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The Value of Real-World Evidence in Health Economics and Outcomes Research

According to research, as of 2017, the biopharmaceutical industry is actively seeking to increase the use of real-world data (RWD) and real-world evidence (RWE) throughout the product lifecycle. This includes not only meeting marketing requirements, but also incorporating RWE into regulatory submissions. Today, real-world evidence has become an integral part of demonstrating the value of pharmaceuticals, diagnostics and medical devices.

What real-world evidence is and how it differs from clinical trials

Real-world evidence (RWE), as defined by the U.S. Food and Drug Administration (FDA), is medical information obtained from a variety of sources outside of routine clinical trials. FDA recognizes that such data can effectively supplement knowledge from “traditional” clinical trials, which have well-known limitations that make it difficult to generalize results to broader patient, provider, and medical system populations or settings that reflect actual use in practice.

Evidence-based studies examine medical information that is collected during routine medical practice or from other non-experimental sources. They differ from randomized controlled trials (RCTs) and other study designs in the following characteristics:

Evidence-based studies examine medical information that is collected during routine medical practice or from other non-experimental sources. They differ from randomized controlled trials (RCTs) and other study designs in the following characteristics:

Type of data source

RCTs are experimental studies in which participants are randomly assigned to different groups, one receiving the treatment being tested (intervention) and the other receiving a control or placebo. This creates controlled conditions that allow causal relationships to be assessed.

Evidence is data that is collected from real life, from routine medical practice.

Typically, real-world data come from sources such as:

  • administrative data, including electronic medical records (EMRs), claims and billing information, product and disease registries, and data collected from personal devices and health apps;
  • data provided by patients;
  • new data sources, including information from social media and the results of cross-sector data collaborations.

These reflect the actual utilization of medicines and health services in the population.

Control and random assignment

In RCTs, there is a control group that receives placebo or standard treatment and an intervention group that is assigned to the treatment being tested. Assignment to the groups is randomized to help reduce possible distortions and eliminate the influence of external factors.

In the case of the actual data, there is no random assignment and no control group. Information is collected by observing actual events and treatments that occur outside the controlled setting.

Opportunities and limitations

RCTs provide an opportunity to establish causal relationships between treatment and outcomes. They have a high degree of internal validity but can be expensive, time-consuming, and not always applicable to real-world practice.

Evidence-based data have high external validity because they represent real-life scenarios in routine medical practice. They allow the real effects of treatment on populations and behaviors to be studied in real-world settings, but may be influenced by various factors that can skew the results.

The importance of real-world evidence in health economics and outcomes research

Healthcare is now rapidly moving into a new era, with an emphasis on patient choice and a focus on outcomes and value. Traditionally, healthcare systems have focused on medical interventions that occurred through episodic interactions with patients, but now realize the importance of a comprehensive understanding of external factors and ongoing care.

The importance of real-world evidence for HEOR stems from several reasons:

  1. Clinical trials are often conducted in settings that do not fully reflect actual clinical practice. Participants in clinical trials may be younger and in better health than patients who would normally be treated in real life.
  2. Clinical trials can be costly and time-consuming – real-world evidence can be generated more quickly and cheaply, allowing more rapid evaluation of the effectiveness of new treatments.
  3. Clinical trials usually focus on evaluating the efficacy of treatments compared to placebo or standard treatment, but they may not evaluate efficacy comparatively with other treatments that are available in real-world clinical practice.

Therefore, real-world evidence based on data from real-world settings becomes more relevant and valuable for informed health care decision-making.

Application of real-world evidence in health economics and outcomes research

Real-world evidence impacts different areas of our lives, and all stakeholders in the healthcare value chain use real-world evidence to make decisions.

Physicians and health care providers use electronic health record data for physician-led clinical research. At the same time, healthcare administrators use the same data to monitor the quality of care across the system, including monitoring compliance with medical standards. For example, in the UK, the National Health Service is already implementing outcomes-based pricing for some treatments. In 2015, the NHS entered into an agreement with Janssen regarding the use of the hepatitis C drug Olysio, under which the NHS receives a discount if patients are not cured after 12 weeks of treatment.

Payers use their claims data to improve access to care for members. They often integrate claims data with EMRs to assess the value and effectiveness of providers or medical protocols. In Europe, health technology assessments are used to compare care models with National Institute for Health and Care Excellence (NICE) guidelines. In addition, these assessments help determine pricing and reimbursement levels. An example of this practice is the creation of the Systemic Antitumor Chemotherapy Therapy (SACT) dataset in the UK in 2011. This dataset was used to document therapy in the country, support treatment choice, and better understand service delivery and treatment models.

Regulators are applying real-world evidence (RWE) to monitor the safety of marketed products through traditional pharmacovigilance tools as well as new digital tools such as the FDA Sentinel Initiative. At the same time, lawmakers are recognizing the importance of RWE. In the United States, the 21st Century Cures Act (2016) establishes public-private partnerships to collect data and improve understanding of diseases, supports patient-centered drug development, and modernizes clinical trial design and review processes.


Real-world evidence is useful for evaluating the efficacy and safety of new treatments and for improving the quality of care. They can be obtained more quickly and cheaply than clinical trials and can provide more detailed information about how treatments work in real clinical practice. Planning for the necessary evidence early, prior to product launch, can ensure that health economics and research outputs interact smoothly, which supports the value of the product and ensures market access.


IEMLabs is an ISO 27001:2013 and ISO 9001:2015 certified company, we are also a proud member of EC Council, NASSCOM, Data Security Council of India (DSCI), Indian Chamber of Commerce (ICC), U.S. Chamber of Commerce, and Confederation of Indian Industry (CII). The company was established in 2016 with a vision in mind to provide Cyber Security to the digital world and make them Hack Proof. The question is why are we suddenly talking about Cyber Security and all this stuff? With the development of technology, more and more companies are shifting their business to Digital World which is resulting in the increase in Cyber Crimes.


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