ASSESSING THE RETURN ON INVESTMENT (ROI) OF HEOR & RWE TO THE BIOPHARMACEUTICAL INDUSTRY: CASE EXAMPLE OF COMPARATIVE EFFECTIVENESS RESEARCH USING SECONDARY RWD SOURCES
Author(s)
David Thompson, PhD1, Ravinder Dhawan, PhD2, Murtuza Bharmal, MS, PhD3, Christopher M. Blanchette, MA, MBA, MSc, PhD4, Craig Roberts, MBA, PharmD5, Vera Mastey, MS6, Sandra Nestler-Parr, MPhil, MSc, PhD7, Montserrat Vera-Llonch, MD, MSc, MPH8, Jan E. Hansen, PhD9, Rob Abbott, MA10, Riad Dirani, PhD11;
1Rubidoux Research LLC, Founder & Principal Consultant, Manchester, MA, USA, 2Pfizer, New York, NY, USA, 3AstraZeneca, Boston, MA, USA, 4Novo Nordisk, Doylestown, PA, USA, 5Merck, North Wales, PA, USA, 6Regeneron Pharmaceuticals, Sleepy Hollow, NY, USA, 7Biocryst Pharmaceuticals, Weybridge, United Kingdom, 8Ionis Pharmaceuticals, Inc, Carlsbad, CA, USA, 9Sanofi, Scottsdale, AZ, USA, 10ISPOR, Lawrenceville, NJ, USA, 11Teva Pharmaceuticals, West Chester, PA, USA
1Rubidoux Research LLC, Founder & Principal Consultant, Manchester, MA, USA, 2Pfizer, New York, NY, USA, 3AstraZeneca, Boston, MA, USA, 4Novo Nordisk, Doylestown, PA, USA, 5Merck, North Wales, PA, USA, 6Regeneron Pharmaceuticals, Sleepy Hollow, NY, USA, 7Biocryst Pharmaceuticals, Weybridge, United Kingdom, 8Ionis Pharmaceuticals, Inc, Carlsbad, CA, USA, 9Sanofi, Scottsdale, AZ, USA, 10ISPOR, Lawrenceville, NJ, USA, 11Teva Pharmaceuticals, West Chester, PA, USA
OBJECTIVES: Comparative effectiveness research (CER) involving analyses of secondary real-world data (RWD) sources is typically pursued with other biopharmaceutical commercialization activities to accelerate market access, secure favorable reimbursement, and enhance competitive positioning versus other products in class. The objective of this study was to understand the ROI of CER in this context.
METHODS: We constructed a decision-analytic model to characterize the risks, costs, and potential outcomes of biopharmaceutical product commercialization, contrasting hypothetical scenarios in which RWD-based CER is or is not conducted. We linked each terminal node of the decision tree to a net present value (NPV) calculation that characterizes research costs and product revenue accrual over time and then discounts their values back to the company decision whether to conduct CER. We assumed that the RWD-based CER would have 80% statistical power to detect significant differences. Due to the difficulty in disentangling the effects of CER from other commercialization activities, our base-case analysis utilized highly conservative assumptions regarding CER’s distinct impact: a 1-month acceleration in attainment of peak revenues and 1% increase in monthly revenues attributable to CER. Extensive scenario and sensitivity analyses were performed for products of varying peak annual revenue potential.
RESULTS: In base-case analyses, for a product with $100 million annual revenue potential, the decision to conduct CER yields the biopharmaceutical company an expected NPV advantage of $2,506,000 and 2.5-fold ROI on the $1 million cost of the RWD-based study; these numbers range to $163,356,000 expected NPV and 163-fold ROI for a product with $5 billion annual revenue potential. Results are sensitive to estimates of impact on revenue accrual, but relatively insensitive to the cost of the RWD-based CER.
CONCLUSIONS: As part of a well-articulated commercialization strategy, CER utilizing secondary RWD can yield a strong ROI to a biopharmaceutical company by accelerating attainment of peak revenues and enhancing product positioning.
METHODS: We constructed a decision-analytic model to characterize the risks, costs, and potential outcomes of biopharmaceutical product commercialization, contrasting hypothetical scenarios in which RWD-based CER is or is not conducted. We linked each terminal node of the decision tree to a net present value (NPV) calculation that characterizes research costs and product revenue accrual over time and then discounts their values back to the company decision whether to conduct CER. We assumed that the RWD-based CER would have 80% statistical power to detect significant differences. Due to the difficulty in disentangling the effects of CER from other commercialization activities, our base-case analysis utilized highly conservative assumptions regarding CER’s distinct impact: a 1-month acceleration in attainment of peak revenues and 1% increase in monthly revenues attributable to CER. Extensive scenario and sensitivity analyses were performed for products of varying peak annual revenue potential.
RESULTS: In base-case analyses, for a product with $100 million annual revenue potential, the decision to conduct CER yields the biopharmaceutical company an expected NPV advantage of $2,506,000 and 2.5-fold ROI on the $1 million cost of the RWD-based study; these numbers range to $163,356,000 expected NPV and 163-fold ROI for a product with $5 billion annual revenue potential. Results are sensitive to estimates of impact on revenue accrual, but relatively insensitive to the cost of the RWD-based CER.
CONCLUSIONS: As part of a well-articulated commercialization strategy, CER utilizing secondary RWD can yield a strong ROI to a biopharmaceutical company by accelerating attainment of peak revenues and enhancing product positioning.
Conference/Value in Health Info
2026-05, ISPOR 2026, Philadelphia, PA, USA
Value in Health, Volume 29, Issue S6
Code
RWD102
Topic
Real World Data & Information Systems
Topic Subcategory
Health & Insurance Records Systems
Disease
No Additional Disease & Conditions/Specialized Treatment Areas