Global Market Outlook on HEOR Services

  • The HEOR market is growing at a reasonable pace, as the level of outsourcing is high in this category. The market is seen to be heavily consolidating with newer players, like private equity and data analytics company coming into HEOR space. The industry is also witnessing regulations, which require greater real-world evidence and outcome data, which is resulting in the entry of disruptive innovations, like big-data analytics, m-health, bioinformatics, and other patient intelligence technologies
  • Increasing requirement of evidence-based approach as well as increasing demand for outcomes research is fuelled by the increased need for Real-world Evidence (RWE) to demonstrate the value of the drug, driven by regulatory/pricing authorities

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  • Increase in the number of drugs in large pharma product pipeline and requirement for orphan drugs to target the unmet medical needs of patients are the key factors increasing the demand to study the market for potential and effective pricing of the product
  • The market is expected to grow further, mainly due to the increasing requirement of evidence-based approach to demonstrate the value of the drug
  • Entry of disruptive technologies, like big data analytics and m-health, are expected to increase in the future, as more HTA organizations around the world require real-world evidenc

Growth Drivers and Constraints

Drivers

  • Real-world evidence and outcome data for reimbursement
  • Increasing demand for showcasing value of the drug
  • Mandatory HTA submission in many countries
  • Pharma being forced to go beyond their comfort zone, like using big-data analytics and m-health technologies, which is driving outsourcing to a large extent
  • Pricing control forcing pharma to invest in substantiating their case (commercial trials)
  • Cost cutting within pharma, leading to increased outsourcing of these services without increasing the head count

Constraints

  • Lack of experience in using genomics, determining sub-group populations for effective outcome demonstration
  • Lack of a standardization of HTA requirements
  • Pharma in nascent stages of contracting in their non-core areas, like m-health and big data
  • Many countries lack mandatory HTA

Outsourcing Adoption Rate

  • Outsourcing is well established and a matured trend in this industry
  • Manpower cost is an issue (for small/mid-size pharma companies)
  •  Novel outsourcing for big data analytics is the new trend. E.g. Pfizer outsourcing real-world evidence data analytics to Optum in 2014
  • Large pharma companies conduct 30–50 percent of trial in-house that provide them with evidence/outcome data freely, eliminating a need for third-party players for those specific data
  • The major reason for greater outsourcing in this market is because of varying needs of each study, depending on competition, market, and disease
  • CROs are improving their value proposition by providing HEOR as an integrated service along with clinical trials, which can be as negotiation lever for pharma in a bundle
  • In the future, this category will see entry of disruptive technologies, like big data analytics and m-health, as more HTA organizations around the world require real-world evidence