At Camargo, we can help clients evaluate the market potential of their proposed drug product by examining factors that might influence the resulting medical position at the time of product launch. When desired or needed for potential fund-raising, we can also perform a full marketing forecast. One aspect of this is to look at market size.
The ROI of any project depends on the cost and time to reach the market and the revenue over time from the market. Market revenue includes number of scripts multiplied by price per script less several expense factors. Let’s focus on the potential scripts in this post.
You can estimate the potential script activity to ascertain what the eventual market size might be. A market assessment is comprised of qualitative and quantitative studies. These studies examine and then quantify the potential market size to obtain the following inputs.
- Determine the incidence and prevalence of the targeted treatment area in their practice. Incidence is frequency of development of a new illness in a population, while prevalence is the current number of people suffering from an illness in a given year. This number includes all those who may have been diagnosed in prior years, as well as in the current year. Coupled together, this number represents the entire population of patients for which the drug could be prescribed.
- Determine how many patients the physician sees with the disease. This data is also aimed at determining what portion of patients might seek treatment.
- Determine the current treatment options. This is straightforward if the proposed therapeutic target has existing drug products. For unmet needs, we must rely on the number of cases to treat.
- Determine potential replacement of current therapy with proposed drug product. Physicians are challenged with a proposed product profile and asked if they would substitute.
- Determine the number of physicians treating the patients.
- Determine the number of current prescriptions for the current therapies. This data is obtained from databases maintained by industry prescription surveillance companies, such as IMS.
As can be seen, much of the data above is objective. However, it is based on sampling and projection and thus subject to challenge. The major subjective number is the percent penetration – the substitution of current therapy by the physician. Market penetration is ideally a function of the improvement of the proposed product over the current product. In practice, the skill of the sales force, advertising to consumer and other marketing can have a profound effect on the ultimate revenue of the product.
The above inputs are not exhaustive in market forecasting. It is also important to consider potential changes to medical practice, new product introductions and formulary status, among others.