The drug development process is in dire need of transformation. Even after achieving regulatory approval, pharmaceutical companies are increasingly seeing their products subjected to health technology assessments (HTAs) by public and private payers. The cornerstone of HTA value appraisal, and thus reimbursability, is comparative effectiveness research (CER), a ‘real-world’ comparison of a new product with the existing standard of care. Burgeoning demand for CER will fundamentally transform drug development by forcing biopharmaceutical manufacturers to view drug innovation from a holistic, 360° perspective. Specifically, drug and device developers must alter their existing approach to R&D by: adapting experimental research design methods to address multiple stakeholder demands; demonstrating real-world value through a suite of post-market observational research methods; and creating a transparent CER evaluation protocol based on standard principles. In the long-term, CER is forecast to propel innovation by focusing R&D on products that deliver real-world value to multiple customers and market stakeholders.