Health economics

​​​​Health economics roles in the pharmaceutical industry can be divided into two main types:

Health economics in research

Research and development is all about making sure that a medicine works effectively to treat the disease, and that it is safe to take.

Clinical trials are the most time consuming, and expensive, stage of the development of a new medicine and, based on the results of the trials, regulatory bodies around the world will decide whether the medicine can be prescribed in that country. The role of the health economist is to ensure that trials collect economic and quality of life data that can be used to profile the value of the medicine.

Decisions on effectiveness

Decisions on effectiveness are based on trials where a new medicine is compared to an existing successful treatment or, if there is no effective treatment, to a placebo. In some diseases ‘success’ is easily measured, a bacteria has been killed or a vaccine has prevented people from getting a disease. However, in other types of illness, the benefits are only measured by changes to a person’s quality of life. An arthritis sufferer, for instance, they may be able to be more active, or suffer less pain. There also may be cost-savings from use of the new medicine such as less use of healthcare resources eg. fewer consultations with doctors and less time spent in hospital. A health economist will devise ways of measuring these improvements to create data that demonstrate the value of the medicine to different audiences such as regulators, doctors and patients.

The health economist will work closely with clinical development colleagues such as scientists, data managers, clinical research associates and statisticians to ensure that the appropriate data are gathered and analysed.

Health economics affiliate

A health economist in an affiliate normally has a more local role, working from a local head office of a company to obtain appropriate access for patients to the medicine in that country.

Access, or an agreement to pay for the medicine from public funds, requires an argument based on cost effectiveness, "value for money". In the UK this type of decision is made by the National Institute for Health and Clinical Excellence (NICE), the Scottish Medicines Consortium (SMC) and the All Wales Medicines Strategy Group (AWMSG). Increasingly, in the UK, other organisations, such as groups of Primary Care Trusts (PCTs), also need to be convinced of the value of a new medicine before they will let doctors in their area prescribe it.

Health economic models are used to support the case for access to the medicine.

Working closely with sales and marketing

A health economist in an affiliate works closely with colleagues in sales and  marketing. A responsibility is to develop publications which can be used to describe the value of the medicine.

The sales force who will be the main point of contact with doctors also need to be aware of the economic arguments for prescribing a new medicine. Health economists may be involved in training sales representatives to understand and use tools such as budget impact models which calculate the total cost of prescribing a medicine for a population of patients with the disease.

Last modified: 02 May 2024

Last reviewed: 02 May 2024