A Pragmatic Guide to Assessing Real Option Value for Medical Technologies

Abstract

Objectives: This study aimed to provide recommendations for identifying and implementing real option value (ROV) calculations in value assessment.

Methods: We identified the primary mechanisms through which ROV can be created based on a theoretical framework for ROV, assessed approaches for predicting future innovations and improvements in health, and described the steps for estimating ROV in a cost-effectiveness analysis framework.

Results: The 3 primary mechanisms by which ROV can be created are when a current treatment (1) prolongs survival to increase the proportion of patients who can receive future innovations, (2) slows disease progression to increase patients' eligibility for future innovations, and (3) directly affects the efficacy of future innovations. We provide 5 recommendations for implementing ROV in value assessment. First, the decision to quantify ROV should be based on a qualitative evaluation of whether the treatment can enable greater benefits from future innovations. Second, ROV should be quantified in the same value assessment framework (eg, cost-effectiveness analysis using quality-adjusted life-year) as the conventional value. Third, method for quantifying ROV should consider data availability, rate of innovation, and sources of future health improvements. Fourth, ROV estimate should be presented alongside the conventional value as a separate element due to its inherently large uncertainty. Finally, generalizability of ROV estimate should be evaluated, and local data should be used when available.

Conclusions: ROV can arise from a variety of mechanisms that should be considered before investing in an ROV analysis. Calculating ROV includes exploring different approaches for forecasting future innovations and future improvements in health.

Keywords: novel elements of value; real option value.