
Health economics and outcomes research (HEOR) is rapidly advancing from a discipline focused on cost and health outcomes comparison to one that can measure and evaluate the environmental impact of pharmaceutical products and the supporting supply chains. As healthcare systems make up for an estimated 4-5% of global greenhouse gas emissions with the pharmaceutical industry accounting for a significant share,(1) HEOR provides a standardized framework that connects decarbonisation efforts with clinical, economic, and population health outcomes. By integrating greenhouse gas emissions into conventional value frameworks to integrate, resource use, and waste along with QALYs and budget impact, HEOR disseminates environmental sustainability and patient value in a common language for collective assessment.(1, 2)
At the basis of this transformation is the HEOR’s ability to robustly measure environmental effects by incorporating life cycle assessment (LCA) into economic evaluations.(3) These methods help assess emissions across supply-chains of raw material extraction, active pharmaceutical ingredient manufacturing, formulation, packaging, logistics, and end-of-life disposal. Findings from LCA-based studies have shown these emissions to be concentrated early in the value chain, especially in API production and other energy-intensive processes. By converting these emissions into comparable units, such as CO2 equivalents per defined daily dose or treatment course, HEOR facilitates stage-specific environmental footprints to match with validated cost and outcome measurements, enabling direct comparisons across therapeutic options.(4, 5)
HEOR provides a systematic pathway for integrating environmental impacts into health technology assessment (HTA) and payer decision-making, domains that have conventionally focused on clinical efficacy and cost.(6, 7) Increasingly, value frameworks are being recognized to integrate environmental externalities either as additional outcomes, modifiers to cost-effectiveness ratios, or clearly weighted criteria within multicriteria decision evaluations. Methodological advances are now exploring how climate-related damages or health co-benefits of mitigation could be monetised and embedded into cost-benefit analyses, facilitating environmental impacts to be valued alongside conventional health outcomes more transparently and consistently.(1, 2, 4)
With quantification and valuation, HEOR can prioritize carbon-reduction methodologies across pharmaceutical supply chains by recognizing interventions that offer the greatest emissions reduction per unit of cost or per unit of health benefit maintained. As pharma supply-chain activities result in a hefty healthcare carbon footprint, the potential for mitigation is significant. HEOR can help compare strategies, including cleaner solvents, continuous manufacturing, energy-efficient production lines, optimised cold-chain logistics, and sustainable packaging, both with regards to carbon reduction potential and their impact on medicine prices, affordability, and accessibility.(8, 9)
On a broader level, HEOR supports strategic planning by prioritizing supply-chain decarbonisation in the bigger scheme of sustainable and climate-resilient healthcare. Higher disease burden and health system costs resulting from climate change have compelled positioning greener pharmaceutical production and logistics as preventive investments. By associating climate-sensitive disease projections with examples of technology adoption, pricing, and supply-chain configuration, HEOR facilitates decision-makers to comprehend trade-offs between short-term investments in greener technologies and long-term benefits in reduced emissions and avoided morbidity and mortality.(1, 8, 10)
HEOR can facilitate the alignment of incentives among manufacturers, payers, and regulators for converting low-carbon supply chains into sources of competitive advantage rather than a perceived cost burden. Examples from markets including environmental criteria in procurement policies have shown that sustainability can be incorporated into reimbursement and tendering without compromising access. However, strong evidence is required to ensure that requirements remain proportionate and equitable. By determining how environmental metrics influence prices, volumes, and patient outcomes, HEOR enables the development of contracts, payment models, and regulatory pathways to reward decarbonisation while maintaining the core objectives of safety, efficacy, and timely patient access to essential medicines.
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References
- Or Z, Seppanen AV. The role of the health sector in tackling climate change: A narrative review. Health Policy. 2024; 143:105053.
- Goldman E, Hamilton L, Dehipawala S, et al. Attitudes and Perceptions on Environmental Sustainability Efforts in the Life Sciences Industry: A Cross-Sectional Survey From HEOR and Industry Professionals. Value Health. 2024; 27(12):S458.
- Chen Z, Lian J, Zhu H, et al. Application of Life Cycle Assessment in the pharmaceutical industry: A critical review. Journal of Cleaner Production. 2024; 459:142550.
- Williams JT, Bell KJL, Morton RL, et al. Methods to Include Environmental Impacts in Health Economic Evaluations and Health Technology Assessments: A Scoping Review. Value Health. 2024; 27(6): 794-804.
- Henshner M. Incorporating environmental impacts into the economic evaluation of health care systems: Perspectives from ecological economics. Resources, Conservation and Recycling. 2020; 154:104623.
- McAlister S, Morton RL, Barratt A. Incorporating carbon into health care: adding carbon emissions to health technology assessments. Lancet Planet Health. 2022; 6(12):e993-e999.
- Kingma SL, van Bree EM, Rutten-van Mölken MPMH, IJzerman MJ. Exploring Methods to Include Carbon Emissions into an HTA: The Case of Remote Patient Monitoring. Value Health. 2025; S1098-3015(25)05693-1.
- A framework for the quantification and economic valuation of health outcomes originating from health and non-health climate change mitigation and adaptation action. 2023. Accessed online on 9th December 2025 at: https://iris.who.int/server/api/core/bitstreams/e2f1790f-3bb1-41e3-8d87-f4d4d85b3dbf/content
- Dehipawala S, Goldman E, Hwang E, et al. The Pharmaceutical Industry’s Carbon Footprint and Current Mitigation Strategies: A Literature Review. ISPOR. Accessed online on 9th December 2025 at: https://www.ispor.org/docs/default-source/intl2023/ispor23dehipawalaposter126398-pdf.pdf?sfvrsn=8d02de2b_0
- Henshner M. Climate change, health and sustainable healthcare: The role of health economics. Health Economics. 2023; 32:985–992.
















The world today is observing an exponential growth in the volume and variety of the real-world data (RWD). Thanks to the technological advancements and the rise in the use of integrated electronic medical records (EMRs), RWD is ever more accessible and applicable in the regulatory domain as well as outcomes research. The evidence from randomized controlled trials (RCTs) is still undoubtedly the gold standard for assessing treatment efficacy; however, the interest and potential for adapting RWD into real-world evidence (RWE) is on the rise. This can prove extremely beneficial to make informed healthcare decisions. (1)
Every country exercises strict control on medicines’ market access. Typically, this requires successful completion and adequate presentation of results from phase I through phase III clinical trials, bringing forward the findings of medicine’s safety and efficacy. The USFDA approves approximately 40 new medicines for the US market each year through this process. (1) In India, this number is more than 100 new medicines annually; however, there is not enough published evidence on submitted applications or summaries of approved medicines. Therefore, concerns are being raised about the safety and efficacy around medicine approvals in India in the absence of appropriate clinical trials. (2,3)