Purpose: Knee osteoarthritis (OA) is a disabling condition characterized by radiographic evidence of cartilage degeneration. Current disease modifying osteoarthritis drug (DMOAD) development focuses on slowing such structural damage. Our goal was to determine efficacy, cost and toxicity thresholds under which DMOADs would be a cost-effective addition to current knee OA management.
Method: We developed a state-transition model of knee OA. We considered a population with mean age 62. Standard knee OA care included pain management, physical therapy and total knee arthroplasty, for those with end-stage disease. We examined DMOAD characteristics along four domains: structural efficacy (inhibiting progression to the next radiographic severity grade), pain efficacy (% experiencing pain relief, independent of structural effect), severe toxicity (leading to treatment discontinuation and increased cost) and DMOAD cost. In the base case, we assumed DMOADs exhibit 50% structural efficacy, 20% pain efficacy, 0.5%/year severe toxicity, and an annual DMOAD cost of $1,000. Costs and quality adjusted life years (QALYs) were discounted at 3% per year. In sensitivity analyses, we varied structural efficacy from 25-75%, pain efficacy from 0-50%, toxicity from 0.1-2% and DMOAD cost from $1,000-$5,000.
Result: In the base case, DMOADs led to a mean increase in 0.03 QALYs at an additional cost of $3,530, resulting in an incremental cost-effectiveness ratio (ICER) of $136,000/QALY. Reducing severe toxicity to 0.1%/year led to an ICER of $91,000/QALY. Reducing pain efficacy below 20% or increasing severe toxicity above 0.5%/year led to an overall decrease in QALYs while increasing costs. DMOAD ICER improved with pain efficacy > 20%. DMOADs priced at $5,000/year satisfied the ICER threshold (Figure) only when they carried no toxicity and offered structural and pain efficacy of = 75%.
Conclusion: DMOADs that slow knee OA progression may have ICER comparable with other accepted therapies, but only if they also lead to independent pain relief. Toxicity is a key factor affecting ICER. DMOADs priced at $5,000/year achieved ICERs <$50,000 only when they carried no toxicity and offered structural and pain efficacy of > 75%. 
Candidate for the Lee B. Lusted Student Prize Competition