Health Economics and Outcomes Research Capability Critical for New Product Success

Cutting Edge Information Finds Companies Are Investing for Deeper Bench Strength and Building ROI Models in Market Access

RESEARCH TRIANGLE PARK, N.C.--(BUSINESS WIRE)--Pharmaceutical and biotechnology companies are adapting to a more complex healthcare landscape by better demonstrating the value of their products to private payers, government payers and other stakeholders. The shakeup is accelerating and becoming more formal, according to a recent series of Market Access studies.

“HEOR’s importance is reflected in the growth of these teams”

“We’re looking at health economics and outcomes research teams, pricing groups, health outcomes field forces and overall market access management,” said Adam Bianchi, chief operating officer at Cutting Edge Information. “One theme stands out. Market access and product management teams must clearly demonstrate convincing economic value and patient outcomes data to win reimbursement and favorable positioning for new products.”

The Health Economics and Outcomes Research (HEOR) function is leading the way in this conversation. “HEOR’s importance is reflected in the growth of these teams,” said Shaylyn Pike, senior research analyst. “Two-thirds of companies are increasing their spending in this area in 2012 with average growth of 14 percent.”

Most companies do not currently measure return-on-investment for their HEOR teams. However, executive interviews suggest that as the immediate urgency of expiring patents and an epidemic of austerity policies recedes, these groups will be called upon to deliver clearer ROI metrics. Study findings highlight two key missions that are likely to be in the spotlight as companies review HEOR more formally:

1. Provide economic evaluations that increase formulary access. Formulary success can often be evaluated within months or a few years and linked to HEOR activities.

2. Perform strategic portfolio analysis of pipeline drugs. The value of strategic portfolio analysis can be more difficult to measure. The impact of discontinuing a product at an early phase is hard to precisely determine because success often avoids “negatives” rather than generating revenue. But executives point to several numbers that should be considered:

• How much money would have otherwise been invested and not available for other projects?
• How many personnel would have been committed to the additional work?
• How many extra trials would have been run?

For the latest findings on market access strategy and health economics and outcomes research, visit http://www.cuttingedgeinfo.com/research/market-access/.