Last month, I had a wonderful time at the 2024 International ISPOR meeting in Atlanta. I attended some fantastic sessions and caught up with many friends and colleagues. Overall, the vibe was very positive. Still, there was a darker undertone that was palpable: several very large pharmaceutical firms had substantially reorganized or eliminated their HEOR groups. The story was remarkably similar for each of them: the HEOR leads were sacked and the mid-level employees were sent to other groups, most often Medical Affairs or Market Access. One attendee described an almost Orwellian process where members of their HEOR group were called urgently for one-on-one “performance reviews” where they were told that they had a choice of moving to a different group or leaving the company. Their leaders—people with decades of experience in their organizations—were given no advance warning and generally were told that they would be leaving within days.
So many things played through my mind as I heard these remarkably similar stories. Honestly, my first thought was: can these companies be a little kinder to their employees? Good grief, I will always defend capitalism against the alternatives, but if your employees are working hard and in good faith, perhaps you could give them a bit of agency before they leave. Second, if a big company is facing tough times, how do they decide what is fat versus muscle? One person confided that they were pretty sure that the senior leadership simply drew a line, with those above the salary limit removed and those below kept (and scattered). If true, I think that Lester Thurow’s quote about bad business decisions might apply here:
“If a group of people has no sense where they came from-it is difficult for them to have a sense where they should go.”
One stream of thinking is that all this is much ado about nothing. Corporate restructuring is as regular as the seasons in big pharma. How would the sharp minds at McKinsey and Deloitte keep their very large salaries if they didn’t come up with ever better ways for companies to keep their edge? I was also reminded that the pharmaceutical industry, for all its weight and profit, is a tough industry. Many companies that initiated the layoffs had a number of pipeline drug failures, particularly in oncology, a space that I know well. Many dreams die for the makers of cancer drugs.
Moving beyond the general ways that pharma organizes and conducts its business, what does this all mean for those of us in HEOR? The obvious first question: is HEOR losing clout in pharma? Certainly, US HEOR groups face headwinds that are not issues in the rest of developed world. The US government has been unwelcoming to cost-effectiveness analysis, and most commercial insurers have not found a way for cost-effectiveness analysis to work in their business models. Of course, cost-effectiveness is only one component HEOR’s purview. Could it be that all the other work they do has also been devalued? More on that in a moment.
A second related question came to mind: maybe pharma doesn’t see a need to have separate HEOR groups? HEOR operates in a somewhat uncomfortable space in these companies. It is a science-based discipline, but a hybrid of many fields of study: epidemiology, economics, modeling, patient reported outcomes, etcetera. The audience for HEOR-oriented studies is very broad, and perhaps for that reason it doesn’t fit very well into typical pharma org charts. While there is a clear regulatory role for HEOR outside of the US (i.e., for Health Technology Assessment) in the US, HEOR has no regulatory underpinnings and therefore ends up being used in other ways to bolster messages of comparative effectiveness, budget impact, and (yes) value compared to competitors. As such, HEOR studies can be particularly influential for products that face a lot of competition. And here is one reason why I found the pattern of the layoffs to be so strange: it takes years to build up the skills and experience that is needed to navigate HEOR. People who are at the top of this pyramid are very rare indeed. I think it will take years for pharma to realize that letting their most senior HEOR leadership go was a grave mistake.
My third question was more self-reflective: Are those of us who work in this space producing the type of information that companies need to support their products? Certainly, the public self-criticism that plagues our field is not helpful (see an earlier post: QALY-Bashing: The Sequels). In my opinion, we also tend to add complexity instead of thinking how we could make a decision task easier, at least from the point of view of people who might want to use our work to make decisions.* These issues don’t take away the fact that decision making is hard in medicine, with multiple attributes that must be weighed simultaneously. What we do—collect, synthesize, and summarize vast amounts of information into common, accepted frameworks—should not be discounted. Otherwise, it comes down to who can shout the loudest.
Here’s one last thing I took away from my discussions with persons who were impacted by the layoffs: the HEOR work isn’t going away. While it is too soon to tell (it takes months for organizations to “recover” from downsizing), nobody I spoke with said that their projects were being eliminated. Also, when I look at the macro trends, it also doesn’t feel like HEOR is going into retreat any time soon. High cost, low value medicine hasn’t disappeared, nor have the health care cost pressures facing individual patients, businesses, and governments. Providers and insurers will still try to ferret out what isn’t necessary and do what they can to mitigate the cost burden of what is necessary in healthcare. As long as the organizations that pay for these products ask for the information that HEOR provides, pharma will be obliged to supply it.
*Cost-effectiveness acceptability curves comes to mind. I have yet to find a single person outside our field who finds them helpful.
HEOR is dead. Long live HEOR!
–Scott Ramsey, MD, PhD
Senior Partner and Chief Medical Officer, Curta
REFERENCES
- Beasley D. Prices for new US drugs rose 35% in 2023, more than the previous year. Reuters. Available at: https://www.reuters.com/business/healthcare-pharmaceuticals/prices-new-us-drugs-rose-35-2023-more-than-previous-year-2024-02-23/. Accessed June 6, 2024.