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Methodology

An overview of our research methods
visiongain’s reports are based on comprehensive primary and secondary research. Those studies provide global market forecasts (sales by drug and class, with sub-markets and leading nations covered) and analyses of market drivers and restraints (including SWOT analysis) and current pipeline developments. visiongain’s analyses are original, benefiting from insight gained through our consulting experts in industry, academia, medical practice and other stakeholders. The analysts also refer to company reports, news and trade articles, public health data, policy documents and other analysts’ views. We conduct primary research when possible by telephone interviews, written correspondence or face-to-face discussions.

A description of factors used in visiongain’s pharmaceutical market forecasting method
When forecasting, the visiongain pharmaceutical analyst assesses percentage growth in sales on a year-by-year basis, assessing the impact of any events or circumstances that influence revenues for that market or market segment. The forecasts can be for individual drugs or markets segments, such as total sales from an emerging technology. That process is made possible through the detailed research, industry/market knowledge and judgement of the analyst. This forecasting process is an accepted practice in our industry. Factors that the analyst takes into account include the following:

Efficacy and safety (as perceived by the prescribing doctor)
This factor relates to how the doctor ranks the product; the central issues are safety and efficacy. Components of this opinion-forming process include comparative studies, specialised journal articles and professional associations on the decision-making processes of doctors for that product. The analyst should therefore grade the potential repercussions of events reported in sources such as company reports, news articles, prescription data and possibly interviews. This factor therefore relates to how prescribing doctors’ perceptions of the drug will change during the year being analysed.

Public opinion
This factor quantifies, in a subjective manner, the effect that relevant news has on the perceived acceptability of the drug vis-à-vis the patients and other stakeholders, e.g., governments and private healthcare providers. Also relevant is the effect of the patient influencing the prescribing doctor, either positively or negatively. The effect of DTC advertising is covered separately. The power and influence of patients has increased significantly over the past 30 years. The analyst may encounter controversy surrounding the safety, efficacy and cost-effectiveness of the drug(s) (e.g., withdrawals in the COX-2 inhibitor class). In other cases, the media provides positive publicity (e.g., ED medications & statins).

Marketing
This factor relates to the effects of promotion on sales of the drug. The most direct and important form of promotion is that of pharmaceutical companies targeting doctors through advertisements and visits from sales representatives (detailing). A secondary form of promotion - direct-to consumer (DTC) advertising – may also increase sales, this time through patients influencing prescribing doctors. DTC advertising through the mass media is currently permitted only in the US, Australia and New Zealand. However, this form of promotion is controversial and subject to strict – and apparently increasing - regulation. Other, less controversial, DTC promotional channels include companies’ Internet sites, point-of-sale promotions and sponsored disease awareness campaigns. These media should also be considered in the analyst’s grading. In this question, the analyst should assess the combined effects of all types of promotion. In the pharmaceutical industry, the size and prominence of a company is often representative of its promotional spending for the drug, which - in turn - has an effect on sales. It is commonly accepted that what makes marketing have an impact in sales is not the amount of it, but whether it is more or less effective than the efforts of competitors.

Disease incidence
This factor relates to changes in the incidence of the disease being treated by the drug that relate to the potential (reachable) market for the drug. This factor does not attempt to quantify changes in incidence per se, but rather changes that will influence the size of the market for that product. When assessing this factor, the analyst should consider the effect that aging populations in the developed world may have on usage of the drug. The analyst should also consider the development of new markets for drugs (e.g. Asia, Latin America & Eastern/Central Europe). This factor also includes the effect that lifestyle-related issues may have on the potential treatment population for the drug (e.g., modern eating habits and the increase in diabetes). Increased prevalence and incidence of diseases covered by the approved indication(s) tend to expand the market for that product, but the relationship is not necessarily a direct one.

