Ashton Tweed has created the first Executive Talent Bank for the Life Sciences.

Health Economics and Outcomes Research — Key to Demonstrating Product Value Today

In today’s competitive market, pharmaceutical, biotech, and medical device firms must provide compelling evidence of the value of their products. In addition to efficacy and effectiveness, the cost-efficient use of healthcare resources provided by Health Economics and Outcomes Research (HEOR) information is increasingly used to fully demonstrate a product’s value. During an interview with Ashton Tweed, Joseph Jackson, PhD – a veteran in the field of applied economics and outcomes research – shared his perspective on the growing role of HEOR in the healthcare industry today.

Use of HEOR in Formulary Decision-Making on the Rise

The use of HEOR data in formulary decision-making is on the rise, according to results from a recent study by Diana Brixner, PhD, RPh – professor and chair, department of pharmacotherapy, and executive director of the Outcomes Research Center at the University of Utah. Dr. Brixner surveyed professionals involved in formulary decision-making at U.S. health plans to determine their use of HEOR information. Pharmacy benefit managers (PBMs), health maintenance organizations (HMOs), preferred provider organizations (PPOs), integrated healthcare systems, and the Department of Veterans Affairs were represented in the study results, which showed:

• Approximately 36% to 38% of plans sometimes or often use HEOR data.
• 38% of plans report that the current use of HEOR data in contracting is done increasingly, while 33% never use it.
• The future use of HEOR in contracting is expected by:
  
  • 40% of respondents to certainly increase
  • 32% of respondents to probably increase
  • 18% of respondents to increase to a limited degree.

Why Is HEOR Important Today?

Healthcare resources are scarce, says Dr. Jackson, so efficacy, safety and medical product quality are not enough. Today, life sciences companies must show value – incremental value over the existing care that has been proven effective – especially when there’s a close competitor involved.

To demonstrate value, Dr. Jackson explains, HEOR helps to answer the following three major questions:

1. Do patients benefit?
2. Which treatment works best?
3. Are healthcare resources well spent?

A crucial aspect of HEOR, Dr. Jackson points out, is that the assessment of value follows in the above order. In other words, the most important question is whether a product is efficacious and benefits patients. Once that has been established, the next level is the relative effectiveness compared to other products on the market. Then, when these two questions have been answered sufficiently, the incremental cost efficiency is considered.

Effectiveness Is the Noun; Economic Evaluation Is the Adjective

Dr. Jackson uses the following analogy: Effectiveness is the “noun” in HEOR, while health economics is the “adjective that modifies the noun.” Effectiveness not only assesses efficacy in clinical trials, but also determines whether a medical intervention works in real-world clinical settings. So by considering effectiveness as the noun, economic evaluations should act like the adjective – aligning with the research to optimize the clarity and appropriateness of the findings.

When collecting HEOR data, therefore, starting early in the study design and product-development process is important. The Food and Drug Administration (FDA) limits a medical product’s labeling to health claims that have been proven by well-controlled studies. If a drug is shown to have a beneficial effect on cholesterol reduction and blood pressure, Dr. Jackson exemplifies, the healthcare economic information should also align with the approved labeling.

Using an osteoporosis drug as another example, Dr. Jackson points out that the economic consequences of fracture prevention could be considered if data is available to support the claim. If the company marketing the osteoporosis drug has only bone-density data, however, it can’t talk about the economic impact on fracture prevention.

A key to HEOR, Dr. Jackson summarizes, is that the economic data must link to the evidence. He uses an idiom to emphasize his point: “You can’t make a silk purse out of a sow’s ear – you need silk.”

Ashton Tweed would like to thank Dr. Jackson for this interview. If your company needs help in the area of outcomes research or from other members of the Ashton Tweed Life Sciences Executive Talent Bank, we can supply that assistance either on an interim or a permanent basis. Alternatively, we’d also like to hear from outcomes research specialists who are looking for interim or permanent opportunities. In either case, please email or call us at 610-725-0290. Ashton Tweed is pleased to continue to present insightful articles of interest to the industry.