M&As in Health Economics and Outcome Research Sourcing Implications

Satyam Mishra, Research Analyst, Beroe Inc.

Abstract

Health Economics and Outcome Research (HEOR) function has gained wide acceptance due to the regulatory authorities demanding more data for proving drug effectiveness and payers requiring data for reimbursement. Lesser barriers to entry resulted in a fragmented supply base of the HEOR function consisting of CROs, Data analytics, and market access companies. Last few years have seen a great activity of M&As especially in the developed regions of USA and Europe in this category with CROs and Data analytics companies acquiring Market access or HEOR niche companies to offer one-stop-shop for data analytics services across the functional areas of drug value chain. This consolidation will have an impact on the procurement team of the large Pharma to consolidate their market access spend either with the CROs or the Data analytics companies and move away from the existing tactical approach towards a more strategic one.

Introduction

• Throughout globe ( Especially in North America and Europe) Pharma companies are placing greater emphasis on balancing risk and return and are moving towards providing more extensive healthcare solutions in order to influence pricing and regulations within the wider market. This renewed focus is demanding greater analysis of the long-term effects of drugs, the associated risks and the potential long-term returns for organizations – all of which require the analytical skills of health economics and market access professionals.
•  For example, in the Netherlands, the success of new drugs is largely dependent on whether health insurance companies will reimburse the cost of the drug. As a result the health economics and outcome research function (HEOR) has been growing rapidly across Europe, particularly within many of the large Pharma organizations.
•  Despite being a relatively new function we’ve already seen high demand in a number of areas. Health Economists, Market Access Managers, Outcome Research specialists and Modelers are particularly in demand. Demand remains high for permanent employees as organizations look to safeguard intellectual property and secure long-term talent in order to minimize the costs associated with the recruitment and on-boarding process.
• High demand for health economics and market access services have led to a fragmented supply market due to entry of large number of new suppliers in last 4-5 years. Fragmented supply market is considered a constraint in consolidating spend with few vendors and derive subsequent sourcing efficiencies.

Download '.pdf' Format of the whitepaper.