HEOR: Health Economics and Outcomes Research

Comparison of US and UK healthcare systems

What is health economics?

Health economics and outcomes research (HEOR) is a multidisciplinary process that supports the health decision-makers to provide access to any drug or health services to any specific patient pool. HEOR explicitly provides key clinical and economic evidences to help healthcare payers to determine the actual value of any drugs complementing all its clinical and economic aspects.

Health economics provides all the key evidence of a specific health technology (drug) or healthcare service regarding its efficiency, safety, effectiveness to the health decision-makers in an explicit way. HEOR provides a complete value of new healthcare technology or drug and its behavior in production and consumption through a proper interaction between individuals and healthcare providers.

Health is ultimately concerned with the way how we choose our healthcare services, biopharmaceutics or technologies, to minimize its costs or maximize the profit or utilities within our health care systems following a set of strategic rules and at affordable prices.

Why we need HEOR?

HEOR provides explicit data to the healthcare payers which helps them to determine if the treatment works in any target population. HEOR also helps to understand how much of the healthcare technology or treatment cost a healthcare system should reimburse based on its cost-effectiveness.

As we know, healthcare decision-makers across the world always have multiple treatment options including biopharmaceutical interventions, medical devices, or other healthcare services, and face a big challenge to select one of a few among them.

The benefits of a healthcare technology can be clinical, economic, or both, which may be very difficult to measure directly. The healthcare payers always need to access the clinical benefits and costs of all therapeutic options which can range dramatically and thus need a proper value proposition regarding cost-effectiveness outcomes.

Health economics and outcomes research (HEOR) helps all the healthcare decision-makers which may include patients, governments, payers, clinicians, health-ministries etc. to compare these interventions or healthcare technologies adequately and select among the available therapeutic options.

The interest of governments and other healthcare payers towards health economics strategies has grown exponentially as all want to provide the best treatment option at an affordable cost.

What are the key challenges of local healthcare payers?

Healthcare model of any country works on a limited and healthcare budget. The healthcare decision-makers always need to best utilize that fixed budget for the financial year. This creates a huge pressure on the local healthcare payers to decide how to constrain costs while having the decision to which drugs are to be reimbursed and which one not or how much it should be reimbursed. The value of Health Economics and Outcomes Research (HEOR) is thus increasing day-to-day.

The involvement of a market access team during the product development steps and its launch is very essential to demonstrate its real value to healthcare budget holders, which also helps market adoption of a healthcare system to new technologies to its maximum extent.

How HEOR helps drug manufacturers?

The healthcare intervention manufacturers are now feeling the pricing pressure of the new therapies and the regulatory restrictions to its access to the target population more than ever. HEOR strategies help them to demonstrate clinical and economic evidence to the healthcare local payers and decision-makers to gain market access for the therapy and remain competitive for a long.

As we know, the interest of patients, physicians, and payers in a specific product can differ. The legislative environment is increasingly being complicated day by day and thus the methods required to gain market access need to change strategically. Here, HEOR plays a critical role as a scientific multidisciplinary activity for the value demonstration of the treatment effectively and communicates an explicitly quantified evidence of the clinical and economic outcomes to the stakeholders.

HEOR is considered as a central component for demonstrating any healthcare innovation value, regarding various clinical aspects including efficacy, real-world evidence, quality of life (QoL) reports, and economic aspects based on cost-effectiveness and budget impact models. Which supports the new product listing, pricing, and finally its reimbursement.

HEOR: Just a little support function or have a central role in healthcare decision making?

Initially, it was considered as just an additional support function in the drug access to the target population and its reimbursement. Over the years, HEOR has proven its central role in the internal healthcare decision-making process.

Nowadays, all biopharmaceutical and medical device companies are focussing on developing a positive value story of their product at each step of drug development steps. All these big pharms getting help from HEOR professionals and health economic strategies together to make a streamlined value story for their products from early steps of development. This not only provides a piece of useful information for drug research and development, but also in its licensing, market access, pricing. Therefore, HEOR strategies help biopharmaceutical manufacturers at each step like research, planning, market access, and sales.

The key steps involved in HEOR strategies:

The key steps involved in HEOR strategies-heorgps

The value development steps used in HEOR helping in evidence-based recommendations to a healthcare technology to the healthcare decision-makers are mentioned below:

(I) Value determination:

If we talk about the unmet needs in an indication and key target population fulfilled by our new technologies. We have to consider the existing benchmarks in the same therapeutic area. We need to show a better value story for our products than the existing one based on the overall superiority of our product considering all its clinical and economic aspects. HEOR helps in making a positive and superior value story for the manufacturers by explicitly collecting and analyzing all the clinic-economic evidences.

HEOR helps in the determination of the true value of the treatment at each developmental step in an unbiased manner which helps manufacturers to make a proper value story related strategy against the legislative hindrances and the pricing and reimbursement process.

(II). Value demonstration:

HEOR helps the biopharmaceutical manufacturers to demonstrate the true value of the product to the target audience using various economic models based on the outcome research on all clinic-economic elements. This helps healthcare decision-makers to understand the actual value of drugs and to make final decisions regarding its recommendation to their local healthcare system and reimbursement.

(III). Value communication:

HEOR helps to make proper strategies and tactics for the biopharmaceutical companies to communicate unbiased and explicit value story for their biopharmaceuticals.

(IV). Value realization:

HEOR helps drug manufacturing companies in defining price ranges for their drug on true value story and also helps in its seamless market access and reimbursement by the healthcare payers.

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