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Health Economics and Outcomes Research

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What is Health Economics and Outcomes Research?

Over the last few decades, the field of health economics and outcomes research (HEOR) has emerged to fill a perceptible knowledge gap in the healthcare field. 

While clinical trials provide a robust “gold standard” for data on potential medicines and therapies, there has been an absence of real-world data about how medical treatments work and remain effective in the real-world setting. Amidst discussions between consumers, payers, healthcare providers, and pharmaceutical companies, health economics outcomes research has evolved as the trusted discipline to fill this gap. 

With HEOR data, regulating agencies are evolving their viewpoints to value and even expect this patient-centered data to inform their discussions and decisions, rather than relying on clinical trials alone.

HEOR ensures that the most reliable real-world evidence from healthcare consumers is used to select healthcare treatment options. With vast access to metadata on all aspects of healthcare, the HEOR discipline aims to extract the most relevant data to evaluate probing questions about healthcare, values, and decision-making. 

Beyond drug efficacy, HEOR explores how medication and therapies affect the lives of patients -including the cost burden of treatment, cost benefits, and impact on quality of life. HEOR can help bring to light the differentiation of and value differences between treatment options. 

About HEOR

HEOR studies harvest data from sources such as medical records, insurance claims, and patient surveys in order to explain how these medicines are performing across the globe. 

ISPOR provides the following answers to these basic questions about HEOR:

What Is Health Economics?

Health economics focuses on measuring and valuing the outcomes of healthcare interventions.

What Is Outcomes Research?

Outcomes research comprises a set of scientific disciplines that evaluate the effect of healthcare interventions on patients.

What is HEOR?

Health economics and outcomes research (HEOR) is the confluence of two fields that work together to provide powerful data and insights for healthcare decision-makers. HEOR scientists and analysts provide scientific research using real-world data, analytic tools, economic models, cost-benefit analysis, and other proven methodologies.

What questions does Health Economics Outcomes Research answer?

HEOR uses real-world data to provide answers to questions such as:

  • What is the ongoing efficacy, safety, and overall benefit of this treatment?
  • How does this treatment compare with its competitors?
  • What is the cost burden to the consumer?
  • What are the short and long-term improvements to patients’ quality of life? For example, on measures such as the Quality of Life Scale (QOLS)
  • What is the economic value of this treatment?
  • How does this treatment impact health outcomes? 

What is HEOR data used for?

As detailed by the NIH, HEOR data is used to help healthcare payers determine if treatments work in the populations they serve, and how much of the drug or treatment cost should be reimbursed by the healthcare system. 

HEOR data may be used to:

  • Promote the expansion of a label claim with the FDA.
  • Create a Health Technology Assessment to provide health professionals, payers, and policymakers with information on the values and benefits of a given treatment. 
  • Generate data to fill an evidence gap to inform the marketing of a product.
  • Provide a longitudinal analysis, offering a deeper probe into predictors of diseases and other more complex analyses of disease trends. 

What does HEOR research do?

HEOR includes the following types of research studies:

  • Cost-effectiveness analysis
  • Cost burden
  • Economic models
  • Evidence generation planning
  • Clinical/claims database analyses
  • Retrospective chart reviews
  • Patient-centered outcomes research
  • Systematic literature review

Who are the collaborative players that work within HEOR?

Collaborators include healthcare providers, payers, pharmaceutical companies, pharmaceutical manufacturers, medical device manufacturers, regulators, nonprofit membership organizations, healthcare professionals, patients, and caregivers. 

What is Real World Evidence in HEOR?

Real-world evidence in HEOR involves using real-world data to scientifically evaluate the effectiveness of treatments among patient users. 

Whereas in the recent past, clinical trial data has been used to evaluate approval of treatment, HEOR as a discipline has introduced robust research and modeling tools to the healthcare landscape. The US Food and Drug Administration (FDA) now boasts that “Real-world data (RWD) and real-world evidence (RWE) are playing an increasing role in health care decisions” and the FDA uses RWD and RWE to monitor postmarket safety and adverse events along with making regulatory decisions. 

What is Patient-Centered Outcomes Research? 

HEOR utilizes patient-centered outcomes research to capture qualitative data about how drugs are working in the lives of their users. 

  • Patient-reported outcomes (PRO) include the status of a patient’s health condition or behavior that comes directly from the patient. These include patients’ reports of their health and experience with care.
  • Patient-reported outcomes measures (PROM) are quality measures derived from outcomes reported by patients. Instruments to collect them include surveys and questionnaires, and can be collected through mobile apps or other devices.  
  • Real-world evidence: Now that pharmaceutical regulators such as the US FDA have invited the use of real-world evidence into discussions about coverage decisions, the role of HEOR has been up-leveled. With the passage of the 21st Century Cures Act (2016), real-world data can be used to support the approval of new drug indications. HEOR departments now have an increasingly important role to play in post-market coverage decisions and FDA label expansion.
  • Evolving technology to better capture data: The rapid proliferation of technology (fit bits, wearables, and other devices) to capture health data has transformed HEOR. The ability to accurately capture copious amounts of data has given HEOR scientists the leverage to ask probing questions to inform pharma drug development. Data can be harvested and analyzed to inform the design of a clinical trial or to support market access strategies for an existing treatment. 
  • Patient-centered outcomes research: Regulators have also welcomed the use of data incorporating the “patient voice” where patients and caregivers can share their symptoms, struggles, improvements, and unique experiences to be used in HEOR studies. HEOR scientists, healthcare professionals, and other industry experts create Patient-Reported Outcomes (PRO) tools that can be used to measure health-related quality of life.  
  • Other trends include:
    • Value assessment
    • Health equity: Addressing disparities in healthcare
    • Healthcare financing: Funding future health technologies
    • Patient engagement
    • Drug and healthcare pricing
    • Public Health: Focusing on key priorities
    • Health Technology Assessment: Supporting cross-country HTA cooperation
    • Health Data: Addressing infrastructure and interoperability
    • Artificial Intelligence: Leveraging AI and advanced analytics

Suggested video to embed on real-world evidence (we should make our own)

What are evidence gaps and what is evidence generation in HEOR? 

