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Market Research Report

Health Economics and Outcomes Research

Published by Cutting Edge Information Product code 244875
Published Content info 299 Pages
Delivery time: 1-2 business days
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Health Economics and Outcomes Research
Published: May 31, 2012 Content info: 299 Pages

Aligning Clinical and Commercial to Meet Payer Demands and Win Reimbursement

Boost your health economics and outcomes research efforts

Marketing approval, once a critical end goal, is now a milestone on the road to brand success - reimbursement is the true objective, especially in today's harsh market access environment. To navigate the challenges that come with lower reimbursement rates, companies pump resources into market access, pricing and pharmacoeconomics.

The process starts with the health economics and outcomes research (HEOR) team. Health economics work fuels market access, and the prominence of HEOR teams increases as companies struggle to establish product value.

As these teams rise in importance, they also face a raft of emerging challenges. Navigating the worlds of medical affairs, clinical development, marketing and strategic planning takes particular skill sets and relationship-building capabilities. Externally, HEOR groups must overcome changing economies and ever-evolving payer needs.

Structure Health Economics Teams to Hit Company Goals

Finding optimal HEOR structure and internal alignment is elusive. Weigh the advantages of different organizational approaches, and see how factors such as reporting lines, leadership and staffing levels position HEOR teams to advance companies toward larger objectives - without losing focus on crucial individual markets.

Benchmark HEOR Budgets and Tasks

Health economics teams balance their time and money across a number of in-house and outsourced activities. Benchmark spending and prioritize responsibilities to focus HEOR teams on tasks with the greatest return.

Overcome Internal and External HEOR Challenges

Coordinating internal stakeholders while addressing the needs of different markets proves challenging for all HEOR groups. Improve team flexibility and plan for the emerging importance of factors such as patient-reported outcomes, risk-sharking, value-based pricing and global economic instability.

key finding

More Companies Are Moving HEOR to Medical Affairs and Away from the Commercial Organization

Health economics and outcomes research is arguably more clinical or medical in nature than other market access-related functions. As a result, some companies separate HEOR from pricing and reimbursement. Many locate HEOR under medical affairs, away from the more commercially oriented pricing and reimbursement functions. Figure E.1 [Figure included in Full Report] shows that 29% of companies now house HEOR under medical affairs. When Cutting Edge Information last surveyed HEOR teams in 2010, this percentage was only 10%.

Proponents of the move to medical affairs argue that medical affairs has a “higher focus on integrity” than commercial teams. This focus allows health economics teams to truly concentrate on the science surrounding the brand, not its commercial promise. Also, it provides a closer link to medical information and publications teams - valuable outlets for HEOR messages.

However, as with any structure, the medical affairs alignment presents challenges for HEOR teams. The largest challenge is that teams located under medical affairs are more academic in nature, researching the data for the data's sake. This tendency can sometimes limit the commercial impact of the HEOR messages. Since the HEOR messages drive the overall market access strategy, not having commercially oriented messages can stunt the brand's revenue stream.

According to the director of health economics at a US biotech company, “It doesn't really matter where you sit because the whole discipline - like everything in the pharma world - is to sell drugs. Whether you sit in marketing or medical affairs, you have to be completely honest in what you do. The payer will see right through you. If you only focus on the data that you like, it's going to come back and hit you in the end. The data is the data, and it doesn't matter which department sponsors it.”

Even so, HEOR's move to medical affairs suggests that for many companies, the ties to medical affairs are stronger than those to commercial. For now, at least, the teams will be more research focused.

Table of Contents
Product Code: PH175

Table of Contents

Chapter 1: Reinforcing the HEOR Team: Organizational Alignment, Structure and Strategic Impact

Chapter Benefits:

  • Learn how to structure your HEOR groups with company goals in mind.
  • See where top-performing companies house HEOR groups and who leads them.
  • Weigh the benefits and drawbacks of various HEOR team structures.
  • Improve communication and coordination between your HEOR groups worldwide to bolster global health economics strategy.
  • Right-size your HEOR team using real-company staffing data.
  • Build the ideal HEOR team by leveraging and diversifying team skills.
  • Strike the right balance in managing in-house versus outsourced activities.
  • Use compensation data to help attract and retain top talent.

Chapter Data

Throughout this chapter, data are broken down by company type (Top 20, Top 50, small pharma, affiliate and device) and by geography (US, European Union/Canada/Australia, and emerging markets).

23 charts focus on health economics team oversight, structure, staffing and compensation:

  • Major function providing oversight of health economics activities
  • Average age of departments handling health economics activities
  • Level of executive overseeing health economics
  • In-house handling of health economics (dedicated department, secondary responsibility of another function, or all HEOR outsourced)
  • Organization of health economics responsibilities (centralized oversight, by therapeutic area or by geography)
  • Number of groups among which companies split health economics activities
  • Specific company example of health economics team structure
  • Average health economics staffing levels, by position (senior management, administration, health outcomes liaisons, pharmacoeconomists)
  • Average compensation levels by HEOR title (department head, management tier 1 and 2, pharmacoeconomists, health outcomes liaisons)

Chapter 2: HEOR Budget Benchmarks, Funding Sources and ROI Measurement

Chapter Benefits

  • Accurately benchmark HEOR budget levels and track spending trends.
  • Examine in-depth breakdowns of HEOR team funding.
  • Track spending by phase.
  • Track spending per brand (via min/max per-brand expenditures).
  • Learn new strategies to win buy-in from key stakeholders.
  • Improve performance measurement by better identifying team strengths and weaknesses.
  • Understand how companies of your size/type calculate ROI.
  • Combine quantitative and qualitative metrics to communicate a full picture of HEOR team value.

