In the rapidly evolving biotech landscape, health economics and outcomes research (HEOR) is emerging as a critical tool for shaping clinical development, investment decisions, and commercial strategies. Rob Abbott, CEO of the International Society for Pharmacoeconomics and Outcomes Research (ISPOR), recently shared insights on how HEOR is becoming increasingly relevant for biotech founders, executives, and investors.
HEOR is often perceived as a post-approval exercise focused on pricing and reimbursement. However, Abbott challenges this notion, emphasizing that evidence generation, economic modeling, and value strategy can significantly influence clinical development, inform investment decisions, and enhance the commercial potential of new therapies. This shift in perspective is crucial for biotech companies aiming to navigate the complex healthcare ecosystem effectively.
HEOR as a Strategic Partner in Biotech Development
For biotech CEOs and executives, understanding the value of HEOR can be a game-changer. Abbott explains that HEOR is not just a late-stage checklist item but a commercial compass that answers critical questions about market value long before a drug’s launch. By measuring effectiveness, cost, and patient quality of life, HEOR provides a comprehensive view of a drug’s worth.
Early economic modeling and integrating patient-reported outcomes into clinical trials are two key HEOR activities that Abbott recommends for development-stage companies. These activities help define a product’s value proposition and secure necessary data before pivotal trials begin. For instance, cost-of-illness and burden-of-disease models can demonstrate real commercial traction to investors and provide payers with proof of value beyond clinical efficacy.
The Investor’s Perspective on HEOR
Investors play a pivotal role in the biotech ecosystem, and their attention to reimbursement, economic value, and policy is paramount. Abbott suggests that investors should focus on coding and coverage pathways, health economic data, and value-based alignment, as these factors dictate commercial survival more than pure scientific novelty.
To gauge the commercial potential of a biotech company, investors can ask management teams about operational stress points, the real cost of new technologies, and structural vulnerabilities. Questions such as whether current growth relies on repeatable processes or founder heroics, and how the company would handle competition, can provide valuable insights. Additionally, understanding the assumptions behind internal forecasting models can reveal potential risks and opportunities.
ISPOR’s Healthcare Investment Summit: Bridging the Gap
To foster a deeper understanding of the intersection between financial capital and health economics, ISPOR is hosting the Healthcare Investment Summit in. This event aims to bridge the gap between investors, drug developers, and policymakers, facilitating discussions on market access, pricing policy, and evidence challenges.
The summit is designed for healthcare investors, drug developers, and policy leaders, including venture capitalists, startup founders, financial backers, pharma and biotech leaders, and value strategists. By bringing these stakeholders together, ISPOR hopes to spark conversations that typically do not occur, ultimately driving innovation and improving healthcare outcomes.
Abbott’s vision for the summit is to create a focused, actionable program that addresses the specific needs of investors and biotech executives. The event will feature panels and discussions on topics such as the metrics behind the money, the health economic playbook for builders and backers, and the role of HEOR in demonstrating value. This initiative underscores ISPOR’s commitment to making healthcare more accessible, effective, efficient, and affordable for everyone.