Evidence gaps are areas where a pharmaceutical company needs additional analysis to provide evidence for the need for a new drug. An evidence gap analysis can take place before product launch and continue to be a useful tool to support the ongoing success of that asset.

The evidence generation plan is then developed to address this gap analysis and uses HEOR studies, analytics, and planned communications to fill evidence gaps. 

What is Value Assessment in HEOR?

Value assessment helps to define the value of treatment beyond a traditional cost assessment. Value assessments in HEOR can include the patient-reported outcomes and how patients would value the benefits of a given treatment. Value assessment can also include the perspective of other groups such as healthcare providers, payers, caregivers, or other stakeholders. Value assessment also can take into consideration cost per quality-adjusted life-year (QALY) along with cost-effectiveness analyses (CEA). 

HEOR and the Increased Volume of Health Data

The HEOR discipline is racing to keep up with the vast amount of health data that is being produced globally. According to RBC Capital Markets, about 30% of the world’s data is being generated by the healthcare industry. These experts say that by 2025, the compound annual growth rate of data for healthcare will reach 36%. HEOR seeks to harvest and utilize enormous amounts of data– to make it usable by the public, by payers and healthcare providers, and to make these analyses relevant to the healthcare discussions. 


While clinical trials provide initial evidence to provide efficacy and safety of a treatment, with increasing access to treatment options and increasing availability to real-time data, healthcare professionals and payers are now expecting more. The industry is also growing and evolving rapidly. According to Expert Market Report’s latest report, ‘Global Health Economics and Outcomes Research (HEOR) Market Report and Forecast 2021-2026’, the global health economics and outcomes research (HEOR) industry attained a value of USD $1.23 billion in 2020. The market is further expected to grow in the forecast period of 2021-2026 at a compound annual growth rate (CAGR) of 12.5% to reach USD $2.46 billion by 2026.

What is Health Technology Assessment (HTA)?

Health Technology Assessment (HTA) is a tool to aid reimbursement decisions and discuss how the pricing of health interventions compares to the benefits that these treatments provide to patients. The HTA process provides a climate in which HEOR can utilize all of its tools to illustrate treatment value. These tools can highlight the treatment’s value to society, to the health of patients, to the economics of an individual, or to a community. 

Patient-Reported Outcomes (PRO) data can highlight personal values and experiences of patients that had previously been neglected or deemed “unmeasurable.”

How is Artificial Intelligence (AI) used in HEOR?

HEOR scientists are constantly looking at ways to utilize artificial intelligence (AI) in research. HEOR studies utilize real-world data, and AI can be used to improve how data is collected, harvested, and utilized for HEOR studies. This can help capture patient-reported outcomes and can also be used to predict possible outcomes in treatments. 

How does HEOR fit in and inform on health care delivery?

HEOR ensures that when healthcare decisions are made, decision-makers (i.e., payers, healthcare providers, regulators, physicians, and other collaborators) take into consideration the different elements of “value” that together illustrate the complete benefit of the drug. 

Value Flower 1024
HEOR Value Flower

The value flower has emerged as a visual that references these values that HEOR recognizes including:

  • equity, 
  • quality-adjusted life-years (QALYs), 
  • net costs, 
  • productivity, 
  • family spillovers, 
  • the value of knowing, 
  • insurance value: financial & health, 
  • fear of contagion and disease, 
  • the severity of disease, 
  • the value of hope, 
  • real option-value, and 
  • scientific spillovers. 

HEOR and Market Access

HEOR as a discipline differs from Market Access, even though these roles can work together in pharmaceutical companies on cross-functional teams. HEOR is concerned with illustrating the value of a given treatment or therapy to help determine drug pricing. 

Market access, on the other hand, works to ensure all patients that can get access to appropriate therapies, do gain access, and at the correct price. Research firms with expertise in market access can translate study findings into credible real-world evidence that directly supports specific marketing messages. This work requires both scholarly analysis and communications expertise and can result in peer-reviewed publications to facilitate appropriate product positioning and update. 

What is the future of HEOR?

HEOR as a field has greatly evolved and matured as it has proven its ability to utilize data – data to transform the healthcare landscape and decision-making process. As tools to capture data improve and become more precise, and as the volume of metadata increases, the field of HEOR is primed for ever greater involvement and leadership in this process. 

HEOR must rise to the challenge to keep up with the formidable speed at which health-related data is expanding. “Real-world evidence” and “real-world data” in “real-time” are a constant focal point for HEOR research. Making the data meaningful and relevant is the intent. And propagating study designs that integrate the patient voice is at the forefront of this growth.

The challenges and possibilities of using data to transform the healthcare landscape are central to the evolution of HEOR.

What are career opportunities in HEOR? 

HEOR is a rapidly growing field with a variety of career paths and positions within the discipline. HEOR careers often require scientific and technical background – and may require a doctorate in health economics, a Doctor of Pharmacy degree (PharmD), Master’s degree in Statistics or Mathematics, other degrees in clinical research, or other programs in cost-benefit analysis or healthcare analytics. Some pharmaceutical companies and research firms offer internship and fellowship opportunities, often open to upcoming graduates of HEOR/PharmD programs.