Prioritisation by healthcare authorities
This factor relates to how seriously the condition is regarded by healthcare authorities and other important stakeholders, such as healthcare plans. This prioritisation may influence public sector-sponsored campaigns to encourage testing & treatment, as well as the prioritisation of resources to treat these conditions. This factor also incorporates possible expansion of that drug’s sales in developing countries. This uptake of products depends upon the need for treatments, costs of these and the abilities and willingness of authorities and other payers to purchase the products. As in the previous factor, the objective is sales, so prioritisation by a country on a certain disease will mean more resources on it and an increase in sales.

Expansion of indications (approved uses for the drug)
This factor relates to expanded approved usage of the drug. The analyst has to assess a) whether any expansion or contraction of the range of indications will occur and b) the effect of these of revenues. Companies typically develop drugs for a wider range of approved uses (indications) whenever possible. In that manner, companies attempt to differentiate their drugs from others in the market, or even create new market niches. Expanding indications is also a way of defending the branded drug from generic competition after the loss of patent protection. The importance of indication expansion varies, depending upon how well the company can favourably differentiate its product from those of competitors. This success of this strategy is closely linked to the ability of the product to serve previously unmet market needs, as well as the establishment of the drug in lucrative market segments with little or no existing competition, or where successful existing products can be superseded.

Line extensions/reformulations
In the market, line extensions can be very similar in effect to those of expanded indications, especially in their potential to defend the brand from generic competition. The analyst has thus to assess a) whether any expansion or contraction of the range of indications will occur and b) the effect of these of revenues. Typical line extensions include: other dosage forms; altered physical properties (formulations) of the product (e.g., fast-dissolving tablets, delayed-release forms); and further delivery routes (e.g., intravenous forms). The success of this strategy is closely linked to the ability of the product to serve previously unmet market needs, as well as establishment of the brand in lucrative market segments with

Direct competition
This factor considers the dynamics of direct competition in the market. It is important for the analyst to consider the level of crowding in the market, the amount of promotional spending by rivals and the strength of their brands (as perceived by doctors and consumers). Also important here is the extent to which competing brands may be substituted for one another by the doctor (especially taking into consideration switching costs or other barriers to switching brand). It would also be useful to consider any conversion strategy that affects the drug being analysed. This relates to a company’s efforts to move patients from an older drug approaching, or having reached patent expiry, to a newer product - a successor brand. The analyst should therefore assess the extent to which the immediate competitive environment (i.e., in that branded market) will change during the year being analysed.

Conversion strategy
This relates to the existence of a lifecycle management strategy that attempts to shift existing patients from an older drug approaching or having reached patent expiry to a newer product, a successor brand. This strategy is controversial, since the successor may be perceived as being only a modified form of the original drug. Therefore, not all prescribers will be convinced about its superiority over the original product. Furthermore, the clinical advantages and cost-benefit ratio of the successor may be subject to controversy, especially if the cost of the successor is higher and payers’ resources become increasingly stretched. The following grading system takes into account both conversion scenarios:
• An older drug being gradually replaced by a newer product (a negative effect on the revenue of the older product)
• A newer drug benefiting from being the replacement for an established product (a positive effect on revenue of the newer (successor) product.

OTC switching
This factor refers to the development of an over-the-counter (OTC) form of a prescription brand, usually late in its product life cycle. In this manner, the company attempts to maximise remaining revenue from the value of the brand, especially when faced with generic competition for the prescription form(s) of the brand. However, the OTC form can divert sales from the prescription drug, although its generic substitutes can also suffer from that OTC competition. OTC has different impacts depending on the therapeutic area: this is already covered by the parameters. The objective of the grading here is forecasting the likelihood of OTC switching occurring (given historical data, suitability of the drug etc.); and how good the OTC version is at treating the disease, compared with the prescription version.

Other substitutes
This factor refers to other potential competition for the branded drug. Examples include the off-label use of other drugs, alternative therapies, surgery and the use of medical devices (where applicable). There are increasingly close links between the Pharma, diagnostics and medical devices sectors, with products bridging those industries (e.g., theranostics, drug eluting stents etc.)

