Cost-effectiveness of second-line atezolizumab in Canada for advanced non-small cell lung cancer (NSCLC)

Aim: To assess the cost-effectiveness in Canada of atezolizumab compared with docetaxel or nivolumab for the treatment of advanced NSCLC after first-line platinum-doublet chemotherapy.

Materials and methods: A three-state partitioned-survival model was developed. Clinical inputs were obtained from the phase III OAK trial comparing atezolizumab with docetaxel in patients with advanced NSCLC who progressed after first-line platinum-doublet chemotherapy. Overall survival (OS) and progression-free survival (PFS) were extrapolated beyond the trial period using parametric models. A cure model assuming a 1% cure fraction was fitted to the OS data for atezolizumab. Outcomes for nivolumab were informed by a network meta-analysis (NMA) vs atezolizumab. Resource use and costs were informed by clinical expert opinion and published Canadian sources. Utility values were obtained from the OAK trial. The perspective of the analysis was that of the Canadian publicly-funded healthcare system. The base case time horizon was 10?years, and the discount rate was 1.5% annually for both costs and effects. Scenario analyses were performed to test the robustness of the results and all analyses were performed probabilistically.

Results: Atezolizumab demonstrated a quality-adjusted life-year (QALY) gain of 0.60 compared with docetaxel at an incremental cost of $85,073, resulting in an incremental cost-effectiveness ratio (ICER) of $142,074/QALY. Atezolizumab dominated nivolumab (regardless of dosing regimen), based on modest differences in both QALYs and costs. Docetaxel was most likely to be cost effective at willingness-to-pay (WTP) thresholds below $125,000/QALY gained, while atezolizumab was most likely to be cost effective beyond this WTP threshold. In most scenario analyses, the results remained robust to changes in parameters. A reduced time horizon and alternative approaches to the NMA had the greatest impact on cost-effectiveness results.

Conclusion: Atezolizumab represents a cost-effective therapeutic option in Canada for the treatment of patients with advanced NSCLC who progress after first-line platinum doublet chemotherapy.     

RENT SEEKING AND SOCIAL INVESTMENT IN TASTE CHANGE*

We study the social allocation of resources to the alteration of preferences. Such taste changes are Pareto-preferred if, according to both the original and the new taste regime, the resource allocation resulting from the taste change constitutes an improvement. According to this criterion, a degree of altruism is in general Pareto-preferred, because it reduces socially wasteful activities, such as lobbying, bargaining and other rent seeking activities designed to increase one agent's expected share of the contested rent. We present a stylized model that captures the role of education in generating altruism and thus reducing the expenditure on rent seeking.     

Book briefs

Food policy: Integrating supply, distribution and consumption, EDI series in economic development, John Hopkins University Press, Baltimore and London, 1987

Food poverty and consumption patterns in Kenya, International Labour Office, Geneva, 1986     

Optimal product variety in radio markets

A vast theoretical literature explores inefficient market structures in free‐entry equilibria, and previous empirical work demonstrated that excessive entry may obtain in local radio markets. We extend that literature by relaxing the assumption that stations are symmetric, allowing for endogenous horizontal and (unobserved) vertical station differentiation. We find that, in most broadcasting formats, a social planner who takes into account the welfare of market participants eliminates 50%–60% of the observed stations. In 80%–94.9% of markets where high‐quality stations are observed, welfare could be unambiguously improved by converting one such station into low‐quality broadcasting, suggesting local overprovision of quality.     

Cinematic Explosion: New Products,Unpredictabilty and Realized Quality in the Digital Era

While file sharing has undermined firms’ ability to generate revenue for their products, other technological change has reduced entry barriers in cultural industries, with substantial positive impacts on the availability of new books and recorded music. Unpredictability of product quality is a generic feature of cultural goods, including music, books and movies, so an infusion of new products holds the possibility of bringing not just low‐appeal products but also new products that consumers find highly appealing. This paper explores the effects of reduced costs of production, promotion and distribution in the motion picture industry, asking four questions. First, we document substantial growth in the number of movies brought to market, particularly since the early 2000's. Second, we document growth in institutions by which consumers can discover new movies, many of which are produced outside of the major studios and not released in theaters. Third, we show that the new independent movies account for a growing share of commercially successful movies. Finally, we present evidence, based on both critical assessments and usage, that recent vintages are more appealing to consumers than earlier offerings. These findings on movies echo developments documented elsewhere for recorded music and books.     

Assessing Conformity with Generally Accepted Accounting Principles Using Expert Accounting Witness Evidence and the Conceptual Framework

To enhance understanding of the status of the Financial Accounting Standards Board's Conceptual Framework for Financial Reporting, we analyse important rules of evidence in United States (US) courts regarding the presentation of expert accounting witness testimony. We draw on this analysis to recommend the relocation of the Conceptual Framework in the US Generally Accepted Accounting Principles (GAAP) hierarchy. For empirical support, we explore how rules of evidence in the criminal trial in 2006 of Enron's two most senior executives affected assessment of whether Enron's financial reports conformed with the FASB's GAAP. We recommend that the FASB's Conceptual Framework should be included in authoritative literature as the uppermost authority, and that it be grounded closely in user needs and the ethical principles associated with meeting those needs. Further, we recommend that accounting expert witnesses adopt an overriding concern for objectivity and impartiality in assisting courts to understand complex accounting matters within the Conceptual Framework.     

Economic value of analyst recommendations in Australia: an application of the Black–Litterman asset allocation model

This study empirically examines the investment value of security analyst recommendations on constituent stocks of the S&P/ASX 50 index. We find that stocks with favourable (unfavourable) recommendations on average outperformed (underperformed) the benchmark index. An investment strategy using the Black–Litterman asset allocation model that incorporates consensus analyst recommendations, in conjunction with daily rebalancing, outperforms the market in terms of return and risk‐adjusted performance measures. The investment strategy involves high levels of trading, and no significant abnormal returns are achieved after transaction costs. Less frequent rebalancing, under most situations, causes a decrease in both performance and turnover. Filtering of dated recommendations causes an increase in turnover, while having mixed effects on investment returns.