Health Economics and Outcomes Research: Why a Wise Manufacturer Should Think of It Early and Often

A couple of years ago I went to a meeting in Washington, DC, to be a part of the conversation on the value of Health Economics and Outcomes Research (HEOR) within the biopharmaceutical and device industry. It was a great meeting, mostly attended by people who were intimately involved in HEOR in their every-day lives. It was also somewhat spooky. None of the presenters had shared thoughts prior to the meeting. Yet everyone’s message was oddly aligned: we need more quality HEOR studies earlier in technology development.

There was broad consensus that most companies need a better understanding of the role, methodologies, and value of HEOR within their development programs. And while clinical trialists are a well appreciated asset in the industry, HEOR groups still tend to be the red-headed step children. They get little buy-in from other departments and minimal support from the leadership, and their output is viewed with suspicion. To be sure, there are companies who understand the role of HEOR, and these are the success stories. But many remain in the dark. The message at the meeting was clear, albeit a bit paradoxical: we must do a better job articulating our own value proposition!

There are many compelling reasons why this needs to happen. The 21st century healthcare landscape is filled with tremendous challenges that are here to stay. While 20 years ago all of the emphasis in drug development was on the FDA approval, today, in our economically constrained healthcare system, no approved technology can succeed without articulating what value it brings to the table. Therefore, the industry cannot afford to lag behind the payor community in their understanding of economic arguments. For the manufacturer who is willing to accept them, these challenges create an opportunity to become a real partner in patient-centered, high quality, efficient healthcare delivery.

I have always argued that a manufacturer needs to be the biggest expert on the disease being pursued and its treatment; and this, I believe, is largely the case. Yet by necessity this expertise must extend to the value proposition for their technologies that goes well beyond the statistically significant improvements over placebo required by the FDA for approval. We must develop objective milestones by which to judge worthiness of technologies in development at every point in the development process. Those who do, will adapt to and succeed in this atmosphere of cost controls. Those who don’t, do so at their own peril. It is imperative to engage in this ongoing evaluation of our innovations with a critical eye to what value they will bring to the society.

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