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Health Economics and Outcomes Research (HEOR)

What is health economics and outcomes research (HEOR)?

Health economics and outcomes research (HEOR) is a function within pharmaceutical and life science companies that generates evidence of the value of a new drug or other intervention.

HEOR establishes and measures the link between treatments and actual outcomes, thus providing evidence-based guidance on care improvement. It takes a broad view of the health outcomes of interventions, including clinical trial data, real clinical outcomes, financial considerations, and measures of quality of life and satisfaction as reported by patients through surveys and electronic health records.

What is the role of HEOR in pharma?

Within pharmaceutical companies, HEOR is used to understand how providers prescribe drugs and how the drugs are performing in the real world, for real patients. The evidence is ultimately used to improve patient care.

With precision medicine and value-based care playing an increasingly important role, HEOR is moving from a support function to a central role for pharmaceutical companies. Health economics and outcomes research can inform decision-making at many stages in the product life cycle from research and development to pricing, market access, strategic planning, and lifecycle management.

What is the HEOR model for pharmaceutical companies?

When conducting health economics and outcomes research, pharma companies typically go through many stages, including:

  • Identifying data gaps
  • Determining economic projections for market access
  • Analyzing clinical trial data to support product value
  • Collecting additional evidence from published studies
  • Developing budget models to aid in pricing process and reimbursement negotiations
  • Collecting data from real-world outcomes following product use

What is HEOR data used for?

HEOR data has multiple use cases, including:

  • Use by regulating agencies to establish reimbursement structures and to identify successful interventions
  • Guides healthcare coverage and access decisions
  • Aids in closing the gap between clinical trial results and real-world health outcomes
  • Contributes to identifying interventions that are most effective for specific patient populations
  • Helps pharmaceutical companies communicate the value of their innovation to stakeholders (e.g., physicians, patients, payors)

Why is HEOR data important?

Health economics and outcomes research is an important function in improving care by ensuring that new drugs and interventions are creating positive health outcomes for patients.

It is also essential for medical affairs professionals to have a working knowledge of HEOR to guide meaningful conversations with healthcare providers about health economic concepts.