Why real-world evidence is a game changer for life sciences in the age of value-based care

by Jared Kimble

Value-based care is quickly becoming integral to the life sciences industry as the entire healthcare sector undergoes increased convergence. What that demands for pharmaceutical companies is better insight into the fair market value their products bring, or potentially will bring, to maximize all the benefits of those products.

From a commercial viewpoint, this is where real-world evidence (RWE) comes into its own. With RWE, evidence derived from real-world data, companies can discover key informational drivers, including what drugs a patient is taking and the price of that drug. They can also see how long the patient has been on the drug, the treatment regimen, the patient outcome, whether that patient continued taking the drug or switched to a different product.

This snapshot of the patient population — how the patients took the drug and how they fared on that drug — is invaluable for companies when they discuss pricing with health plans and the value of their drug to the patient.

Cost of the drug vs. cost to healthcare

The point of value-based care is to reduce costs for the healthcare system overall while improving patient outcomes. If a patient is undergoing a treatment that keeps him or her out of the hospital and helps the patient stay well, it tends to reduce healthcare costs and justify market positions on that drug when collaborating with the payer or insurer.

Insights from RWE also help support life sciences companies with risk-sharing agreements — in which they agree to carry the risk for their product if it fails to achieve efficacy levels in return for getting their product on the formulary.

The benefit of RWE is it allows companies to look at large samples across various geographical regions and patient cohorts. This gives companies far greater insight than data from traditional methods, such as clinical trials and snapshots from third-party providers.

With RWE, companies can see from a micro-level the outcomes of the care delivered as a result of their work, in a real-world population, while still protecting the privacy of the patient. They can use the data to assess both treatment and cost: Is the product of value to the patient? Does the money they spend on the drug help to reduce other costs in treating the patient’s illness?

Showing trends in effectiveness

Next, companies can start to look at rating scales, assessing the value range of patients taking the drug compared with patients taking no drug, or patients taking the company’s drug versus patients taking a competitor’s product. RWE can be used to determine trends in the overall effectiveness of the drug. It may be possible to show that patients taking the drug actually spend less on their health care than they did before the drug was prescribed or compared with patients with a similar disease profile using a different treatment regime.

Once they have that evidence, life sciences companies can use it in several ways. For example, they can use it to show insurers that their drug is worth covering. They can also use the data to carry out more targeted advertising to healthcare providers and organizations that aren’t prescribing the drug, or to bring that drug into regions where it may be needed most. Under today’s value-based care model, it’s important for providers to demonstrate improved outcomes for their patients. If a drug helps their patients stay well, there is clear benefit to the providers.

Given the huge scrutiny with price transparency of prescription medication, providing RWE that demonstrates the value of a product to the patient and the broader healthcare system is becoming more and more important. There are many factors that go into the price of the drug to the patient, and ultimately the price does not relate to the direct cost.  Many of the R&D costs have already been absorbed even before the drug gets market approval. If using RWE can show economic — as well as health — benefits to the patient, it will go a long way toward demonstrating the value the life sciences industry brings to realizing value-based care and, ultimately, advancing precision medicine.

Jared Kimble head shotJared Kimble has over 14 years of experience in the life sciences industry. His expertise ranges from software design and development to solution architecture where he is currently the offering lead for Life Sciences Regulatory Transformation Services. He leads the management and development effort for many key projects and was involved in several on-site engagements. Before joining DXC, Jared worked as a software engineer developing applications dedicated to providing financial exchange services for banks and financial institutions.



  1. Jared, this is an excellent article. As a new employee with DXC, I truly appreciate your article. I have worked in value-based care and know how it applies to marketing and advertising, and you are spot-on with how RWE and how data can be used to “carry out more targeted advertising to healthcare providers and organizations that aren’t prescribing the drug, or to bring that drug into regions where it may be needed most.” Excellent points. Makes me proud to work for DXC! Thank you!

    • Jared Kimble says:

      Terry, thank you for your comment. I continue to emphasize the unique value and importance of RWE in value-base care.

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