Launching a new drug is the costliest activity that can be undertaken by a pharmaceutical company. Nevertheless, half of such launches do not live up to their projected revenues. This is despite numerous years spent on clinical trials and thorough market research and planning.
The reason for failure does not lie in a miscalculation in a single math formula within the projection process. Rather, the real-world variables are involved in influencing the final result including changes in physicians’ behavior, coverage decisions of insurance firms, actions of competitors, and field execution capabilities. The world of modern medicine requires more than conventional approaches to forecasting.
This is why commercial data teams are extremely important for successful companies. These companies monitor their projections and make adjustments based on the latest market trends.
Perceptive Analytics’ POV
At Perceptive Analytics, we do not think forecasts go wrong due to the inadequacy of forecast models. Forecasts go wrong when companies discontinue the forecasting process after launch. Commercial success requires continual validation of assumptions through actual data on adoption by physicians, payer access, prescribing behavior, and competition. It is the companies that succeed by regarding forecasts as a dynamic commercial management process.
Why Do Drug Launch Forecasts Miss Their Targets?
Even sophisticated launch forecasts contain assumptions. The assumptions are based on estimates regarding physician behavior, patient medication procurement process, and reactions of competitors. Market research and data obtained previously can support the assumptions, but things can change quite dramatically after the product launch. Drug companies which do not monitor those changes in real time will probably fail to achieve their revenue expectations.
Factors which make drug launch forecasts inaccurate include:
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Outdated assumptions
Pharmaceutical firms tend to develop their forecasts long before launching a medicine into the market. During that period, patient guidelines, populations and competitive strategies may have changed, thus making the forecast irrelevant.
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Physicians do not switch to using the drug immediately
Some physicians prescribe new medicines right away. Others need time to gather additional information from practice or other physicians to change their approaches.
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Problems with insurance interfere with treatment
Approval procedures, prior authorization, and high copays prevent patients from receiving their prescriptions, even if the drug is better compared to others available.
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Rivalry response
Your competition will not wait until you launch your new product. The company launches new promotions, lowers its prices, or gets approval for new indications, negatively impacting your forecasts.
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Coordination between different departments of the organization will suffer
Forecasting implies perfect coordination between the sales, marketing, and medical departments. In case of any inconsistency, the launch will definitely be affected.
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Forecasting is viewed as a one-time exercise
Many organizations have a model but do not care about it anymore after it was initially built. Effective organizations regularly update their numbers based on prescriptions’ numbers, input from salespeople, and updated insurance plans.
An effective launch does not rely upon a perfect initial forecasting effort. Instead, it depends on continuous monitoring of real numbers and adjustment of your strategies accordingly.
How Data and Analytics Improve Forecast Accuracy
1. Refreshing a Forecast with Real Time Data
Rather than making a forecast once and never updating it, a company has to regularly review its assumptions based on the dynamics of what happens in the marketplace. This includes constantly updating sales forecasts with real prescription data, field intelligence, patient enrollment, and reaction from competitors.
2. Employing Sophisticated Forecasting Techniques
Data forecasting solutions can process much more data than any spreadsheet ever could. Such tools analyze the history of launches, anonymous insurance data, clinical history, and online interaction. When there is enough sales data, a model adjusts automatically to minimize human bias.
3. Improved Spending in Sales and Marketing
In order to succeed, it is essential to communicate with the appropriate physicians using effective messaging. Data analysis assists in understanding which physicians require more clinical data, which online media they prefer, and which regions require more sales representatives. This way, one does not have to waste money blindly but can allocate budget effectively.
