Health Economics and Outcomes Research (HEOR) – What’s the value?
As local payers come under more pressure to constrain costs, the value of Health Economics and Outcomes Research (HEOR) is increasing. The involvement of market access teams at every stage of product development and launch is essential to demonstrate real value to budget holders, and thereby maximize market adoption for new technologies.
In order to gain market access and remain competitive, pharmaceutical and medical technology manufacturers must be able to demonstrate clinical and economic evidence to providers, healthcare decision-makers and payers. Now more than ever, pricing pressure and regulatory restrictions are generating increased demand for this kind of outcomes evidence.
Kevin Mayo, Senior Director of Health Outcomes & Pharmacoeconomics at Endo Pharmaceuticals, states that stakeholders are increasingly relying on Health Economics and Outcomes Research (HEOR) information to fully understand product value in healthcare and its potential in real-world clinical practice.
In an increasingly complicated legislative environment, the methods used to gain market access are having to change. Payers, physicians and patients each have their own particular interest in a product. As a scientific discipline that quantifies the economic and clinical outcomes of medical technology, HEOR helps manufacturers of pharmaceuticals and devices communicate the value of their innovations to stakeholders.
It is becoming a central component for demonstrating product value, encompassing aspects such as clinical efficacy, real-world data, patient quality of life reports, opportunity cost of various treatment mixes, budget impact, and cost-effectiveness models. All of which eventually supports the allocation of resources for the listing, pricing and reimbursement of new products.
HEOR, once considered a mere support function, is now playing a central part in the internal decision-making process. Pharmaceutical and medical device companies have brought HEOR professionals and brand strategists together in order to build streamlined value chains. HEOR can now provide useful information for licensing and R&D, as well as pricing and market access strategies, and will help to dictate research, planning and sales strategies.
Going forward, it will be essential for HEOR teams to start to efficiently measure their own impact. Currently less than 10% of US companies measure the return on investment of their HEOR efforts. In order to argue the significance of HEOR evaluation systems, a value development plan (VDP) should be integrated into any HEOR strategy planned to be used as a core business function. The VDP uses evidence-based recommendations to demonstrate and communicate value:
1. Value Determination
Benchmarks available alternatives in a therapy area based on clinical/economic value.
2. Value Demonstration
Identifies tactical outcomes research and economic model projects to demonstrate the clinical and economic elements, respectively, of the target value proposition.
3. Value Communication
Helps to inform and define the value communication strategy and tactics for relevant audiences.
4. Value Realization
Defines price ranges for products based on demonstrated value and addresses reimbursement and seamless market access.
To implement a truly effective value development plan, life sciences companies should ensure that health economics and market access teams are involved at every stage of the product launch process.
Market access planning can’t simply be bolted on at the end of the process. An important part of this is making sure that trials have both economic as well as clinical endpoints, so that the data is available to market access teams later on.
And with new technologies being developed to enable the communication of this often complex information in the field, it’s possible to implement a truly end-to-end market access strategy that maximizes the impact of new treatments.
About the author:
Gijs Hubben is a health economist and one of the founders of BaseCase. He has published extensively in peer-reviewed journals, including on the cost-effectiveness of infectious disease interventions, and screening strategies for hospital acquired infections. With a strong background in pharmacy, health economics and emerging technologies, Gijs’s understanding of the intersection of these disciplines lies behind the unique service offered by BaseCase.
Closing thought: How can we implement a truly end-to-end market access strategy that maximizes the impact of new treatments?