Understanding the Impact of Health Economics on Cost Effectiveness and Patient Outcomes

In a recent interview with Pharmaceutical Executive, Rob Abbott, CEO of ISPOR, discussed how health economics and outcomes research (HEOR) is transforming the way health systems and governments around the world address rising drug prices. Abbott highlighted the growing importance of real-world evidence, patient-centered approaches, and artificial intelligence in shaping value-based healthcare decisions. He also emphasized the critical role of cross-sector collaboration among regulators, payers, academia, and industry in advancing evidence-based policies and improving patient access to innovative therapies.

Pharmaceutical Executive: How is Health Economics and Outcomes Research (HEOR) shaping the way health systems and governments around the world address rising drug prices?

Rob Abbott: That’s a very timely and important question. To level set, health economics and outcomes research is an interdisciplinary field that draws on clinical trial results, real-world data and evidence, patient experiences, and economic analysis to evaluate medical treatments and interventions. What’s most important is that HEOR provides evidence to guide value-based pricing and decision-making, linking the cost of a treatment or drug to its real-world impact and patient outcomes. In this way, HEOR helps determine the cost-effectiveness of drugs, assessing value well beyond what clinical trials alone can reveal.

Full Interview Summary: Health economics and outcomes research (HEOR) is increasingly shaping how health systems and governments address rising drug prices. HEOR integrates clinical trial results, real-world data, patient experiences, and economic analysis to evaluate medical interventions. By assessing a treatment’s cost-effectiveness and real-world value, HEOR informs value-based pricing and decision-making, going beyond traditional clinical trial data to determine how drugs perform in everyday patient care.

A key trend highlighted in ISPOR’s 2024–2025 Top 10 Trends report is the growing importance of real-world evidence. Unlike clinical trials, real-world evidence captures patient outcomes, side effects, and overall cost-effectiveness after drugs enter the market, making it critical for both policy and clinical decisions. Another transformative trend is the accelerated adoption of artificial intelligence (AI) and digital health tools. AI is being used to synthesize literature, analyze complex data sets, and tailor treatment protocols efficiently. However, experts caution that while AI offers significant potential, human oversight remains essential to ensure patient-centered care.

From a global perspective, US healthcare excels in certain areas, such as cancer screening, vaccination rates, and advanced medical technology, but faces challenges including high per-capita costs, lack of universal coverage, and suboptimal outcomes in chronic disease and life expectancy. These issues highlight the universal challenge of managing rising costs amid increasing complexity.

Collaboration across government, academia, and industry is critical to advance evidence-based health policy and patient access. Organizations like ISPOR, with its global membership spanning regulators, payers, patient organizations, and academics, are fostering these partnerships. Initiatives, such as pilot projects aligning regulators and health technology assessment agencies in Europe, illustrate how coordinated efforts can improve patient access to innovative therapies while navigating the complexities of cost, efficacy, and healthcare delivery.

Overall, HEOR, real-world evidence, AI, and multi-stakeholder collaboration are central to shaping efficient, patient-centered, and cost-conscious healthcare systems worldwide.