Health Economics and Outcomes Research (HEOR)

HEOR is a function with a pharmaceutical or life science company that is tasked with generating evidence of the value of a new drug or other intervention for reimbursement and healthcare payers.

HEOR establishes and measures the link between treatment and actual outcomes and therefore provides evidence-based guidance on how to improve care. It takes a broad view of the health outcomes of an intervention including not only clinical trial data and clinical outcomes but also financial considerations and less tangible measures such as quality of life and satisfaction as reported by the patients in surveys or gleaned from electronic health records.

HEOR is used by pharmaceutical companies to understand how healthcare providers prescribe drugs and how these drugs are performing in the real world. This real-word evidence [add link to glossary item Real-world data/Real-world evidence] is ultimately used to improve patient care.

What is HEOR data used for?

HEOR data is used in a number of ways.

  • Regulating agencies use HEOR data to establish reimbursement structures and to identify successful interventions
  • HEOR can guide healthcare coverage and access decisions
  • HEOR data can help close the gap between clinical trials results and real-world health outcomes
  • HEOR can contribute to identifying interventions that are most effective for specific populations of patients
  • HEOR helps pharmaceutical companies communicate the value of their innovations to stakeholders such as physicians, payers and patients.

With precision medicine [add link to glossary item precision medicine] and value-based care playing an increasingly important role, HEOR is moving from a support function to a central role in pharmaceutical companies. HEOR can inform decision making at many stages in the product life cycle from R&D to pricing, market access, strategic planning to sales strategy and lifecycle management [add link to glossary item lifecycle management].

The increasing importance of precision medicine and real-world data and with that health economics is also impacting medical affairs professionals, especially field medical. Medical science liaisons, for example, need to have a working knowledge of HEOR and have to be able to have meaningful conversations with healthcare providers about health economic concepts.

FDA Advisory Committees
Journal Editorial Board