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Health economics and outcomes research: Biopharma and the shift to value-based care

As healthcare moves toward the shared goal of improving patient care more economically, stakeholders across the healthcare ecosystem are increasingly aligned with the principles of value-based care. Value-based care is a payment model in which healthcare providers are paid for their treatments’ performance and patient outcomes, as opposed to the traditional fee-for-service payment model, in which payments are based on the quantity of services provided rather than the quality of those services.

Value-based care offers tangible benefits to every stakeholder in the healthcare environment, from patients, who benefit from improved outcomes at lower costs; to providers, who can deliver care more efficiently; and to society, which benefits from reduced healthcare spending and better overall health. The shift to value-based care is particularly important in biopharma, which is pivotal in the American healthcare system’s transformation. Can the biopharma industry also find value in healthcare’s shift to value-based care?

Yes—but only by embracing value-based care’s ongoing changes. Of the changes sparked by value-based care, perhaps the most valuable is for biopharma to support the use of health economics and outcomes research (HEOR) to better understand a product’s value.

Evaluating patient outcomes must go beyond basic clinical trial data

In the past decade, selecting a patient’s “best” treatment option has become increasingly complex. Clinical trial data on treatment efficacies, side effects, and so on are often insufficient to support treatment decisions. That’s because the “best” decision can be impacted by a wide range of other factors, such as the treatment’s cost and benefits that may only be experienced by the patient.

HEOR is a research area that has evolved to help with this type of decision. HEOR originated as a combination of 2 separate fields:

  • Health economics: Research focused on determining the value of outcomes resulting from medical interventions while also evaluating broader issues such as the overall healthcare market and available healthcare funding
  • Outcomes: Research focused on the results of specific medical interventions, as observed by actual patients

HEOR data differ from clinical trial data because they are based on the real-world clinical, health, and economic issues encountered by patients and healthcare providers. HEOR research addresses variables such as patient-reported quality of life and overall satisfaction with treatment; as a result, HEOR studies benefit patients by generating more patient-centered data than that produced by clinical trials.

HEOR provides a vital tool for healthcare providers because it enables them to rationally evaluate complex questions about patient healthcare and treatment. At the same time, HEOR enables biopharmaceutical companies to present a broader view of their product’s value.

Prescription drug pricing must align with patient outcomes

HEOR is also a vital tool for biopharma because it provides a way to assess the value of prescribed medications.

Prescription medication pricing has recently come under a great deal of public scrutiny in the U.S. Spending on retail prescription drugs has increased sharply over the past several decades. Recent survey results show that more than 1 in every 4 U.S. adults is having difficulty affording prescription medications. The recently released “International Prescription Drug Price Comparisons” report reveals that, in 2022, U.S. prescription drugs cost 2.78 times as much as in the 33 high-income countries used for comparison. Or, put another way, prescription drugs cost 36% as much in these other countries as in the U.S.

As value-based care requires prescription drug pricing to align with patient outcomes, there is a rapidly growing need for life science organizations to implement value-based contracts or risk being left behind. Every successful drug launch requires companies to secure payment; under VBC, payment requires supporting evidence in the form of clinical, economic, and health outcomes data, including information on patients’ quality of life.

Gathering HEOR data

Healthcare data are becoming increasingly abundant and diverse, much of it in an unstructured format, such as the physicians’ notes section of electronic health records (EHRs). Accessing this data may seem an insurmountable obstacle, but Veradigm has developed tools allowing real-world data to be extracted from free-text fields in their EHR. This makes free-text data available to help with treatment decision-making, medical research, monitoring the quality of patient care, and more.

The Veradigm Network enables biopharma, as well as other key stakeholders, to unlock a product’s value in ways that were previously unattainable. Veradigm’s portfolio of connected solutions can give you access to de-identified ambulatory EHR data and insights and other data sources beyond clinical trials. They can help you discover timely, actionable, real-world evidence to demonstrate how your product can benefit appropriate patient populations—evidence that is crucial in today’s new world of value-based care.