Health Economic and Outcomes Research: An Important Tool in Cost-effectiveness Analysis

The continuous rise in healthcare cost is creating more interest in the field of cost management methods, focusing on quality and cost-effectiveness outcomes. The need for an effective medical intervention and efficient delivery of healthcare services have forced the pharmaceutical and medical device companies to focus on outcome measurement and management. The economic experts think that it will produce huge benefits including improved physician and patient information, increased understanding of the effectiveness of different treatment interventions, and established guidelines for medical management. Nowadays, the cost-effectiveness analysis with the help of health economic and outcomes research (HEOR) has become a conventional tool of overall health financing policy. HEOR involves the pharmacoeconomics (PE) research and health technology assessment (HTA) activities. The HEOR studies are necessary for enhancing the understanding of economic behavior and providing valuable input into health policy and health services research.

In an increasingly complicated legislative environment, it is very difficult for a company to gain market access. As a scientific method that evaluates the economic and clinical outcomes of medical treatment and interventions, HEOR acts as a central mediator for representing the product value, covering important information (such as clinical efficacy, real-world data, patient quality of life reports, opportunity cost of various treatment mixes, budget impact, and cost-effectiveness models), which ultimately supports the distribution of available resources for the listing, pricing and reimbursement of new products. It also acts a central part in the internal decision-making process. Pharmaceutical and medical device companies have combined both the HEOR professionals and brand planners to develop simplified value chains. HEOR helps to provide necessary information for licensing and research and development (R&D), as well as pricing and market access plans and will help to command over research, planning and sales strategies. HEOR outcomes can affect brand management by maximizing return, funding, market access and product uptake at launch and beyond. However, the pharmaceutical and medical device companies need to understand how to convert HEOR outcomes from traditional academic exercises into key components of the business strategy.

In order to enter into the business from academics, health economists are important for the development in commercial development planning, starting from the proof of concept. Further, the outcomes provided must be communicated in terms of business development to deliver messages to the targeted audiences. HEOR provides several benefits to the pharmaceutical brand marketing team. First, the HEOR specialist’s work will support the brand strategy and goals. Second, the process will be started immediately and the outcomes will be ready when they are actually needed. Third, as the development of product takes place, the plan offers a way to measure the product’s position on the value continuum. Last, the contribution of HEOR can be measured and recognized directly.

Necessary Requirements to Conduct HEOR

To gain access from academics to business, there is a need of a value-demonstration process that the companies must develop. It is a strategic process which first decides the value through appropriate research and communicates the documented value in such a way that resonates with the internal and external audience. A value-demonstration process includes evidence-based recommendations on how the product’s value will be decided, verified, communicated and realized in the market. It should be created when the product is in the proof of concept phase and later become a living document representing new information throughout the product life cycle.

Steps for the Development of Plan


  1. Conduct an environment assessment program which includes; reviewing the marketing plan, market research on the product, market forecasts, and competitor profiles
  2. Collect input from key internal staff on their prospects regarding the product and its value
  3. Evaluate the needs of external stakeholders (g., payers, patients, provider, employers) for their needs, expectations, and perceptions of treatment in the therapy area
  4. Evaluate the product against the alternatives, identifying clinical profile features that may be perceived to add value and articulate the target value proposition
  5. Prepare the value strategy plan and associated tactics which identify all the ways that value demonstration could support the marketing planning to communicate the product’s value proposition and messages. It should be clarified that there is a need for HEOR studies in order to prepare supporting documentation.

HEOR in the Promotion of Resources

Health economics is also considered necessary for the promotion of the use of rare resources available for health care in an effective way. It promotes the technical efficiency in health service provision and maximizes the number of services that can be provided with the least amount of inputs without affecting the quality of care. It distributes the resources, funds (government and charity) on the basis of relative needs of health services and identifies the cost-effective treatment options for chronic health conditions.

Summarizing, HEOR is a tool that is part of an approach to overall health system financing. It helps to consider the role and value of cost-effectiveness in the planning, management or monitoring of health systems.

Abhishek Kumar

Dr. Shivali Arora