What is a Health Economist, What Do They Do, Can They Be Trusted, and Are They the Power Behind the Throne of Drug/Device Development?

Dr Clive Pritchard

Principal Health Economist, ICON PLC

Dr Pritchard delivered a thought-provoking overview of the role of health economists in drug and device development, reimbursement, and policy decision-making.

While health economics has historically been a peripheral concern for many in medical communications, Dr Pritchard made a compelling case for its growing centrality, and why medical writers and strategists need to engage with its concepts more deeply.

Understanding Health Economics

Health economics is concerned with the allocation of scarce healthcare resources, evaluating costs, outcomes, and overall value. Once dominated by economists, the field now includes life scientists, pharmacists, and clinicians, reflecting the applied, interdisciplinary nature of the work.

Tools of the Trade: Economic Evaluation

Dr Pritchard pointed out that central to health economic evaluation is microeconomic analysis, particularly techniques such as:

Cost-Effectiveness Analysis (CEA)
Cost-Benefit Analysis (CBA)
Cost-Utility Analysis (CUA)

The latter, often framed in terms of Quality-Adjusted Life Years (QALYs), is foundational in determining whether a healthcare intervention delivers sufficient value to justify its cost.

Dr Pritchard referenced Alan Williams’ well-known ‘plumbing diagram’ to illustrate the conceptual landscape of health economics, noting that QALY-based evaluations drive decisions at agencies like NICE and their international counterparts.

The Role of ICER in Decision-Making

He then discussed a key health economics topic of Incremental Cost-Effectiveness Ratio (ICER), which compares the added cost and effectiveness of a new treatment to the standard of care.

ICERs are used to calculate cost per QALY gained, with a typical NICE threshold of £20,000/QALY - a benchmark above which treatments may be rejected for reimbursement.

Importantly, ICER calculations assume that:

QALYs are an appropriate and sufficient measure of benefit
QALY maximisation is the right societal goal
ICERs accurately reflect opportunity costs

Each of these assumptions, Dr Pritchard noted, could be critically examined.

Complexity Behind the Numbers

Medical writers need also be aware of the methodological complexities behind these analyses. While clinical trials remain vital for determining treatment effect, health economists now rely heavily on decision-analytic models to simulate long-term clinical and economic outcomes.

These models integrate data from:

Trials
Epidemiology
Real-world evidence

Unlike hypothesis-driven science, these models are assumption-based, and typically downplay statistical significance in favour of practical decision-making.

A Case in Point: Partitioned Survival Models

Dr Pritchard highlighted as an example the Partitioned Survival Model (PSM), common in oncology modelling, which segments patient populations into mutually exclusive health states (e.g., progression-free, and progressed).

Survival extrapolation is often necessary to estimate long-term outcomes, introducing uncertainty that increases with projection length.

For medical writers, understanding the structure, inputs, and transparency of these models is increasingly important when interpreting or communicating health economics data.

“Balancing complexity and simplicity in these models is both science and art” – Dr Pritchard

Final Thoughts

In conclusion, Dr Pritchard emphasised the extent to which health economists now influence R&D, pricing, and market access.

With QALYs being institutionalised in HTA processes, and economic modelling integrated into early-phase development, health economists play a critical, if often under-recognised, role.

For medical writers, this means developing fluency in health economics concepts and language is no longer optional but essential to effective communication in value-driven healthcare environments.

Summary by Irena Ivanova MD