HEOR: Biopharma's Underappreciated Value Creator
- kenashman
- May 8
- 2 min read
By Rob Abbott 28 Feb 2025
The way ahead for HEOR in biopharma should be built on increasing C-suite visibility and understanding of the value contribution that HEOR makes and demonstrating that a failure to invest in HEOR puts companies at a competitive disadvantage, especially in the face of rising regulatory and payer expectations for evidence.
Over the past year, several global biopharmaceutical firms have substantially reorganized their health economics and outcomes research (HEOR) groups. Specifically, the leaders of the groups have been let go and the balance of the teams have been dispersed into other functions, typically Market Access or Medical Affairs. Corporate reorganizations are nothing new, but the targeted reorganization of HEOR groups comes at a time of significant change in the operational and competitive landscape for biopharma. Regulatory expectations for evidence are both increasing and broadening (clinical, economic, patient-centered), the use of artificial intelligence (AI) and digital tools in healthcare is growing, and there is a palpable push for acceleration in drug development.
At the same time, patients are clamoring for accessible, affordable, and effective drugs. Too many patients cannot afford the drugs or treatments that would enhance their quality of life – or even save their life. Globally, the story is much the same. Populations are aging in many countries and the demand for novel medicines is on the rise. To obtain coverage or reimbursement, companies have to prove that their products both improve on the standard of care and are more cost effective.
Clearing this “fourth hurdle”, as it is often called, in a restrictive access landscape has never been more important, or difficult, for biopharma. The Inflation Reduction Act in the US, the European Union’s HTA regulation and Germany’s SHI regulation are all recent examples of a more stringent regulatory environment with heightened evidentiary expectations. The recent round of layoffs and restructuring of HEOR groups may be particularly ill-timed, because there is truth to the adage that “there is no access without evidence.” HEOR scientists are the primary generators of that evidence.
