ABSTRACTObjectives: People with severe hemophilia suffer from frequent intra-articular hemorrhages, leading to pain, swelling, reduced flexion, and arthropathy. Elective orthopedic surgery using factor VIII (FVIII) replacement to prevent uncontrolled bleeding has been endorsed as an effective treatment option for patients with severe or advanced hemophilic arthropathy. These surgeries reduce pain, restore mobility and function, and reduce the frequency of recurrent joint bleeds. Unfortunately, some patients with hemophilia develop inhibitors to FVIII, which neutralize FVIII activity and render the use of even massive amounts of FVIII replacement ineffective and surgery very risky. For this reason, elective surgical procedures in high-titer inhibitor patients had largely been abandoned until the introduction of new agents, such as recombinant activated factor VII (rFVIIa, NovoSeven, Novo Nordisk A/S, Denmark). rFVIIa has been shown effective for prophylaxis during elective surgery and has therefore improved the feasibility of orthopedic surgery in hemophilia patients with high-titer inhibitors. The present research explored, from a modified US payer perspective, the direct economic and quality of life benefits of four different elective knee surgeries (total knee replacement [TKR], knee arthrodesis [KA], proximal tibial osteotomy, and distal femoral osteotomy) with rFVIIa coverage in hemophilia patients with high-titer inhibitors.Methods: An exploratory literature-based life-table model was developed to compare the direct medical costs and quality of life of two hypothetical cohorts of high-titer inhibitor patients with frequent bleeding episodes: one undergoing and the other not undergoing elective knee surgery. Knee surgery costs included perioperative rFVIIa costs, inpatient and rehabilitation care, and repeat procedures due to surgery failure, prosthesis loosening or deep infection. Based on efficacy studies, knee surgery was assumed to reduce mean annual bleeding episodes at the affected joint from 9.13 to 1.64. The cost of managing each bleeding episode was estimated at $15 298. Thus, by reducing bleeding episodes, surgery was expected to result in related cost offsets. All costs were expressed in 2006 US dollars. Surgery was also assumed to result in gains in quality of life by reducing pain and reducing bleeding episodes. The impact of pain reduction on quality of life and utility was estimated by simulating EQ-5D scores for a typical patient with and without knee surgery.Results: Based on the model, average knee surgery costs are predicted to range from a low of $694 000 (for KA) to a high of $855 000 (for TKR). However, knee surgery is also expected to reduce the subsequent number of bleeding episodes and resultant costs, leading to long-term costs savings. Due to improvement in pain levels, surgical patients are expected to experience improvements in quality-adjusted life-years (QALYs). Thus, surgery appears to be the preferred strategy (i.e., saves costs and increases QALYs). Based on the assumptions used in the model, the initial cost of knee surgery was offset during the 8th and 10th years for KA and TKR, respectively, with intermediate break-even time for the other surgeries. As expected, cost savings and gains in QALYs increased over time, as well as the cost effectiveness of knee surgery. Specifically, the cost per QALY with KA and TKR fell under $50 000/QALY during the 6th and 8th years, respectively, with intermediate time for the other surgeries.Conclusions: The present exploratory analysis is based on the long-term extrapolation of data from a small number of patients without inhibitors and short-term studies. It suggests that major knee surgery utilizing rFVIIa in hemophilia patients with inhibitors may be cost-effective on average, with expected cost savings apparent within a decade of knee surgery. The present exploratory results should be validated with real-world, longitudinal patient data.