Why ISPOR’s 2020 conference on Health Economics and Outcomes Research concerns MedTech companies.

What is Health Economics and Outcomes Research (HEOR)?

Companies in the MedTech space intuitively understand the importance of the importance of Health Economics and Outcomes Research. But in practice, I notice that few companies understand the logical implications. Often with negative consequences.

For those who are not familiar with Health Economics and Outcomes Research (HEOR), let me quote how ISPOR describes HEOR:

“In today’s world, healthcare decision makers across the globe are often faced with the need to select therapeutic “interventions” from multiple treatment options, including biopharmaceuticals, medical devices, and healthcare services. However, the benefits and costs of these interventions can range dramatically, and the benefits can be economic, clinical, both, or may include hard to measure costs or benefits the patient experiences directly. Health economics and outcomes research (HEOR) can help healthcare decision makers—including clinicians, governments, payers, health ministries, patients, and more—to adequately compare and choose among the available options.”

Even those few companies that do not have a direct competitor in their therapeutic area (they might have a highly targeted orphan drug) competes with others – albeit with other therapeutic solutions. The reason is that payors have limited resources. Payors are incentivized (through profit motive, or government mandate) to use limited resources (insurance premiums, direct or indirect taxpayer money) to maximize the benefit for the population they cover. If the orphan drug is too expensive, the healthcare system will decide to not cover the therapy and remove it from the policy.

The ISPOR 2020 Conference

The first virtual ISPOR conference was held on May 18, and I was happy to attend. Rather than cover all the various presentations, I’ll focus a single panel discussion:

“Are existing regulatory evidence standards adequate for informing decisions on medical device adoption by US healthcare providers/hospitals?”

One speaker represented industry and two speakers spoke on behalf of their Hospital Value Analysis Committees that review HEOR data to help make decisions for the hospitals they serve. Both of these speakers were members of the Association of Healthcare Value Analysis Professionals – AHVAP.

The moderator introduced the topic by stating that hospital costs represent about 1/3rd of healthcare costs in the US, while medical devices are often an important contributor of hospital costs, they can also result in significant costs savings (as when they help reduce readmissions, hospital acquired conditions, etc…).

Budget pressures have shifted focus towards Value Based Healthcare and Value Analysis Committees help decide which drugs and devices to acquire and which to “deprioritize”. Consequently, HEOR is very relevant to the VAC decision process.

Value Analysis in Healthcare

The title of the panel discussion itself should raise concern.

First, the approval process for Medical Devices rarely requires the presentation of evidence supported by clinical trials: most devices are cleared through the 510(k) process, which is based on proving equivalence and does not require presentation of Clinical Evidence.

Besides, even if any evidence is presented as part of the approval process, such evidence need only address the safety and efficacy of the device.

While important, safety and efficacy are mandatory requirements that must be met before a VAC will consider investigating the use of a particular product. Healthcare stakeholders value care using evidence of Healthcare Outcomes over the cost of the Healthcare provided.

Consequently, VACs investigate the economic impact of new devices to the hospital operations as well as the impact on patient outcomes. Neither of these two issues are addressed during the regulatory process.

Because the regulatory process does not result in the generation of evidence of value, and because VACs want to use such evidence as part of their procurement decision, manufacturers are incentivized to collect the appropriate data and produce the Health Economics and Outcomes Research themselves.

Quality of HEOR Data and Evidence.

So far, all panelists agreed that HEOR studies would benefit all stakeholders, both the manufacturer and the VAC.

As the discussion shifted towards the topic of the quality of the HEOR data presented by the manufacturers, it became clear that VACs do not always believe the Health Economics and Outcomes Research evidence they are presented with. To the point where one of the panelists almost seemed to request access to the raw data such that they could make their own assessment.

The representative of industry acknowledged that HEOR studies presented by manufacturers should be credible and based on rigorous science, suggesting not all manufacturers lived up to that standard.

The discussion made clear that many manufacturers do not present credible HEOR data to the VAC -if any.

Clearly, such evidence is important to the success of the manufacturer’s products. As the regulatory process does not generate this kind of evidence, manufactures must consider generating such credible evidence. It benefits the manufacturer to consider this challenge at the very beginning of the product life cycle when regulatory and clinical strategies are developed.

BTW: As the organizer taped all presentations, I was able to participate in several “simultaneous” presentations, something I would not have been able to do if the conference was held on-site, a major plus for a virtual conference. On the down-side, I missed the networking offered by an on-site conference.

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