Why Injecting Scientific Thinking with Economics Research is Crucial

Why Injecting Scientific Thinking with Economics Research is Crucial

Before the COVID-19 pandemic captured the full attention of the media, drug pricing dominated headlines. However, COVID’s media distraction has not eliminated the issue of how to effectively manage the pricing of life-altering medications. At the same time, the complexity of day-to-day healthcare decision-making intensifies with innovative treatments with curative potential now a reality. These cutting-edge innovative treatment options, combined with the scrutiny on drug pricing, complicate the value determination process and access to new treatments.

Historically, pharmaceutical companies have focused on proving the safety and efficacy of their products. However, the emergence of the Affordable Care Act and increased scrutiny on drug prices means that they must expand their focus on generating evidence that demonstrates the clinical and economic value of the product so that companies can justify the value of new treatment. While big pharma has incorporated this into their development and commercialization process, smaller clinical stage biotech companies need to start thinking about this much sooner in their development process to justify the price tag, and prove to doctors, payers, and patients why it’s worth the money.

Health economics and outcomes research (HEOR) may offer a guiding light. The synergy of combining the right data (outcomes research) with thoughtful (health) economic analyses based on multiple stakeholder perspectives ensures that even complex healthcare questions around value and pricing can be evaluated rationally. Medical science liaisons (MSLs) at pharmaceutical companies have access to much of this data but are currently limited with whom they can share it with – specifically with payers but not physicians. The good news is that the FDA is starting to open pathways to get health economics information to the decision makers who need this information. In addition, payers are increasingly starting to incorporate evaluation of HEOR data in their decision making process for providing access to new drugs.

Of course, with today’s heightened scrutiny on “Big Pharma” profiting inappropriately on new treatments, the ability to provide real data about how a new drug improves health outcomes is a key to justifying the cost. This is important not only to payers but to physicians, policymakers, and patients. Medical teams will need to shift their mindset from one of pure science to one that considers the full dynamics of healthcare and integrates HEOR information in their analysis and communication.T

his shift in mindset is particularly critical as the U.S. moves to more managed healthcare with more medical groups and integrated delivery networks rather than individual practices. Medical leaders will need to learn how to influence a broad range of different decision-makers in addition to the prescriber. In other words, MSLs will need to become comfortable developing a vocabulary that extends beyond deep science to engage with business executives. Business acumen, in addition to scientific knowledge, will be important characteristics for success and HEOR will likely be as important to the conversation as clinical trial results.

In the next few years, the most successful drug makers will invest in their medical teams and create new roles such as Managed Care MSLs and Health Outcomes MSLs. These teams will understand the science and be able to communicate the true value that justifies appropriate pricing and access decisions. Expect regulators to also continue creating more pathways for evaluating and communicating HEOR information.

Methods to assign value to therapies developed over the past three decades compare the clinical, economic, and humanistic impact of alternative treatments and provide the basis for addressing evolving challenges, including personalized medicine, curative therapies, rare diseases, and aging populations. New methods will need to take a holistic view in terms of time horizon, societal benefit, and opportunity cost. HEOR methods are often the vanguard of healthcare evaluations with dynamic, innovative methods to address value demonstration and market access in the constantly changing environment.

Artificial intelligence (AI) is the next innovation that will drive HEOR and its place in pricing justification and market access decisions. The rise of big data and a focus on AI mean that healthcare data are becoming more abundant and diverse, useful, and able to impact healthcare in real time. However, much of the data content is in unstructured form (e.g., physician notes in electronic medical records), and natural language processing has yet to be widely applied and effective at extracting content. While data mining of administrative claims data and economic modeling are common approaches for generating real world evidence and value justification, the exponential growth of real world data sources have the potential to transform healthcare decision-making. Expertise in AI-driven data mining and real world evidence generation as well as knowledge of traditional clinical and outcomes research methods will be key.

Medical Affairs, as we know it today, is on the cusp of a significant evolution. These teams could prove instrumental in helping companies thrive even in a price-sensitive environment and generate the value justification to ensure patients have access to innovative new medicines. They need the support of regulators but, as important, Medical teams will need add business acumen to their scientific rigor.

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