What is a Budget Impact Model (BIM)?
A budget impact model is a standard deliverable for HEOR teams and allows for estimation of the costs associated with adding a drug to formulary for a given payer or health system. It is often used in discussions with payers by medical outcomes liaisons (HEOR field team) and potentially by market access account executives as well in the US. Outside of the US, it may be used by some affiliates with various payers depending on the country situation and laws.
A BIM typically allows the user to set the population size of interest and contains pre-populated prevalence estimates for the target population for treatment. It will often also have some figures to estimate uptake of the drug in the population of interest (inputs may come from company or external forecasts or other data), marketshare expectations over time (if other competitor treatments are modelled as well), and costs of drugs (including fields for discounts, out-of-pocket costs, etc.). Sometimes the model will also include potential medical cost offsets depending on the therapeutic area (e.g. in the cardiovascular space, a drug that has shown benefit in reduction of CV outcomes may tabulate the expected reduction in events in the target population and subtract the cost of those events from the overall cost of treatment). Most fields in budget impact models are modifiable, especially if variance is expected over plans.
The key output of a BIM is the expected total cost for all of the modelled drugs over the time horizon of interest (typically 1-5 years). Sensitivity analyses may be included to visualize how changes in various parameters may impact the budget impact results.
How is a Budget Impact Model used?
A budget impact model is most commonly used by medical outcomes liaisons with payer customers. It is usually limited to use in the post-approval space and some companies allow use proactively while others may limit to reactive use only depending on the contents and assumptions in the model. The BIM is a standard deliverable for HEOR, so payers will often make requests for it without any prompting. Sometimes, companies also build in a PDF report of results that can be generated by the BIM and can be left behind with payers.
The BIM is considered a standard launch deliverable for HEOR.