Arthur
G. Cook,
Principal,
ZS
Arthur
G. Cook
has been involved in pharma-
ceutical forecasting for over
30 years, working with many
major companies on their
forecasting processes. He has
created forecasts for over 150
therapeutic areas, and has writ-
ten and presented widely on
forecasting, portfolio manage-
ment, market research and
pricing. ZS is a global sales and
marketing firm that special-
izes in a variety of industries,
including the pharmaceutical
industry.
art.cook@zsassociates.com
COMMENT
will be once blockbusters lose that
protection, and b) how they can
protect their bottom lines when
biosimiliars hit the market. Also,
increased demand for orphan
drugs (i.e., drugs that treat rare
diseases) also spurs new challenges
THE HISTORY OF
PREDICTING THE FUTURE
What exactly is forecasting, and how can you be sure you’re
doing it right?
Way;back;in;the;20th;century,;pharmaceutical;companies
used to publish their projections for sales when they launched
a product. There were some major blockbusters (Motrin,
Naprosyn,;Tagamet,;Xanax),;but;also;a;lot;of;busts;(you
wouldn’t recognize the brand names, but they were from
major companies like Merck, Sterling and SmithKline). What
was most consistent about both categories, though, is that
the;projections;were;way;off;–;in;both;directions;–;often;by
factors;of;500;–1000%.;The;upshot;was;that;the;industry;has
become much more circumspect about estimates, largely because of the investors who got burned on the downside.
A lot has changed since then, but we are still in danger of
thinking that the data alone can do the forecasting.
Forecasting;is;about;alternative;futures.;It’s;both;a;science;and
an art, and neither of those was in much demand with respect
to marketing in this industry for a long time. We depended
on innovative products and a robust marketplace to support
our;continuing;growth.;All;that;has;changed,;however.;Here’s
a snapshot of how and when that happened:
1970s AGE OF UNPLANNING– uncomplicated
markets, not much strategic planning
1980S DELUSIONS OF GRANDEUR – burgeoning
global growth, few restrictions
1990S AGE OF DISAPPOINTMENT – economic
contraction, price and competitive pressures,
need for more accurate planning and forecasting
2000S ERA OF REVITALIZATION – more
sophisticated data and forecasting, better
strategic planning
2010S BIG DATA RULES – explosion in data about
patients, clinical trials, product development
for the industry.
The orphan drug market is esti-
mated;to;reach;$127;billion;by
2018,;but;this;is;still;unknown
territory for much of the industry.
New;competition;and;changing
market dynamics associated with
orphan and biosimilar drugs will
challenge pharma’s conventional
ways of forecasting future market
share and adoption.
To prepare your own company for
more intelligent forecasting, you
need to research the most sophisticated tools, methods and analytics available to forecasters, and
devise detailed approaches and
algorithms that can be used in new
product and in-market forecasting.
Forecasting;today;is;necessary
for strategic planning, business
development and portfolio op-timization.;It;has;moved;from
a “numbers only” exercise to a
decision-driven;strategic;tool.;•
