Health economics and outcomes research (HEOR)

Health economics and outcomes research (HEOR) is the discipline that measures and compares the clinical outcomes, cost, and patient-reported value of treatments, devices, and health interventions. It sits at the intersection of clinical evidence and economics, asking not just "does this treatment work" but "what is it worth, to whom, compared with the alternatives."

HEOR draws on both clinical trial analytics and real-world evidence, and applies techniques such as cost-effectiveness analysis, budget-impact modeling, and quality-adjusted life-year (QALY) estimation to express a treatment's value in comparable terms. This differs from a clinical trial's primary endpoint analysis, which typically asks only whether a treatment is safe and effective, not whether its benefit justifies its cost relative to existing options.

HEOR output is used by pharmaceutical and device manufacturers to support pricing and reimbursement submissions, by payers and health technology assessment bodies to decide what to cover, and by health systems for population health management investment decisions. A well-known pitfall is extrapolating short-term trial or observational data into long-term cost and outcome projections using assumptions that are never validated against what actually happens once a treatment reaches wider, more varied use, which is one reason HEOR increasingly pairs with post-approval pharmacovigilance follow-up.