Metrics That Tell the Real Story of a Launch
Launch success is about more than just matching a revenue number. Leading teams track a broader set of metrics to understand what is actually happening on the ground.
| Metric | What It Tells You |
|---|---|
| Forecast Accuracy | How close the initial predictions were to actual sales |
| Doctor Adoption Rate | How many doctors are actively writing prescriptions |
| Patient Treatment Starts | How quickly patients are beginning the therapy |
| Market Share Growth | How well the drug is performing against competitors |
| Insurance Coverage | How easily patients can get the drug paid for |
| Prescription Volume | The total number of prescriptions filled |
| Time to Peak Sales | How long it takes to reach maximum sales potential |
| Marketing Engagement | Which digital and sales messages are actually working |
Better Ways to Manage a Launch
Efficient commercial managers see forecasting as an iterative process rather than a one-time project.
Good launch programs should include:
- Constant updating of forecasts through real sales and prescriptions data.
- Direct inclusion of competitive activity into sales forecast.
- Monitoring of physician prescribing and patient enrollments on a weekly basis for six months after launch.
- Implementation of predictive models to recognize sales risks.
- Aligning of sales, medical, and insurance organizations on objectives.
- Tailoring of marketing communications channels depending on how physicians spend time online.
- Performance assessment through daily operations metrics, not through monthly revenues.
How Perceptive Analytics Delivers Smarter Launch Forecasting
With our help, you can transform launch forecasting into a regular process for tracking market performance for life sciences organizations. Perceptive Analytics offers the combination of analytics, prescriptions and industry insights that helps sales and marketing departments monitor launch results, identify any issues timely, and update forecasts as products go live.
1. Forecast Development and Validation
We develop realistic forecasting models using patient numbers, data from previous launches, market research, and sales assumptions. Later, we perform regular validations of these models according to sales results.
2. Commercial Performance Dashboards
Dashboards that help monitor daily launch performance are created by us. You will be able to see forecast accuracy, prescription volume, physician adoption rate, patient starts, market share, insurance penetration and sales force performance in one dashboard.
3. Real-World Data Integration
Integrating prescription trends, insurance claims, patient journey, insurance penetration, competitor behavior, and sales representative feedback provides you with complete insight into your launch performance.
4. Predictive and AI-Driven Analytics
Machine learning and predictive analytics models are used by us to identify demand shifts, monitor drifts from the target in terms of sales, and detect market risks. Thus, decision-makers will be able to prevent any issues affecting sales results in advance.
5. Market Access and Payer Analytics
Insurance approvals, co-pay tier information, prior authorization challenges, and coverage limitations are tracked. These analytics help to understand how insurance barriers impact patient access to your product in numbers.
6. Commercial Optimization
By identifying patterns in the sales data, we assist your sales team in choosing the right physicians to target, optimizing the sales territories, making effective investments in marketing expenses, etc.
7. Continuous Forecast Refresh
We do not limit ourselves to one static forecast but assist in updating it continuously. Our experts will take into account the most recent sales data and changes in the market for you to have the most updated numbers.
By combining advanced analytics and deep industry expertise, Perceptive Analytics is ready to help you achieve greater forecast accuracy and make informed commercial decisions to increase the chances of successful product launch.
Case Study
A specialty pharmaceutical firm found that prescription levels in the first eight weeks were 25% lower than expected, even though physician awareness was high. Through commercial analytics, it was revealed that there were issues with prior authorizations in several large payer plans and not low physician interest, which was the main problem. The firm changed its market access approach and updated its launch assumptions on a weekly basis for the first six months post-launch.
Next Step
For better launch forecasting and achievement of sales goals, life science firms should:
- Consider their forecasts as living and dynamic models instead of static plans.
- Focus on leading indicators such as physician uptake, treatment initiations by patients, insurance and prescription activity instead of revenues.
- Revise forecasts continuously on the basis of sales figures, competitive activities and sales team feedback.
- Align sales, medical and insurance teams in the same launch objectives and metrics.
- Apply data analytics and predictive models to identify sales threats and opportunities before they impact business performance.
Successful launches are impossible without regular updates of forecasts. With the help of data analysis, actual prescription numbers, and industry experience, Perceptive Analytics provides assistance in monitoring of changes and making adjustments to your plan in time.
Do you want to get better forecasts? Contact us and we will show you how our data tools can help you track your product launch and achieve your sales goals.