Health Economics

At Avalon, our researchers support our clients in understanding and demonstrating the economic value of their products starting from the early stages of clinical development (Phase I/II) through commercialization (post launch).

Click a Subject Below:

Retrospective Database Analyses

Retrospective database analyses are an invaluable tool for understanding a myriad of facets related to healthcare delivery in clinical practice or the “real world.”

Comprising of a longitudinal record of care delivered in pharmacy, inpatient, and outpatient settings, retrospective databases are a wealth of information on a large number of patients. Studies utilizing these databases are a relatively inexpensive alternative to randomized controlled trials (RCTs) for answering ongoing questions about the effectiveness and safety of healthcare interventions. Such studies are also vital in informing the clinical development program through obtaining insights into the natural history of medical conditions and existing/recommended treatment patterns and treatment gaps. During the commercialization phase, or post-launch, retrospective database studies are used to profile factors related to the effective adoption of new treatments or technologies by patients and physicians.

Our staff has extensive experience working with a wide array of databases encompassing:

  • Various available commercial medical and pharmacy claims databases in the US including LifeLink Health Plan Claims Database provided by IMS, Thompson Reuters Commercial Claims and Encounters and Health and Productivity Management databases, Protocare Sciences, and others
  • Government databases in the US including Medicare and Medicaid claims databases, Surveillance, Epidemiology and End Results (SEER) cancer registries, National Health and Nutrition Examination Surveys (NHANES), Medical Expenditure Panel Survey (MEPS), National Health Interview Survey (NHIS), National Hospital Discharge Survey (NHDS), National Ambulatory Medical Care Survey (NAMCS), National Medical Expenditure Survey (NMES), Healthcare Cost and Utilization Project (HCUP), National Comorbidity Survey (NCS), and others
  • General practitioner and specialist medical records databases in Europe including IMS Disease Analyzer databases, The Health Improvement Network (THIN) database, General Practice Research Database (GPRD), and others
  • Disease-specific or product-specific private industry sponsored or medical association registries in the US, Europe, and Asia

At Avalon, our retrospective database studies have been instrumental in answering critical questions, and empowering our clients in making strategic business decisions at different stages during drug development.

Below are examples of some questions related to the economic implications of medical conditions and healthcare interventions our studies have answered for our clients:

  • What is the burden of illness (BOI) or the direct medical cost of treating a specific disease in the real world?
  • What proportion of the costs of treating a disease are attributable to drug therapy?
  • What are the primary cost drivers for managing a specific medical condition? Inpatient costs? Outpatient costs? Pharmacy costs?
  • Do costs vary by disease and patient sub-groups?
  • What are the costs associated with competing treatment strategies?
  • What is the natural history of a disease, and are there any treatment gaps?
  • What are current treatment patterns for any particular medical condition and are they evidence based?
  • What are the compliance and persistence rates for existing treatments and is there opportunity for improvement?
  • Are the dosing schedules of competing treatments associated with treatment compliance and persistence?
  • How quickly are patients switching off treatments or discontinuing treatments all together?
  • Are patients more likely to switch off treatment A versus treatment B?
  • What factors (e.g., age, gender, comorbidities, concomitant medications, etc) predict switching and/or discontinuation patterns?
  • What factors predict compliance and persistence?
  • How long do patients stay on a particular medication prior to switching? and what percent of patients who switch therapies are dosed effectively?
  • Are costs of patients who switch therapies different from those who don’t?
  • Which treatments are more likely to be augmented? and what are the cost implications of these strategies?
  • Is a particular medication being given at its clinically effective dose?
  • What are the pre- versus post-index healthcare utilization and costs of competing treatments?
  • Do certain treatments avoid/delay the need for expensive surgeries?
  • Does the use of certain medical devices reduce the costs of surgery?
  • Does the use of a specific diagnostic device reduce the overall cost of a disease due to early diagnosis and/or prevention?
  • What are the cost savings associated with preventive medical or surgical interventions?
  • What would be the expected sales of new bio-pharmaceutical products or medical devices?
Observational Cost of Illness/Treatment Studies

When our clients’ research questions and information needs extended beyond the scope of data available in retrospective databases, we provided solutions through the design and conduct of large scale observational studies.

Study objectives have ranged from direct and indirect costs including profiling costs associated with over-the-counter medications, alternative treatments, therapeutic procedures, surgeries, impaired work productivity; functional and quality of life assessments for patients with specific medical conditions or taking specific treatments; long-term effectiveness and safety of bio-pharmaceutical products and medical devices; and patient preference, compliance, persistence and satisfaction with treatments.

Our observational studies have comprised longitudinal and cross-sectional patient surveys, physician and caregiver surveys, medical chart data abstraction, and patient, physician, and caregiver focus groups. Patients in our studies were recruited through their physicians, health plans, membership of advocacy groups, or from the general population using TV, interent, or print media, and we have US and Ex-US capabilities.

