Building World-Class HEOR Teams (PH211)

Creating Convincing Value Propositions for Payers
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Published 2015
169 Pages
500+ Metrics
118 Charts and Diagrams

Improve Reimbursement Position with Compelling HEOR Data

Robust health economics data and convincing product value stories that sufficiently address payer needs are the new foundation of product success. Without a strong pharmacoeconomic case, a product’s reimbursement profile will be weakened, and peak sales performance will suffer. This study explores how companies identify payer needs through market research and then meet those requirements with targeted studies. The report’s benchmark data show how much time and money companies are spending on their health economics studies. Furthermore, it guides companies in making sure that HEOR resources are being allocated wisely as well as ensuring that the studies produce the desired outcomes.

Dedicated HEOR teams provide the advantage of coordinating both prospective and retrospective HEOR activities. The report’s case studies of real companies’ HEOR organizational structures illustrate how to most effectively manage pharmacoeconomic activities. Metrics include total HEOR budgets, sources of funding for HEOR activities, and funding allocation between compounds in development and marketed brands.

HEOR teams can use the insights in this report to develop winning cases that demonstrate product need to payers. Use the benchmarks in this study to align your team with product goals, allocate the team’s resources and focus on pharmacoeconomic studies that produce the desired outcomes.

 

Key Questions That This Study Answers

  1. How can my company organize our HEOR teams to maximize their performance? How do dedicated teams enhance HEOR activities and better address payers’ needs?
  2. How much should companies allocate for HEOR spending per product and per development phase?
  3. How many FTEs are on HEOR teams per position? What compensation levels are needed to compete for and attain top talent?
  4. Which HEOR studies — and how many — are needed for superior product support? How much do these studies typically cost and how long do they take?
  5. How do companies use HEOR to balance short-term approval needs with long-term market access goals?
  6. Which key performance indicators are most effective for measuring HEOR value? What strategies do teams at leading companies use to demonstrate the importance of health economics research?
  7. How can teams best communicate and ensure HEOR group involvement throughout product development? How does early HEOR involvement positively impact strategic planning?
  8. How can companies prioritize their HEOR spending and activities to best impact payers’ pricing and formulary decisions?
  9. What are the advantages of increasing health economics liaison (HOL) teams to manage payers’ requests for information?
  10. What strategies do top companies use to coordinate efforts between field forces as they deliver information to payers?

 

Top Reasons to Read This Report

Balance short-term approval needs with long-term market access and payer needs: Teams face challenges in communicating the importance of HEOR prior to launch, and resource prioritization is an obstacle. Botched launches in major markets can ripple through the entire market access budget. Building World-Class HEOR Teams examines how to structure and resource HEOR groups effectively. Dedicated teams provide the advantage of coordinating both prospective and retrospective HEOR activities. The study also includes case studies of real-company HEOR organizational structures; these examples also show how to most effectively manage vendors for HEOR activities. Metrics include total HEOR budgets, sources of funding for HEOR activities, and funding allocation between compounds in development and marketed brands.

Use the right HEOR studies to build understanding of what is driving patient needs — and to address payer requirements: Getting an early start on developing the health economics plan for a product is crucial in meeting payer needs. Identifying comparators and understanding the competitive landscape at launch can be difficult in early phases — but groups are still able to conduct research that lays the groundwork for a product’s future success on the market. Once launch approaches and HEOR involvement reaches its peak, companies should know how many studies are required to support a product effectively, as well as the potential budgetary pressures that come with addressing payer concerns. This report guides companies in making critical decisions and planning surrounding HEOR studies and their costs. Benchmarks include how many health economics studies are conducted and their cost and duration.

Plan to increase health outcomes liaison (HOL) headcounts as payers demand more detailed information: The study examines HEOR team staffing as well as the activities and strategies that impact their operations. Research highlights staffing numbers across central global groups and affiliate-level HEOR teams as well as compensation structure for individual team positions. Interviewed executives explain the rising need, and increased role, for health outcomes liaisons (HOLs) to discuss pharmacoeconomic data with payers as part of a compelling value story. Other data demonstrate the core activities driving strategy across HEOR groups as well as perceived impact of health economics and outcomes data for specific payers’ formulary decisions. Altogether, the information in this report helps companies build skilled, focused HEOR teams capable of adjusting to payer needs throughout the product lifecycle.

Health Economics and Outcomes Research Metrics

 

Chapter 1: Fortifying HEOR Impact on Product Support through Structure and Spending

 
Major Takeaways

  • Dedicated departments bring tangible long-term benefits to HEOR organizations.
  • Maximize HEOR group access to data production and payer relationships to make sure that payer needs are addressed.
  • Tailor HEOR team leadership to group size and portfolio responsibility.
  • Balance short-term approval needs with long-term market access and payer needs.

