Payer access is, perhaps, the most critical element to a successful drug launch. Whether referring to government payers, private health insurance companies, integrated medical systems or pharmacy benefits managers, payer organizations are shrewd, cost conscious and data hungry.  In today’s pharmaceutical industry, it is no longer enough for companies to develop a safe and effective product. To obtain competitive reimbursement status for new drugs, companies have to prove that their products improve on the standard of care and are more cost effective. That’s where health economics and outcomes research (HEOR) plays a critical role. 

HEOR teams – also referred to as health outcomes or pharmacoeconomics – represent an intersection between medical affairs, market access and commercial teams. For a new drug to successfully launch in the market, companies need to secure reimbursement. And the process by which they obtain reimbursement from payers combines analysis of clinical, economic and health outcomes data. 

The combination of health economics and outcomes research may seem complex, but each part serves a valuable purpose. Health economics describes cost analyses for therapies that manufacturers – both drug and device – present  to health care systems and payers. Pharmacoeconomic studies aim to identify, measure and compare the economic value of a particular treatment as a function of it’s health benefits for patients. Payer organizations rely on this data to evaluate whether a particular treatment will provide the same or better health outcomes at a better cost compared to existing treatments. 

Outcomes research, on the other hand, is an attempt to identify, measure, and evaluate the patient’s end results of the treatment or service received. Not all of the outcomes will describe clinical or economic consequences. For example, quality of life – or the attempt to measure a patient’s health status or satisfaction with the healthcare services provided – are often included in outcomes research. Including quality-of-life measures makes the health outcomes component of the analysis more interpretive.

HEOR Teams Address Critical Stakeholder Needs

The primary goal for HEOR teams is to complement traditional clinical trial data, such as efficacy, safety and quality data, with economic and outcomes information that helps decision makers’ develop pricing and access options for how patients receive certain treatments. The HEOR data that healthcare payers request helps determine whether new products will not only treat the patients’ conditions, but also how patients will manage to afford the cost of treatment. Furthermore, pharmacoeconomic analysis helps determine how a product’s safety or efficacy issues impact on a patient’s quality of life. 

There are currently no standardized processes for payers in the United States to request or use HEOR data, though some international agencies in other parts of the world do. In the United States, pharmaceutical companies staff HEOR teams to develop product dossiers that provide detailed data presentations for payers. The companies conduct pharmacoeconomic studies in parallel with clinical trials. But beyond clinical development, companies continue to collect economic, outcomes and real-world data throughout a product’s lifecycle. This post-market data allows companies to continue informing payer stakeholders about their products’ pharmacoeconomic benefits.

Quality of Life Measures 

The data that clinical trials collect is largely focused on meeting the trial’s clinical endpoints. HEOR aims to provide measurements beyond the limits of clinical trial data. How a patient feels while on a treatment can be the most important outcome measure. If a new product effectively treats the patient’s condition but makes the patient feel worse overall due to the drug’s side effects, the patient may stop the treatment ultimately leading to poorer outcomes. Health economists have developed new outcomes measures to track a patient’s quality of life (QoL).

Quality of life is a broad category for measuring how a patient feels. Some consensus has developed to define QOL to focus on a disease’s impact and treatment relative to the well-being of a patient. But beyond the disease itself and how the patient treats it, physical and social environment also affect an individual’s QOL. For the purposes of calculating health-related quality of life, however, only patients’ symptoms and their reported perceptions contribute to these measures. 

Health-related quality of life measurements tend to fall into two categories:

• Health status assessments, which are self-assessments that measure multiple aspects of a patient’s perceived well-being. These assessments typically compare groups of patients receiving different treatments or the effect of a treatment for a single group over time. Thus, health status assessments are most often used in clinical trials comparing treatment regimens. To track health status assessments, healthcare providers will frequently ask patients about how they feel the treatment is helping manage their disease, whether the disease is more or less severe than before, and whether the patient is more or less frequently affected by the disease.  

• Patient preference assessments, which aims to understand the patient’s decision-making process without knowing what the treatment’s outcome will be. To assess patient preference, healthcare providers try to understand the patient’s wishes regarding their disease’s impact versus quantity of life.

The Evolution of HEOR Teams

The success of HEOR to help payers make strategic reimbursement and market access decisions has led to the advent of more advanced trends in pharmacoeconomic analysis. Beyond advanced tool and methodologies for developing drug pricing strategies, drug manufacturers have begun to look at the following trends and how they will impact payer reimbursement in the near future:

• Real-world evidence

• Universal health coverage

• Value-based payment models

• Digital technologies and big data

• Personalized medicine

The HEOR role has become a strategic sub-function among many medical affairs teams. HEOR represents the intersection of market access, commercialization and medical affairs. All of these functions rely on the strategic impact that HEOR plays in their organizations’ success. Over the last decade, HEOR teams have moved from a supporting role in the pharmaceutical industry to a vital, strategic group that delivers a significant impact on a new product’s market uptake.