We undertake all aspects of these studies including:

  • Protocol development
  • Development of data collection instruments including case report forms for completion by patients, caregivers, physicians, nurses or other healthcare professionals
  • Study site identification
  • Physician/investigator screening and recruitment
  • Managing all aspects of Institutional Review Board (IRB) submissions
  • Investigator training and study monitoring
  • Data collection and management
  • Data analysis and study report development
  • Publication and dissemination of study findings

Below are examples of some questions related to the economic implications of medical conditions and healthcare interventions our observational studies have been instrumental in answering for our clients:

  • What is the societal burden (direct, indirect, and intangible costs) of treating certain medical conditions?
  • Is there an opportunity for market development through the identification of treatment gaps and need for a new intervention/therapy?
  • What are the direct medical costs to payers of treating a given medical condition and will creating economic awareness facilitate reimbursement?
  • What are the primary cost drivers for managing a specific medical condition? Direct costs? Indirect costs? Caregiver costs? Out-of-pocket expenses?
  • What are the costs associated with impaired work productivity, absenteeism, or disability due to a specific medical condition?
  • What are the costs of alternative treatments?
  • What is the impact of disease severity on direct and indirect costs?
  • What is the natural history of a disease, and are there any treatment gaps?
  • Do total costs of treating a disease and primary cost drivers vary by disease stage?
  • What are the costs of a disease purely from a patient perspective?
  • What are the most commonly used treatments in clinical practice?
  • What is the extent of use of diagnostic and therapeutic devices in a specific patient population? and what are the cost implications of these interventions?
  • What are current treatment patterns for any particular medical condition and are they evidence based?
  • What are the compliance and persistence rates for existing treatments and is there opportunity for improvement?
  • How do clinical variables (e.g., renal and hepatic function) influence treatment patterns and costs in specific patient sub-groups (e.g., elderly, patients with renal or hepatic impairment)?
  • What are the costs of treating comorbid illnesses?
Economic Models

At Avalon, our economists take pride in developing models that are end-user friendly and have complete transparency in terms of model inputs, assumptions and results. Our models are developed using Excel, but depending upon user preference, we create graphical user interfaces to enhance adoption and use by a technically diverse audience.

Our models have supported market access for bio-pharmaceutical products in the US and Europe, been and integral part of regulatory and reimbursement submissions, and have been customized to address country specific regulatory and/or payer requirements.

Depending upon the specific questions our clients are aiming to answer, we have been commissioned to develop these models starting early (Phase I) in the drug development process.

Cost-effectiveness and Cost-utility Models

Through these models we assisted our clients in understanding and comparing (“putting into context”) the total medical costs (treatment acquisition and administration costs, costs of treatment-related healthcare utilization, costs of treatment-related adverse events) versus outcomes of bio-pharmaceutical products.

Below are examples of some of the questions our models have answered:

  • What is the cost-effectiveness of a new therapy versus standard of care?
  • What is the price at which a particular therapy will be cost-effective?
  • At what price point will the cost-effectiveness ratio for a particular therapy be a certain predetermined value?
  • Are there any intermediate cost-effective outcomes?
  • What is the cost of an intervention per quality adjusted life year (QALY)?

 

Budget Impact Models

Our Budget Impact Models (BIMs) helped our clients understand and forecast the change in “total spend” after adding a new bio-pharmaceutical product or medical device to any payer formulary. Costs of healthcare interventions in our BIMs comprised treatment acquisition and administration costs, costs of treatment-related healthcare utilization, and costs of treatment-related adverse events and were derived from published unit cost data or retrospective claims database studies.

The BIMs we developed supported our clients in answering important questions such as those listed below:

  • What is the overall budget impact (increase or decrease) of adding a new or existing bio-pharmaceutical product(s) to managed care, hospital, third party payer, and government formularies?
  • At what price will a particular therapy be “cost-neutral” in terms of the overall budget impact?
  • What would be the budget impact of replacing all competing treatments with a new therapy? and would such a strategy be cost-saving?
  • What would be the budget impact of replacing only a portion of currently used treatments with the new treatment? and what is likely to be the magnitude of cost-saving associated with such a strategy?
  • Based on projected budget impact, are compounds in development commercially feasible?
  • What is the per member per month (PMPM) cost to a health plan of reimbursing an expensive therapy for a rare disease population?
  • What is the PMPM cost of adding a new treatment to a payer formulary?
  • What is the PMPM cost of replacing existing treatments with a new treatment?

 

Cost of Treatment Models

Our cost of treatment models have assisted our clients in assessing the average annual costs per patient, or for a cohort of patients, associated with treating a specific medical condition in different countries based on the respective treatment patterns in each country.