 
Chapter Data
This chapter contains 47 charts. Data are often broken down by company size/type (top 10, top 50, top 10 and top 50 affiliate, small and medical device) and group type/focus of responsibility (central global groups, US, EU, Canada, and emerging markets, country-level affiliates).

HEOR Team Structure

  • Diagrams comparing examples of HEOR structures and processes (US country-level affiliate, EU country-level affiliate, and small-global level HEOR groups)
  • Types of HEOR group structures
  • Function overseeing HEOR activities
  • Level of executive managing HEOR activities

HEOR Funding, Spending and Budgets

  • HEOR spending for 2013–15
  • Typical funding sources, by company size/type and HEOR group region of responsibility
  • Funding provided for HEOR by specific sources (e.g., dedicated budget, medical affairs, market access, etc.)
  • HEOR spending on compounds in development and marketed brands
  • Average percentage change in HEOR budget (2013–2014, 2014–2015)
  • Prioritization of HEOR spending on specific activities, divided into four categories — core, supplemental, minor and no spending.
  • Percentage of spending on primary HEOR activities for central global groups, top 10 affiliate groups, top 50 affiliate groups, and US/EU country-level affiliates

HEOR Challenges and Performance Measurement

  • Breakdown of challenges facing HEOR groups
  • Percentage of companies measuring performance indicators and ROI
  • Key performance indicators tracked by HEOR groups




Chapter 2: Staffing HEOR Teams for Strategic Operations

 
Major Takeaways

  • Begin HEOR support early during product development — as soon as Phase 3 — and shift focus to incorporate real-world data as brands mature.
  • Plan to increase health outcomes liaison (HOL) headcounts as payers demand more detailed information.
  • Expect higher HEOR impact when working with EU payers: IQWIG, NICE and Assurance Maladie.

 
Chapter Data
This chapter contains 28 charts. Data are often broken down by company size/type (top 10, top 50, top 10 and top 50 affiliate, small and medical device) and group type/focus of responsibility (central global groups, US, EU, Canada, and emerging markets, country-level affiliates).

HEOR Team Staffing

  • Infographic highlighting key points of assembling appropriate staffing for HEOR activities among central global HEOR teams and country-level affiliates
  • Number of FTEs on HEOR team, by group type and region, for key roles:
    1. Senior management
    2. HEOR analysts
    3. Health outcomes liaisons (HOLs)
    4. Administrative
  • Average salary for HEOR team, by group type and region, for the following positions:
    1. Department head
    2. Management tiers 1 and 2
    3. HEOR analyst
    4. HOL (entry-level and with 2 years of experience)

HEOR Activities and Their Impact on Payers

  • Prioritization of 14 specific HEOR activities into four (4) categories: core, supplemental, minor, and not performed
  • Percentage of time spent on major HEOR activities, by group type and region
  • Ratings of HEOR’s perceived impact on payers’ pricing decisions and formulary decisions (by group type)




Chapter 3: Supporting Products with Early Planning and Targeted HEOR Studies

 
Major Takeaways

  • Benchmark HEOR study costs and duration.
  • Use HEOR to build understanding of what is driving payer needs.
  • Constantly look for avenues to conduct HEOR or improve outcomes evidence via academic or new retrospective databases.
  • When looking to add HEOR endpoints to trials, reduce patient burden to facilitate clinical buy-in.

 
Chapter Data
This chapter contains 41 charts. Data are often broken down by company size/type (top 10, top 50, top 10 and top 50 affiliates, small and medical device) and group type/focus of responsibility (central global groups, US, EU, Canada, and emerging markets, country-level affiliates).

  • Infographic showing key benchmarks for HEOR budget impact studies and cost-effectiveness studies
  • Start of HEOR involvement, by development stage, for central global teams and country-level affiliate teams
  • Minimum and maximum HEOR expenditure per product during development (Phase 1, Phase 2, Phase 3, submission and registration, and launch) by company
  • Average minimum and maximum number of HEOR studies conducted in support of a single product, by study type
  • Average cost for the following study types among central global groups and country-level affiliates:
    • Cost minimization
    • Cost effectiveness
    • Cost utility
    • Budget impact
    • Comparative effectiveness
  • Range and actual duration of HEOR studies among central global groups and country-level affiliates, by study type
  • Average cost of HEOR studies (cost effectiveness, budget impact, cost minimization, cost utility, comparative effectiveness), by company
  • Minimum and maximum number of HEOR studies (cost effectiveness, budget impact, cost minimization, cost utility, comparative effectiveness) in support of a single product, by company
  • Range of HEOR study costs among medical device groups, by company type
  • Range of HEOR study duration among medical device groups, by study type




Chapter 4: Profiling HEOR Group Structure, Spending and Activities

 
Major Takeaways

  • Quickly benchmark and compare key data — HEOR staffing, spending, activities, and studies — against HEOR groups with similar characteristics.
  • Use these data to solidify HEOR strategic planning and to help justify requests for additional support and resources.