Key Metrics

Throughout this chapter, data are broken down by company type (Top 20, Top 50, small pharma, affiliate and medical device) and by geography (US, European Union/Canada/Australia, and emerging markets).

52 charts focus on health economics team spending and return on investment:

Departments funding HEOR

  • Number of different departments funding health economics teams
  • % of budget contributed by different functions
  • Prevalence of multiple sources of health economics funding

HEOR spending

  • Average health economics spending for 2011 and 2012
  • Percentage change in health economics spending from 2011 to 2012
  • Number of brands supported by health economics activities
  • 2012 health economics spending per brand
  • Percentage of health economics spending outsourced
  • Minimum and maximum per brand health economics expenditures

Health economics ROI

  • Companies' self-ratings of health economics strategy effectiveness
  • Prevalence of companies that measure ROI for health economics activities

Chapter 3: Spending Time and Money: Health Economics Studies and Primary Tasks

Chapter Benefits

  • Learn how other health economics teams of your size spend their time and money.
  • Prioritize and streamline HEOR team responsibilities with spending/time allocation benchmarks on 12 key activities.
  • Discover when successful companies begin health economics work - a critical factor in getting a product's desired reimbursement.
  • Understand how HEOR input and interaction with internal clients improves payer relationships and outcomes.
  • Use real-company data to benchmark time and money costs for six major health economics studies.
  • Build outsourcing strategy using outsourcing trends and projections.

Key Metrics

Throughout this chapter, data are broken down by company type (Top 20, Top 50, small pharma, affiliate and medical device) and by geography (US, European Union/Canada/Australia, and emerging markets).

74 charts focus on cost and time allocations for HEOR activities:

  • Phase in which companies begin health economics analysis
  • The prototypical health economics team's annual spending and time allocation
  • Percentage of companies that perform specific health economics activities
  • Percentage of budget dedicated to individual health economics activities
  • The prototypical health economics team's annual spending allocation
  • Percentage of time dedicated to individual health economics activities
  • The prototypical health economics team's annual time allocation
  • Average price and time necessary for different health economics studies
  • Cost-minimization study
  • Cost-effectiveness study
  • Cost-benefit study
  • Cost-utility study
  • Budget impact model
  • Comparative-effectiveness analysis
  • Percentage of health economics teams that plan to outsource in the future
  • Strategic diagram detailing coordination of global and local needs within one vendor

Chapter 4: HEOR Challenges and Trends: Today and Tomorrow

Chapter Benefits

  • Improve teams' ability to adjust to ever-changing payer requests by providing better HEOR data.
  • Implement innovative strategies for solving six of HEOR teams' top internal challenges.
  • Know when to use PROs and risk-sharing agreements - and maximize their effectiveness.
  • Access leading executives' insights on managing global economic trends.

Key Metrics

Throughout this chapter, data are broken down by company type (Top 20, Top 50, small, affiliate and device) and by geography (US, European Union, Canada & Australia, and the emerging markets).

33 charts focus on HEOR team challenges and trends:

  • Ratings of internal challenges HEOR teams face:
  • Overcoming other teams' lack of HEOR knowledge
  • Gaining internal buy-in for HEOR research
  • Getting clinical teams to use HEOR parameters
  • Accessing quality data for HEOR analysis
  • Meeting the price for necessary data
  • Determining credibility of available data
  • Prevalence of patient reported outcomes in HEOR analysis
  • Perceived reliability of patient reported outcomes for HEOR analysis
  • Use of vendors for patient reported outcomes
  • Companies' plans to use risk-sharing agreements to reach market access goals
  • Countries in which companies use and anticipate signing risk-sharing agreements
  • Phase when companies begin to investigate risk-sharing agreements
  • Therapeutic areas that companies believe present the best opportunities for risk-sharing agreements
  • Ratings of the forecasted impact of HEOR trends:
  • US economic instability
  • European economic instability
  • UK's move to value-based pricing
  • Germany's institution of AMNOG
  • Growth of comparative effectiveness

Chapter 5: Company Profiles

Chapter Benefits

  • Benchmark your team directly against 14 other groups.
  • Explore HEOR team operations, company by company.

Key Metrics

69 charts across 14 HEOR team profiles include the following information:

  • Company type, region, age of HEOR group and number of brands supported
  • HEOR team alignment and reporting lines
  • Total team budget and funding contributions by function
  • Headcounts and compensation (salary + bonus)
  • Percentage of the HEOR team's spending dedicated to outsourced activities
  • Expenditures by development phase
  • Average cost and time required to execute 6 major health economics studies
  • Percentage of cost and time required to execute 12 HEOR activities
  • Ratings of 6 key daily operational challenges
  • Ratings for 5 external trends' impact on the HEOR team's operations
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