Generic competition
This relates to the attractiveness of the market from the perspective of generic competitors. Important components of market attractiveness include the amount of revenue generated by the original branded drug and barriers of entry to the market. Blockbuster drugs will be more attractive targets for generics companies than lower revenue products. Also relevant here is the potential for – or existence of – an authorised generic version of the drug, a strategy sometimes used to undermine generic challengers. The analyst should also consider the implications of a competitor’s drug being available in generic form: that situation can potentially erode sales of other drugs in the market. In this section, the analyst has to state whether the product has de facto protection of its intellectual property in all the major geographical markets where the drug has been sold: i.e., the US, the EU & Japan (where applicable).

Regulation of patents and other IP-protective measures is a very complex matter - one that varies between regions and countries. Original pharmaceutical products and variants of these are protected by patents and by data exclusivity that - in principle - exclude generic competition. Nevertheless, generics companies frequently challenge patents, trying to circumvent these restrictions as much as possible. The ensuing legal proceedings often take a long time to resolve. However, deals between branded and generics companies sometimes result from this dynamic environment. It is also important to note that data exclusivity for major geographical markets can sometimes last longer than patent protection there, effectively providing extended protection from generic competition. Products can also acquire extensions to their patent protection on a case-by-case basis. The analyst should therefore refer to resources such as The FDA Orange Book for relevant patent information. The principal geographical markets for the product are considered. It is left to the analyst to decide what exactly constitutes significant patent protection (e.g., does loss of protection in a certain country or region pose a serious threat to the overall branded revenues or exclusivity for that active ingredient?).

Specific regulatory hurdles
This factor relates to actions of the regulatory authorities that affect revenue of the branded drug(s). These regulations primarily concern medical safety and continued approval for marketing the product. The product alone can be affected or it can be affected along with competitors’ products from the same drug class. The effects of these regulatory restrictions on sales may vary from relatively mild (e.g., slight change in labelling or product literature) to very severe (e.g., forced withdrawal of the product from the market). In some cases, this factor can have a positive grading. This event will occur when the regulatory hurdle is removed. Typically, doctors would then prescribe the drug more freely. As this will have a positive effect on sales, that scenario is included in the grading.

What is differentiated, unique and proprietary about our research?
In our analytical reports we cover a wide range of industries and markets in healthcare. We show you future prospects for many commercial areas:
• Novel branded pharmaceuticals – therapeutic applications and drug classes
• Biopharmaceuticals (biologics) and healthcare biotechnology, including drug delivery and other technologies
• Generic drugs, the Pharma supply chain and over-the counter (OTC) medicines
• Outsourced services – clinical trials, Pharma manufacturing and other roles
• Diagnostic tests and instruments
• Medical devices – implants and other products.

There you find revenue forecasts. Our reports analyse and explain commercial prospects at overall world, submarket, national and product level, suiting the topics. That way, you assess opportunities and commercial potentials for healthcare industries and markets. We pack our reports with information to help your work and save you time:
• Access to present and predicted trends, harnessing years of analytical experience and knowledge
• Data and discussions – including our 10-year revenue forecasts – for your research, analyses and decision making
• Tables, charts and lists to benefit your reports, proposals and presentations.

In our investigations you find revenue forecasting, growth rates and market shares. You see qualitative analyses (SWOT and STEP), R&D and commercial news too. The reports harness company and industry literature, outside experts, surveys, public health data and policy documents. You find discussions of technological, commercial and economic issues, with emphasis on competing organisations. Discover their prospects, including reviews of companies. In addition to covering worldwide markets, our analysts show you revenue forecasts and other information for leading national markets. Examples include the US, Japan, Germany, France, the UK, Spain, Italy (EU5), India and China. Our studies give you analysis from primary and secondary research. You receive information found only in our work – quantitative and qualitative analyses with independent predictions.

Many commercial opportunities exist. We show you where these are and explain their significance and potential from this decade onwards. You find knowledge to help you stay ahead.

We look forward to meeting your business intelligence needs for healthcare. Please let us help your work now.

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