Below are examples of questions our cost of treatment models have answered for our clients:

  • What are the average annual costs of treating a particular disease and do they differ across countries?
  • How will the introduction of new treatments change the treatment landscape and will there be an increase in the average annual cost per patient?
  • Are the costs of managing a disease higher in some countries due to the unavailability of specific treatments in these countries?
  • What is the economic impact of a given medical condition and will creating awareness facilitate reimbursement?
  • Are there any treatment gaps which if addressed are likely to reduce the economic burden of a particular medical condition?
  • In which line of therapy are the treatment gaps most pronounced? primary treatments? secondary treatments? add-on treatments?
  • What are the costs associated with existing treatments and how much do they contribute to the total direct costs of treating a particular disease?
  • Are there target patient sub-groups that are untreated or undertreated due to unavailability of appropriate and effective treatments for these patients?
Economic Clinical Trials

In cases where the economic impact of a new healthcare technology is expected to be high, our clients have relied on us to design and implement randomized controlled trials where the primary endpoint is an economic measure. The questions these studies answer center around determining costs associated with a particular treatment versus placebo, standard or care, or the market leader/primary competitor.

We undertake all aspects of these studies including:

  • Protocol development
  • Development of data collection instruments including case report forms for completion by patients, caregivers, physicians or nurses
  • Study site identification
  • Physician/investigator recruitment
  • Investigator training and study monitoring
  • Data collection and management
  • Data analysis and study report development
  • Publication and dissemination of study findings

The types of questions these studies answered for our clients were:

  • What are the direct medical costs (including costs of treatment-related healthcare resource utilization and adverse events) associated with treating patients with two comparator treatments?
  • What are the costs associated with impaired work productivity, absenteeism, or disability for patients receiving two comparator treatments?
  • Do total costs for patients receiving the two comparator treatments vary by disease stage or severity?
Economic Data Management & Analysis

Our clients often request our services for management and analysis of health economics data collected as a part of their pivotal studies. The scope of our support has ranged from all or some aspects of the following:

  • Designing and/or recommending health economic measures to be incorporated in pivotal studies
  • Determining the economic data collection schedule
  • Development of the statistical analysis plan
  • Analysis and interpretation of economic data
  • Development of study reports
  • Publication and dissemination of study findings
Strategic & Implementation Plans

Our clients have often called on Avalon researchers to develop plans that outline the health economics and reimbursement strategies for their bio-pharmaceutical products and medical devices and propose studies to effectively operationalize those strategies. We are often our clients’ preferred partner in conducting the proposed studies.

Along with being a key component of the product development program, our plans have also answered the following critical questions for our clients:

  • What economic value messages will be essential for market access and penetration? and how will these messages differ by country?
  • Will different value messages be important to different stakeholders and why?
  • What economic value messages will be critical to communicate at the time of product launch?
  • What economic value messages will be essential during life cycle management, post commercialization?
  • What types of studies will be required to obtain the necessary data for the proposed value messages?
Environmental Analyses

We have undertaken numerous environmental analyses for our clients to answer a number of fundamental questions key to understanding the drug development and commercialization landscape. These analyses were conducted for a specific product or for products within and across therapeutic specialties:

  • What is the potential market for a particular product, in terms of its size, whether it is new or developed, and is it saturated in terms of available treatment options?
  • Who are the competitors, what are competitor product attributes, and what product attributes are the most valued by payers, patients, and decision makers?
  • How do the attributes of the product or products we are studying stack up versus competitors?
  • What are the strengths and weakness of competitor product attributes?
  • What are the potential opportunities and challenges for new products?
  • What label claims do competitor products have and how important are these for product approval? and subsequently market access and penetration?
  • What are the economic value messages for competitor treatments? and how effective have these messages been with different stakeholders?
  • What are the emergent market trends?
  • What are the incidence and prevalence rates for a particular disease? What is the market size? and is the market expected to grow or shrink in the future?
  • Are there any treatment gaps and unmet medical needs?
Literature Reviews, Backgrounders, Meta-analyses
  • Over the years, we have assisted our clients with numerous critical appraisals and reviews of pertinent health economics literature. Our reviews have been disease area-specific or product-specific and have informed the development of internal documents, background sections of study protocols and product dossiers, and supported the design of clinical and economic studies and development of case report forms and other data collection instruments.
  • Our meta-analyses (of resource use or clinical data) have predominantly been conducted in conjunction with our economic modeling projects, although we have also been commissioned to complete such evaluations to support our clients’ internal modeling and clinical development initiatives.
CLICK TO PRINT THIS PAGE
Print Friendly, PDF & Email

Therapeutic Areas

  • Anti-infectives
  • CNS
  • CVS
  • Dermatology
  • Endocrine and Metabolic Disorders
  • GI Disorders
  • Oncology
  • Ophthalmology
  • Organ Transplant
  • Pain
  • Respiratory