Health Economics and Outcomes Research is the functional area focused around economic modelling for payer stakeholders (including HTA bodies and insurance companies) and real world evidence generation. It usually sits within the Medical Affairs or Global Market Access organization and is very scientifically-driven, with most work being done with the aim of having scientific dialogue with technical experts or for publication in peer-reviewed journals.
What is Health Economics?
The health economics component is often centered around cost-effectiveness modeling, especially in global organizations. These are usually Markov models created within Microsoft Excel and allow the user to estimate the ICER for a given drug compared to standard of care. The Excel-based model is usually flexible in terms of allowing users to modify many of the inputs including populations of interest, cost of drug, effectiveness of drugs, etc. in order to allow for estimation of ICERs for specific scenarios of interest. Cost effectiveness models developed by Global HEOR organizations will often be modified by country-level affiliates to reflect local conditions for local HTA discussions or needs. A second common deliverable under health economics is the budget impact model. These models allow for stakeholders to estimate the cost associated with increased utilization of a new drug product over time and is used in discussions when governments or customers are curious about what financial impact coverage of a new drug may have.
What is Outcomes Research?
The outcomes research component of HEOR is focused on real world evidence generation. This includes retrospective studies of administrative claims data such as Truven, Optum, or Cegedim, registry data, electronic health record (EHR) data, chart-review data, etc. It may also include prospective observational studies or pragmatic clinical trials. These studies may look at a wide variety of topics including burden of disease, real world treatment patterns, adherence and persistence, and real world effectiveness. Target audiences may include providers, payers, patients, or advocacy organizations.
Patient-Reported Outcomes
HEOR groups often also oversee work related to patient-reported outcomes (PROs) including advising R&D teams on incorporation of PROs in clinical trials and development and validation of new PROs.
A Group with Many Names: HEOR, RWE, EBM, and more
HEOR organizations can go by a very broad set of names across the industry. While HEOR is the most common and universal term, similar groups may be called Evidence Based Medicine (EBM), Real World Evidence, Health Economics and Value Assessment, or some combination of these and related terms (eg Global Patient Outcomes and Real World Evidence or Value & Evidence Strategy).
ISPOR is the predominant professional society that focus on health economics and outcomes research as a discipline.