Forecasting for the whole product life cycle
Wa el Hashad, vice president at Boehringer Ingelheim, urges forecasting flexibility throughout the life of the product.
By on May 10, 2010Wa el Hashad, vice president at Boehringer Ingelheim, urges forecasting flexibility throughout the life of the product.
Inadequate forecasting throughout the product life cycle can lead to a lot of wrong decisions, according to Wa el Hashad, vice president at Boehringer Ingelheim. Incorrect assumptions can cause a product to be shelved when it fails to perform as predicted, for example. Or, we might under- or over-invest in it.
Forecasting is a combination of art and science, El Hashad explains, and if you have a product in early development now you need a vision of the market in 2020 or even 2030. The assumptions we make about that vision can make a huge difference to the accuracy of forecasts.
It is also vital to be clear as to who owns the forecasting process. El Hashad feels strongly that it should be the marketing group working with line management. He defines some key criteria for forecasts, with accuracy and purpose high on the list. The type of product also needs to be considered. You would not do similar forecasts for new molecules and line extensions, for example.
Target patient profiles
In phase I and phase II development, it is crucial to define the target patient profile accurately, El Hashad asserts. He gives the example of type II diabetes, where you might want to narrow the population by including only patients with cardiovascular or other co-morbidities. This approach will give you a more accurate forecast.
So will many other factors. For example, it may seem obvious to consider the potential indication, but what about any others apart from the main one? Sometimes, we don't start the life cycle management until later in development, El Hashad says. He advises planning for this in phases I and II.
The competitor landscape
The marketing environment is changing rapidly, so we need to have a projection of what the environment will look like at product launch and beyond. Similarly, it is of little value to map out the current competitor landscape. You really need to know what will be out there at product launch, and the laboratory research people can help with this, as they know what is in very early development.
Pricing is, of course, a major consideration, and differentiation from potential competitors will be a big factor in this. Here, El Hashad recommends close collaboration with health economists.
Once into phase III, the first step is to refine the target patient population. What indications will be introduced, and in what sequence? This will have further impact on pricing decisions, El Hashad explains.
All the other assumptions will also be revisited. Environmental trends will be clearer at this stage, as will the potential competition. Will you be first, second or third to market? Phase II outcomes will help with clinical differentiation, and you will be able to redraft the product labeling.
Dialogue with payers
El Hashad suggests that opening a dialogue with payers before starting phase III can be very useful, as it guides pricing and positioning. But he warns that these actions do not define a single forecast, and it is important to model a number of scenarios.
The final part of this stage is to estimate the probability of technical success and to make a recommendation as to marketing policy for the product.
At the end of phase III, say, 12 to 18 months pre-launch, we should be able to finalize the product profile. Several other assumptions can be finalized, particularly the timing of the launch.
This can make a huge difference to both the short-term and long-term forecasts, says El Hashad, especially if you need to synchronize with the review cycles of managed care organizations in the US.
Market access
Obviously, if your indication is seasonal, this also needs to be considered. The competitor landscape should be crystal clear at this stage, and clinical differentiation will be revisited. Market access strategy will be finalized, and major issues such as co-payments and prescriber behaviors analyzed.
Of all these factors, El Hashad highlights market access as needing special attention large numbers of patients may be denied access for various reasons, so they should not go into the forecast.
El Hashad clarifies how forecasting techniques are different post-launch. These include trend analysis and use of analogues. But relying on the past may not work, because you may have to adjust for a different environment. He picks out length of therapy as an important factor, linked to patient adherence programs.
Forecasting assumptions are critical, he concludes, and you need to be flexible in using different approaches throughout the life of the product.