Old forecasts with new challenges

Forecasting is a fundamental process for manufacturers investing in a drug pipeline. Early forecasts provide the foundation on which organizations can evaluate an asset and justify its development. As launch approaches, forecasts are also crucial for best determining the sales, marketing, and access investments required to meet a product’s full potential.

The methods used to forecast a new pharmaceutical product launch vary, yet, many pre-launch forecasts take a top-down approach to calculate potential volume and sales. Often, early forecasts attempt to wedge together coarse assumptions for market size, competitive landscape, anticipated payer management, and low-sample primary research on physician attitudes and prescribing assumptions. While assumption-driven forecasting techniques may be adequate for therapeutics early in development, they are insufficient once brand teams begin developing strategic pricing, marketing, and sales plans and tactics. As the brands move into the later phases of development, it is critical that they have a more accurate and dynamic forecast from which to prepare for a successful launch.

A comprehensive and dynamic approach to forecasting

IQVIA’s Market Access Strategy Consulting practice has developed a dynamic, U.S.-based forecasting model which accounts for market dynamics as well as prescriber, patient, and payer behavior. This model has the granularity and flexibility required to build complex scenarios which can also support the validation of key brand assumptions. It takes forecasting beyond expected market size to measure the available market, account for patient initiation, and project sales margin.

Measuring Available Market Volume

Market sizing starts by understanding the total number of patients eligible for treatment with the asset. IQVIA’s approach goes further than many top-down approaches to market sizing. Evaluating the total number of patients who fit the clinical profile is still a critical building block; however, IQVIA looks beyond that patient count and evaluates the portion of the population that actually becomes available for treatment with the new product.

Depending on the disease area and type of treatment, this one adjustment can have a substantial impact on the size of the available market. For many diseases, a large segment of the clinically eligible population is already stable on an existing therapy. While these patients may comprise the product’s target profile, stable patients are unlikely to switch therapy. Thus, understanding the potential naïve initiators and switchers help refine the “available” patient population. This difference between total and available market can impact forecasts by millions of dollars, but is also measurable when using a patient-based approach. The creation of more nuanced assumptions about demand generation help improve go-to-market strategies and tactical execution.

Bridging Demand with Patient Initiation

Patient access is another critical factor in a product’s market potential, as it impacts what proportion of the available population is able to initiate therapy. Barriers to access in the form of drug restrictions and coinsurance and/or high deductible benefit design can drastically impact product uptake. A dynamic forecast model should account for the severity and timing of access and patient affordability hurdles at launch and beyond.

Manufacturers can also improve access by investing in payer contracts and patient support programs. Whether it’s a negotiation to remove restrictions, a co-pay card that helps patients offset their coinsurance, or patient services like hubs and nurse educators, there are solutions available to improve patient access and the initiation of new therapy. The interdependence between the quality and cost of access, balancing payer contracts and patient support, is yet another reason for sophisticated forecasting.

Forecasting Beyond Volume to Sales Margin

Although payers have increasingly limited access to new products, launch brands can still achieve high-quality access over time or in the near term through robust patient support investments. However, the cost of quality access can be substantial, which demonstrates the need for forecasts to also consider their gross-to-net impact on the brand. Top-down forecasts often lack visibility into the margin factors that reduce the net revenue a launch product will achieve. While some forecasts make estimates for cost of goods sold (COGs), payer rebates, and even patient assistance programs, the IQVIA approach uses real world payer-and patient-level data to provide the level of accuracy necessary to connect price and margin concessions with revenue potential. The dynamics between these costs and patient access are interconnected, yet again making the case for a patient-based supplement to traditional forecasts.

Forecasting with agility and transparency

A patient-level framework provides the level of detail necessary to pinpoint the individual impact of driving factors, which is necessary for

1. ADJUSTING MODEL INPUTS - Access, margin, and other factors are constantly changing in an uncertain industry, requiring nuance and specificity to adjust forecasts as launch approaches.
2. VALIDATING KEY ASSUMPTIONS - Evidence-based validation of forecast-driving assumptions reduces the risk of overestimating uptake.
3. DIAGNOSING PERFORMANCE - Retrospectively or in real-time, a patient-based approach eliminates the obfuscation that typically makes forecasts difficult to assess.

Forecasting – and launching – in unprecedented times

Supporting a top-down approach with a patient-based model can make launch forecasting more precise, accurate, flexible, and actionable. This is more necessary now than ever as brands identify opportunities or risks in an industry rife with change and instability. Beyond the context of new product launch, patient-based models can also provide the necessary support to anticipate best- and worst-case scenarios around public policy, patient affordability, and more.