Payoffs

Overview

This document outlines the steps taken to determine input values for the payoff module.

Step 1: Estimating annual COPD medication costs

Annual COPD medication costs were estimated using two components:

Inhaler unit cost by drug class
- Prices were obtained from published literature (DOI: 10.1513/AnnalsATS.202008-1082RL). Prices of SABA and LAMA were digitized from Figure 2A as these prices were not reported in the text.
- It was assumed that one inhaler is used per month per drug class, resulting in 12 inhalers annually.
- Annual cost per drug class (2018 Costs USD) was calculated as:
  Annual Cost = Inhaler Unit Price × 12
Real-world dispensing frequency based on proportion of days covered (PDC)
- PDC estimates were used to determine adherence to inhaler therapies
- Sources for PDC data include:
  - Mannino et al. 2022 (DOI: 10.1016/j.rmed.2022.106807)
  - Slade et al. 2021 (DOI: 10.1186/s12890-021-01612-5)
  - Bengtson et al. 2018 (DOI: 10.1177/1753466618772750)

Dispense frequency per year (adjusted via PDC)

Mannino et al. 2022:
- ICS + LAMA + LABA: PDC = 0.66

Slade et al. 2021:
- LAMA + LABA: PDC = 0.44
- LAMA: PDC = 0.37

Bengtson et al. 2018 - SABA: The study reported an average of 1 fill per month

Adherence: Adherence was determined to be an average of the PDC reported between the studies that assessed non-SABA inhalers= 0.49.

Estimated Annual COPD Inhaler Costs by Drug Class
Drug Class	Monthly Cost (USD)	Dispenses/Year	Estimated Annual Cost (USD)
ICS + LAMA + LABA	296.11	12	3,553.32
LAMA	208.10	12	2,497.20
LAMA+LABA	218.05	12	2,616.60
SABA	32.20	12	386.40

COPD-related background costs were estimated using data from Wallace et al 2019 (DOI: 10.18553/jmcp.2019.25.2.205) Table 3, specifically the row labeled “COPD-related costs, all patients”. Background costs were calculated by subtracting the costs of Inpatient Care, Emergency Room (ER) Visits, and Pharmacy from the Total COPD-related Medical Costs (2016 Costs USD) as these costs are determined separately.

COPD-related Background Costs by GOLD Stage
GOLD Stage	Total COPD-related Medical Costs	Inpatient	ER Visits	Pharmacy	Background Cost (USD)
GOLD I	5,945	3,853	186	592	1,314
GOLD II	6,978	4,449	144	1,101	1,284
GOLD III	10,751	6,277	193	2,000	2,281
GOLD IV	18,070	12,139	534	2,479	2,918

Step 3: Estimating exacerbation costs by severity

The exacerbation module assigns per-event direct medical costs based on severity: Mild, Moderate, Severe, and Very Severe. These cost estimates were derived from U.S.-based healthcare utilization studies.

Mild Exacerbation: Defined as an increase in bronchodilator use that does not result in a healthcare encounter. It is assumed that half of the number of available doses in a SABA inhaler is used per event. Cost of SABA inhaler is obtained from the published literature (DOI: 10.1513/AnnalsATS.202008-1082RL).
Moderate Exacerbation: Involves a visit to a healthcare facility (e.g., physician office or emergency department) without resulting in hospital admission.
Severe Exacerbation: Defined as an inpatient hospital admission
Very Severe Exacerbation: Defined as ICU admission

The following references were used:

Dalal et al. 2011 (DOI: 10.1016/j.rmed.2010.09.003) — 2008 Costs USD
Bogart et al. 2020 (DOI: 10.37765/ajmc.2020.43157) — 2017 Costs USD

Per-Event COPD Exacerbation Costs by Severity
Exacerbation Severity	Definition	Cost (USD)	Source
Mild	Increased SABA medication usage	16.1	Assumption
Moderate	No hospitalization	2,107.0	Bogart et al. 2020
Severe	Inpatient hospitalization	22,729.0	Bogart et al. 2020
Very Severe	ICU + intubation	44,909.0	Dalal et al. 2011

Step 4: Estimating costs for smoking cessation

Estimating the Cost of Smoking Cessation Therapy

To estimate the cost of smoking cessation therapy, the distribution of commonly used pharmacologic and behavioral therapies was obtained from the MMWR study (DOI: 10.15585/mmwr.mm7329a1). The reported usage among individuals attempting to quit included:

Nicotine patch: 19.6%
Nicotine gum/lozenge: 18.4%
Nicotine spray/inhaler: 1.0%
Varenicline: 9.6%
Bupropion: 6.4%
Behavioral counseling: 7.3%

Reweighted to Assume 100% Uptake

To standardize the distribution across therapies, reweighting was performed using the total of all therapies (62.3%):

Nicotine patch: (19.6 / 62.3) × 100 ≈ 31.5%
Nicotine gum/lozenge: (18.4 / 62.3) × 100 ≈ 29.5%
Nicotine spray/inhaler: (1.0 / 62.3) × 100 ≈ 1.6%
Varenicline: (9.6 / 62.3) × 100 ≈ 15.4%
Bupropion: (6.4 / 62.3) × 100 ≈ 10.3%
Behavioral counseling: (7.3 / 62.3) × 100 ≈ 11.7%

Estimated 3-Month Cost of Smoking Cessation Therapy

Cost estimates were based on 2025 GoodRx prices for a 3-month course of pharmacotherapy.
For behavioral counseling, Medicare reimburses up to 8 sessions per year, which was assumed to be the number of sessions used.
The per-session cost was based on 2015 CPT codes:

99406: $14.37 for sessions <10 minutes
99407: $27.67 for sessions >10 minutes

A midpoint value of $21.02 per session was applied, totaling $168.16 for 8 sessions.

Using the reweighted proportions, the weighted average cost for 3 months of smoking cessation pharmacotherapy was calculated as:

Average cost: $125.65

Smoking Cessation Therapy Use and Cost Estimates (3-Month Duration)
Therapy	Reweighted Proportion (%)	Cost (USD)
Nicotine Patch	31.5	71.00
Nicotine Gum/Lozenge	29.5	35.00
Nicotine Spray/Inhaler	1.6	550.00
Varenicline	15.4	402.00
Bupropion	10.3	25.00
Behavioral Counseling	11.7	168.16
Average (weighted)	–	125.65

Step 5: Estimating costs for GP visits and diagnostic spirometry

GP visits.
CPT code 99214 is a standard outpatient GP visit, the midpoint between facility and non facility visit reimbursement amounts was used which equates $94.15 (2015 Costs USD)

Spirometry. CPT code 94060 was used which equates to $61.81 (2015 Costs USD)