When to wait for more evidence? Real options analysis in proton therapy

Abstract

Purpose: Trends suggest that cancer spending growth will accelerate. One method for controlling costs is to examine whether the benefits of new technologies are worth the extra costs. However, especially new and emerging technologies are often more costly, while limited clinical evidence of superiority is available. In that situation it is often unclear whether to adopt the new technology now, with the risk of investing in a suboptimal therapy, or to wait for more evidence, with the risk of withholding patients their optimal treatment. This trade-off is especially difficult when it is costly to reverse the decision to adopt a technology, as is the case for proton therapy. Real options analysis, a technique originating from financial economics, assists in making this trade-off.

Methods: We examined whether to adopt proton therapy, as compared to stereotactic body radiotherapy, in the treatment of inoperable stage I non-small cell lung cancer. Three options are available: adopt without further research; adopt and undertake a trial; or delay adoption and undertake a trial. The decision depends on the expected net gain of each option, calculated by subtracting its total costs from its expected benefits.

Results: In The Netherlands, adopt and trial was found to be the preferred option, with an optimal sample size of 200 patients. Increase of treatment costs abroad and costs of reversal altered the preferred option.

Conclusion: We have shown that real options analysis provides a transparent method of weighing the costs and benefits of adopting and/or further researching new and expensive technologies.

Figure 1.

Schematic diagram of the decision to adopt now or wait for more evidence.

Figure 2.

Expected net gain (ENG) for the options to delay and trial (ENG_DT) and adopt and trial (ENG_AT) for different sample sizes. The gray dotted line marks the optimal sample size (highest expected net gain). Abbreviations: ENG, expected net gain; ENG_DT, ENG for the options to delay and trial; ENG_AT, ENG for the options to adopt and trial.

Figure 3.

Results of the sensitivity analysis without (A) and duplicating (B) costs of treatment abroad: expected net gain (ENG) for both the option to adopt and trial (ENG_AT) and the option to delay and trial (ENG_DT) for different sample sizes. The gray dotted line marks the optimal sample size (highest expected net gain). Abbreviations: ENG, expected net gain; ENG_DT, ENG for the options to delay and trial; ENG_AT, ENG for the options to adopt and trial.

Figure 4.

Results of the sensitivity analysis without (A) and duplicating (B) reversal costs: expected net gain (ENG) for both the option to adopt and trial (ENG_AT) and the option to delay and trial (ENG_DT) for different sample sizes. The gray dotted line marks the optimal sample size (highest expected net gain). Abbreviations: ENG, expected net gain; ENG_DT, ENG for the options to delay and trial; ENG_AT, ENG for the options to adopt and trial.