HEOR requires executive leaders who have both scientific and managerial acumen.
Ross Maclean, MD
In the last year, there has been a movement within the pharmaceutical industry to consolidate many functions across the research, development, and commercial organizations. Recently, one big push has involved restructuring the health economic and outcomes research (HEOR) function, placing it under either the medical affairs pillar or under market access within the commercial pillar. The stated objective of these movements has been to create a more integrated, cost-effective approach to generate the evidence needed to support marketed products.
In a recent article titled “Big Pharma says ‘Thanks, but No Thanks’ to their own HEOR groups,” Professor Scott Ramsey from University of Washington comments to the importance of HEOR1. He states: “High cost, low value medicine hasn’t disappeared, nor have the health care cost pressures facing individual patients, businesses, and governments. Providers and insurers will still try to ferret out what isn’t necessary and do what they can to mitigate the cost burden of what is necessary in healthcare. As long as the organizations that pay for these products ask for the information that HEOR provides, pharma will be obliged to supply it.”
John Graham, PharmD
Prof Ramsey is not alone. In addition to national-level changes such as the Inflation Reduction Act equipping the Centers for Medicare and Medicaid Services (CMS) with the authority to establish a new price for certain high utilization drugs, two other examples affirm the unrelenting, if not increasing, demand for HEOR evidence:
To be successful, HEOR requires executive leaders who have both scientific and managerial acumen; including a deep understanding of the multiple different methods that the discipline applies to generate evidence, the management skills to navigate complex, matrixed organizations, and the ability to distill complex strategic challenges at disease- and product-level and translate that to inform tangible tactics and value messages that may be delivered by multiple stakeholders in the market. Yet in many instances, the HEOR discipline and corresponding leadership has merged with other functional domains.
Biopharmaceutical companies are taking various approaches in structuring HEOR teams. Figure 1 below depicts advantage and perhaps disadvantages to certain models. For example, of the HEOR/RWE groups and moving the junior scientists into the respective organizations to report directly to potentially less experienced leaders. Other models include creating an evidence generation group within medical affairs or market access made up of junior scientists who are agnostic to therapeutic area and just deliver studies. As with all organizational change there are pros and cons, as illustrated in Figure 1.
Fig.1 Synopsis of the challenges and implications of relocating HEOR functions under Medical or Access
In cases where HEOR fits within medical affairs, the design fosters greater alignment between scientific communications and the medical evidence strategy for the disease. It also addresses the traditional disagreements on who is best positioned to own the medical evidence strategy as well as how to deliver upon that strategy. Finally, it allows companies to decrease the number of senior leaders by designing organizations that have leaders developing a strategy and scientists who will deliver upon the tactical evidence generation.
In cases where HEOR fits within market access, the design fosters single point accountability for product pricing and value demonstration. It provides greater commercial focus on HEOR to identify and generate the economic evidence required to secure and maintain access, and simplifies the balance between pricing, contracting and value demonstration. This approach also provides clear leadership from the market access organization on what the reimbursement strategy will be and all the tactics to achieve reimbursement.
While the medical or access reporting lines have the aforementioned benefits, there are risks and unintended consequences that must be acknowledged:
Recommendations
As these structural changes settle-in, we offer two recommendations
While there are clear benefits to combining the HEOR function into medical or access organizations there is also the potential that it may result in worse outcomes especially in the near-term. Companies who find a good balance of medical affairs-and-HEOR or access-and-HEOR leadership will find a competitive edge in the market.
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