 
Chapter Data
24 charts detailing 6 HEOR group profiles. Consisting of infographics, each profile contains information on the HEOR group’s structure, staffing and spending, and studies conducted.

HEOR Structure and Spending

  • Company and HEOR group background: company type, group location, and group’s level of responsibility
  • Product portfolio: number of compounds in development and number of marketed brands, as well as the amount spent for compounds and brands.
  • Budget: HEOR spending in 2014, funding sources and cost-drivers
  • Leadership/reporting relationships: Level of executive leading HEOR and function with oversight of HEOR activities

Staffing and Activities

  • HEOR staff compensation
  • Number of FTEs, by position
  • Percentage of time spent on 14 HEOR activities

Health Economics Studies and Expenditures

  • Data show which study type the HEOR group conducted and the number of studies
  • Typical cost and duration of each study
  • Maximum expenditure per development stage

Sample Content from Building World-Class HEOR Teams



The following excerpt is from Chapter 2, “Staffing HEOR Teams for Strategic Operations.”

Prepare to Meet Payer Demands Through Expanding Field Forces

Health economics teams typically have the human resources to product compelling data, but disseminating this information to payers can be a challenge. HEOR team members have the best understanding of these data; however, MSLs and sales reps have higher levels of contact with key accounts. To ensure that key payers receive the best possible presentations of HE data, many teams — especially those small HEOR groups — are looking to expand their HOL teams.

A Company D vice president noted the need for HOLs on his country-level team. While the Top 50 company’s US-based group is small now, the vice president hopes to add two to three outcomes liaisons to the US-based HEOR team. Currently, the HEOR group looks to MSLs to step into the outcomes liaison role when possible.

Company E also hopes to add to its HEOR resources in the next year. “You can always do more with more people,” explained one Company E HEOR director. Company E currently relies on its HEOR director and a senior scientist to make presentations in the field. The director hopes to add HOLs to take on this responsibility. “I think over the next few years, we’ll see a continued use of well-trained HOLs to present technically difficult information and distill it to make a good value argument — especially for managed markets and national accounts.” As Company E prepares to launch a new product, the HEOR director hopes that HOLs are on the horizon. Ideally, the team would take on 4 new FTEs to divide the US into quadrants. When the company is ready to hire HOLs, the director plans to look for individuals with high levels of clinical and financial knowledge, as well as some type of economic training.

Matching HOL headcounts to group workload can be a daunting challenge for teams hoping to expand. While budgets are certainly one constraint, HEOR teams must consider other factors as well. An interviewed senior director at Company A, a Top 10 biotech firm, explained that product portfolio and customer base played a large factor in establishing their high HOL headcount. The executive noted, “If you take the breadth of our portfolio and the knowledge depth of what’s involved and you take the customers we have to service, our HOL team is not large; it’s right-sized. Team size depends on the dedicated customer base you’re going after.”

The director also noted that, in some companies, the HOL role is taken on by MSLs. However, in his company, which has a broad portfolio covering large populations, specialized field forces are better equipped to work with their 1,000-plus payer accounts.

Health Economics and Outcomes Research Report Sample

The following excerpt is a key finding taken from the full report's Executive Summary.

More Companies Are Moving HEOR to Medical Affairs and Away from the Commercial Organization

Health economics and outcomes research is arguably more clinical or medical in nature than other market access-related functions. As a result, some companies separate HEOR from pricing and reimbursement. Many locate HEOR under medical affairs, away from the more commercially oriented pricing and reimbursement functions. Figure E.1 [Figure included in Full Report] shows that 29% of companies now house HEOR under medical affairs. When Cutting Edge Information last surveyed HEOR teams in 2010, this percentage was only 10%.

Proponents of the move to medical affairs argue that medical affairs has a “higher focus on integrity” than commercial teams. This focus allows health economics teams to truly concentrate on the science surrounding the brand, not its commercial promise. Also, it provides a closer link to medical information and publications teams — valuable outlets for HEOR messages.

However, as with any structure, the medical affairs alignment presents challenges for HEOR teams. The largest challenge is that teams located under medical affairs are more academic in nature, researching the data for the data’s sake. This tendency can sometimes limit the commercial impact of the HEOR messages. Since the HEOR messages drive the overall market access strategy, not having commercially oriented messages can stunt the brand’s revenue stream.

According to the director of health economics at a US biotech company, “It doesn’t really matter where you sit because the whole discipline — like everything in the pharma world — is to sell drugs. Whether you sit in marketing or medical affairs, you have to be completely honest in what you do. The payer will see right through you. If you only focus on the data that you like, it’s going to come back and hit you in the end. The data is the data, and it doesn’t matter which department sponsors it.”

Even so, HEOR’s move to medical affairs suggests that for many companies, the ties to medical affairs are stronger than those to commercial. For now, at least, the teams will be more research focused.