Orphan drug manufacturers can boost confidence in forecasts with more transparent, data-driven models

Share on facebook
Share on twitter
Share on linkedin

Sales forecasts often prove the old adage, “Garbage In, Garbage Out.” Fortunately, the amount of helpful patient-level data – combined with recent developments in analytics software and marketing research – gives every company the tools it needs to forecast sales accurately. Think “Gold In, Gold Out.”

Despite that progress and potential, however, companies remain unsure of their ability to predict how much they’ll sell where, when and to whom. And they often face great pressure from boards and investors to get these predictions right. After all, reliable forecasts can help maximize therapy potential.

This is especially true when developing niche therapies to treat fewer than 200,000 potential patients in the U.S. Our recent survey of orphan drug manufacturers found that 43% of respondents lacked confidence in their forecasts. Another 43% were only “somewhat confident.” And with good reason:

  • 54% find it challenging to determine the addressable patient population;
  • 65% of respondents find it difficult to determine the product’s time to peak; and
  • 64% of respondents find it challenging to identify market or patient share.

This doesn’t need to be the case, though. Here are three steps companies can take today to build confidence in their forecasts.

1. Take a few looks – now and then – before you leap.

Commercial teams that conduct multiple iterations of the forecast will be more confident in their operations decisions. This requires a shift in mindset from a “one and done” approach to forecasting to a more iterative process.

Companies can start by conducting forecasts using results of clinical trials – typically one year or six months prior to launch. After launch, companies revise the forecast quarterly or annually and account for any unexpected market events. These can include when a competing product is no longer on the market, if a product has an unexpected clinical outcome or when the FDA adds a black-box warning to a product label.

In our survey, some manufacturers reported that they conduct multiple patient journeys/patient flows throughout the product development lifecycle. These frameworks provide important insights to inform the forecast, especially prior to launch. Still, since nearly half of manufacturers lacked confidence in their forecasts, we need to dig deeper to find the shortfalls.

Developing multiple iterations of the forecast goes hand in hand with pressure testing assumptions. Pressure testing can help companies determine blind spots in the forecast model, as well as the impact of each assumption on the overall forecast. These include variations in the timing of launch, the number of prescribing physicians and the impact of various marketing strategies on therapy performance. Conducting a series of pressure tests enables commercial teams to select the most effective go-to-market strategy.

To better inform forecasts, gather data and conduct research early in the product development lifecycle. Since many orphan drug manufacturers have little data prior to launch, commercial teams often begin by generating their own data and triangulating with sales and claims data to validate and inform a pre-launch forecast. After launch, the company can incorporate a richer compilation of data sources and perspectives to create a more robust forecast. These can include insights based on actual patient and physician experiences, dynamic sources of patient, prescription and claims data, patient experiences from physician’s notes, as well as patient blogs and personal social media updates.

2. Conduct research early – and often

Life sciences companies that conduct marketing research studies equip commercial teams to create a dependable forecast and better inform patient journey studies. Commercial teams that conduct marketing research early in product development – in the form of qualitative and quantitative research – can better manage available resources and more effectively position the product in the marketplace. The sales force can provide a boots-on-the-ground perspective that can play a key role in physician profiling and data validation. Commercial teams can analyze this research for patterns in data to get more granular with patient journey studies and better predict a therapy’s future performance.

To better inform the forecast and help guide marketing activities, companies can map out patient journeys – from an individual’s symptoms to diagnosis and treatment. Patient journey studies help orphan drug manufacturers maximize commercial potential and increase the commercial team’s confidence in its predictions. Life sciences companies that invest in detailed patient journey analyses and incorporate multiple data sources can better identify potential roadblocks and influence patient behavior. The majority of orphan drug manufacturers conduct multiple patient journey studies at various stages of commercialization, according to our survey. Companies that take this initiative appear to achieve greater confidence in the quality of their forecast outcomes.

Despite clear benefits of marketing research and patient journey studies, some companies may not embrace marketing research to its fullest extent. According to our survey, 30 percent of respondents said they have limited resources to conduct marketing research. This means that they may not have a dedicated marketing research or marketing analytics team to help develop forecasts or patient journey studies. The majority of companies, however, understand the business case to support additional research and richer data to inform the forecast. It’s important to educate companies on ways to conduct more robust forecasting and deepen their forecast throughout the product lifecycle.

3. Open the tent to more perspectives

Life sciences manufacturers should task team members from various areas of operations to play a role in developing the forecast. These individuals draw on their own assumptions and experiences to identify where therapies may exceed expectations – or come up short. Multiple perspectives can help increase the overall team’s confidence in forecasts. For example, market access teams will understand challenges the therapy will face during commercialization. Marketing researchers can provide insights into the attitudes and beliefs of physicians, payers and patients. The sales force ensures the forecast reflects market events and any potential new entrants to the therapy area. Seasoned, senior executives understand which assumptions matter to potential business partners and encourage the team to incorporate those into the forecast. Incorporating this information ensures companies can address these challenges prior to product launch.

Trust the data

Orphan drug manufacturers will always be strapped for resources. But capitalizing on the data and analytical capabilities available should help overcome their lack of confidence in forecasts and better inform commercial operations. A more transparent, data-driven approach to forecasting can help companies create more reliable forecasts and increase their confidence in predictions on therapy performance.

Authors

Steve Trokenheim

Steve Trokenheim is a partner at Beghou Consulting. He works in the firm’s Evanston, Illinois, office.

Dan Wetherill

Dan Wetherill is a partner at Beghou Consulting. He works in the firm’s Princeton, New Jersey, office.