The rising costs of prescription drugs and healthcare delivery is impacting the way the pharmaceutical industry brings new medicines to market. Today, key healthcare stakeholders from the, payer, provider, accountable care organization (ACO), pharmacy benefit manager (PBM), and patient communities are playing an increased role in determining the market access strategies for new drugs.
Concerned with a myriad of issues, stakeholders are demanding more data, as well as strategic insights into drugs’ cost-effectiveness and overall value. Patients’ preferences are also becoming increasingly prominent in evaluations of drug value and in product differentiation and utilization.
HEOR: Growth Beyond Big Pharma
To develop the robust value story that will empower their drug’s market access and commercialization goals, a growing number of early stage (Phase II-III) life sciences companies are building their own in-house expertise in Health Economics and Outcomes Research (HEOR).
HEOR, which establishes the efficacy and cost efficiency of a product or service and compares it to other interventions, has been a discipline historically embraced by big pharma, who have the resources to invest in this function internally. But the changing landscape in the healthcare market is driving an increased urgency among small and mid-sized biopharma companies to implement HEOR and market access functions to craft crucial health economic and value messages.
Building Competitive Advantage Before Product Launch
Smaller and mid-sized companies, in the past, would often outsource this work– waiting until after phase 3 clinical results before they invested in HEOR/ and market access internally, to develop value assessments for their new therapies. This later stage approach to HEOR implementation can undermine the success of product launches and commercialization efforts.
To adapt to the dynamics of the new healthcare environment, more and more early stage companies (Phase II-III) are changing their business models to recruit and hire subject matter experts and begin HEOR and market access planning much earlier in the R&D cycle. By pursuing this best practice approach, these companies can gain a significant competitive advantage that will better prepare them for launch:
- With an HEOR function in place earlier in drug development, phase 3 trials can be designed with input from key stakeholders and market access challenges in mind, enabling evidence of drug value to be available at the time of launch.
- Clinical and commercialization efforts can also be carefully coordinated and harmonized to meet the needs of an increasingly complex stakeholder mix to maximize ROI and optimize commercial success.
As an executive recruiter, we have had a front row seat to the HEOR and market access revolution, helping pharma, biotech, device and diagnostic companies – big and small – find the talented leaders to manage this critical function at their organization. For early stage (Phase II-III) organizations, HEOR can be a brave new world that involves balancing both clinical and economic value propositions in product development and commercialization. By making the leap and embracing the value of HEOR and market access, companies will position themselves and their breakthrough therapies for greater success in today’s rapidly changing marketplace.
About the Author:
Scott Kabo is a Client Partner and co-founder of the HEOR and Market Access executive recruiting practice at Klein Hersh International. He has a unique level of market insight and helped numerous organizations build out their HEOR/Access functions during his 13-year tenure at Klein Hersh. Scott and his colleagues recruit and place 40-50 HEOR leaders annually.