Pharmaceutical Business Strategy and Forecasting Creating insights from market research

Author: Sanobar Syed, Associate Director, Beigene

In the increasing uncertainties and volatile market, pharmaceutical companies have to rethink their approach to forecasting in oncology. When projections are misaligned, pharma companies will have to answer shareholders. But when forecasters get it right, manufacturers can optimise resources to fit the opportunity and produce plans that deliver innovative medicines to patients who need them. Oncology is moving away from the old approaches and is embracing a new set of forecasting tools built specifically for its complexity.

The pharma sector’s ongoing transformation has prompted most pharma and biotech players to focus on launching new products, developing innovative technologies, virtual clinical trials, and rapid digitalisation. These initiatives are proving to be quite challenging.

To develop a revenue forecast for a new pharmaceutical product in development, primary research is conducted in which physician respondents are shown a target product profile and asked how much they would use “Product X” if it was available. Anyone who has experience doing physician market research will be quick to point out that one must apply a standard research “haircut” to account for bias. Take 50 percent off of physician-reported responses, they say. Or potentially chop based on a top-two box score. Either way, it’s acknowledged common practice; everyone does it. But an arbitrary standard haircut may not be appropriate for every market research study. Physicians have a general idea of their historical prescribing but asking them to estimate future prescribing share without putting their responses in the context of a structured process may result in a significant margin of error. Different biases may cause physicians to overestimate stated prescribing share (HCP-reported adoption), particularly for new novel products.

Physician responses also typically do not account for other stakeholders, such as payers and patients. Payers may manage access to certain products by implementing restrictions or placing them on non-preferred tiers (Payer Access). Patients are bearing an increased burden of pharmaceutical costs as more and more patients are enrolled in high-deductible or high out-of-pocket maximum insurance plans. Determining patient “fill rates," or what percentage of patients pick up the prescription at the pharmacy, is key—particularly in conditions with very expensive or non-covered therapies (patient fill rates). Lastly, because of patient volume or previous prescribing behaviour, some physicians may never be detailed on a new product and, therefore, should be accounted for differently in terms of commercial forecasting (Manufacturer Detailing Reach Adjustment). It is imperative to find the impact of each factor that can be identified and analysed to both arrive at the most accurate forecast and identify potential levers to optimise launch uptake.

Physicians do not treat all patients with a condition with the same therapeutic option. When asking physicians about the potential uptake of a new product, it is important to not only focus on the relevant patient segments but also to consider all current and future treatment options.

An example line of questioning may be:

1. For your last 10 patients, how many would receive (currently available) Competitor A? How about Competitor B?

2. For your next 10 patients, how many would receive Product X (product being forecasted) vs. currently available options (Competitor A and B)?

3. For your first 10 patients in 2 years, after Product Y enters the market and Competitor B goes generic, how would you allocate treatment across all different options?

Using this methodology, the physician is forced to think about the tradeoffs of allocating patients to each of the potentially available products within a relevant patient segment instead of simply estimating the share of patients that would receive the novel product that is being studied. 

Learn more: https://www.pharmafocusasia.com/strategy/pharmaceutical-business-strategy-forecasting