survival ratios. Relative survival is the observed survival in the cancer patient group divided by the expected survival of a matched group in the general population. Relative survival is cancer survival in the absence of other causes of death. It represents the proportion of patients within a particular group alive after a certain number of years of follow-up, most commonly five years, and attributes all the ‘excess’ mortality of the group to the cancer in question. For example, a relative survival of 75% means that the cancer reduces the likelihood of surviving five years after diagnosis by 25%. A relative survival of 100% indicates that cancer patients experience mortality rates equivalent to those in a comparable group from the general population. If a relative survival rate exceeds 100%, this indicates that cancer patients have better observed survival than is expected for people in the general population.

3. The vast majority (94%) of hospital discharges are publicly funded. In 2012–2013, there were 1.1 million publicly-funded discharges, and only 70 thousand privately-funded discharges.

4. In contrast, the age-adjusted mortality rate gives equal weight to reductions in mortality at different ages, e.g. reductions in the mortality rates of 85-year-olds and 40-year olds.

5. For example, the five levels associated with the chemical subgroup ‘nitrogen mustard analogues’ are:L ANTINEOPLASTIC AND IMMUNOMODULATING AGENTSL01 ANTINEOPLASTIC AGENTSL01AALKYLATING AGENTSL01AANitrogen mustard analoguesL01AA01cyclophosphamideL01AA02 chlorambucilL01AA03melphalanL01AA05chlormethineL01AA06ifosfamideL01AA07trofosfamideL01AA08prednimustineL01AA09bendamustine.

6. Some trends may have increased premature mortality. Between 1997 and 2014, the fraction of the New Zealand population that was obese increased from 18.8% to 29.9% [2].

7. N_CASES_s,t = the number of patients diagnosed with cancer at site s in year t.

8. mean(ΔCUM_DRUGS_k) is equal to the estimate of ρ₂₀₁₇ from the equation CUM_DRUGS_s,t-k = ϕ_s + ρ_t + ε_st. where ρ₂₀₀₀ is normalized to zero.

9. According to the Merriam-Webster dictionary, one definition of vintage is ‘a period of origin or manufacture (e.g. a piano of 1845 vintage)’. Robert Solow [35] introduced the concept of vintage into economic analysis. Solow’s basic idea was that technical progress is ‘built into’ machines and other goods and that this must be taken into account when making empirical measurements of their roles in production. This was one of the contributions to the theory of economic growth that the Royal Swedish Academy of Sciences cited when it awarded Solow the 1987 Alfred Nobel Memorial Prize in Economic Sciences [36].

10. Outpatient prescription drug claims usually don’t show the indication of the drug prescribed. Claims for drugs administered by doctors and nurses (e.g. chemotherapy) often show the indication of the drug, but these account for just 15% of drug expenditure. These data are not available for New Zealand.

11. A separate model is estimated for each value of k, rather than including multiple values (CUM_DRUGS_s,t, CUM_DRUGS_s,t-2, CUM_DRUGS_s,t-4, …) in a single model because CUM_DRUGS is highly serially correlated (by construction), which would result in extremely high multicollinearity if multiple values were included.)

12. The number of standard ‘dose’ units sold is determined by taking the number of counting units sold divided by the standard unit factor which is the smallest common dose of a product form as defined by IQVIA. For example, for oral solid forms, the standard unit factor is one tablet or capsule whereas for syrup forms the standard unit factor is one teaspoon (5 ml) and injectable forms it is one ampoule or vial. Other measures of quantity, such as the number of patients using the drug, prescriptions for the drug, or defined daily doses of the drug, are not available.

13. Mortality data are reported in 5-year age groups. We assume that deaths in a 5-year age group occur at the midpoint of the age group. For example, we assume that deaths at age 35–39 years occurred at age 37.5. The Association of Public Health Epidemiologists in Ontario [37] uses this method. These approximations result in some imprecision in the mortality estimates, but should not cause any bias in the parameter estimates.

14. The coefficient on the incidence measure (γ) was insignificant in all the 5-year survival odds models.

15. If the number of drugs approved during 1985–2001 had been 50% lower, rather than 100% lower, YPLL85 would have been 74% higher than it actually was in 2017; YPLL85 would have been 210,890. According to our model, pharmaceutical innovation is subject to diminishing marginal productivity: eliminating all innovation would have reduced YPLL85 more than twice as much as a 50% reduction in innovation.

16. Lichtenberg [38] demonstrated that the number of QALYs gained from pharmaceutical innovation could be either greater than or less than the number of life-years gained.

17. Table 3 shows estimates of the effects of drug approvals on U.S. premature (before age 75) cancer mortality.

Additional information

Funding

Medicines New Zealand Inc. provided the author(s) with a research grant to perform the study. The author bears complete responsibility for the design and execution of the study.