How to create a coronavirus forecast

Corona virus COVID-19 patient-based Drug forecast

For creating a forecast, it is best to divide the forecast into 3 buckets. We will take an example for coronavirus forecast.

1. Part 1: Epidemiology – Identifying patient pool

2. Part 2: a) Market- Identifying patients on competitor the product in market

b) New Product patents- Identifying patients that will move to our product in the market

3. Part 3: Conversion – Converting patient numbers into pills and then pills into revenue.

Another important part of the information you should have is-

1. Country of launch: for example if you are launching in Canada. Each province act as a Country due to its regulator and access law. This will also affect the review based on the population in that country and county the healthcare system.

2. Is there a Tender business

3. Are there any parallel import or export form the country

4. Are there any off label use of drugs in your therapy area

5. Is the government encouraging generics or innovation

6. vial split (make sure one drug is being used by one patient)

7. what are other alternative treatment options available to patients which are not pharmacological

Part 1: Epidemiology – Identifying patient pool•

Understand first do you need to create an incidence-based or prevalence based forecast. • Generally, for chronic indications, forecasters make a prevalence based forecast. but if the disease has an indication that has a different phase of treatment for example in the first phase patient needs A treatment and in other phase, patient needs B treatment. You should consider making an incidence-based forecast. In another example of Coronavirus patient forecast, we will create an incidence-based forecast. Because patients get infected then either survive or die the same year. they do not carry disease for long term

• Because in each phase the patient pool will behave differently and will have different treatment duration.

• Now let us assume you want to create an incident-based forecast for an infectious disease eg COVID-19 in which patients have different dosing frequency and drop off or die within a year.

To start, 1. Take all the population in the country from 5 years back of your current year 2. Split the population into the age group or gender that you need for your forecast. for example, if disease effect people with a certain age group 2-11 and 12-60 and 60+ age group. If this disease does not act on the people certain with age do not include them to the calculation pool. 3. Apply incident rate to that population(Or probability of how many can get infected) 4. Apply Diagnosis rate – of all the carriers of the disease might not show symptoms and will not go for diagnosis 6. Treatment rate 7. Apply any other filter specific to disease 8. By now you will have a baseline of the patient pool that is available in the market for the treatment for your and competitor products. By the end of Part 1, you will know how many active coronavirus forecast patients will be there in the market that you can target.

Part 2: Market- a) Identifying competitor product in market • Understand beforehand, to what ATC class your drug belongs. • Because this ATC class will be your market to a competitor for patient share. 1. Start with all therapy classes that exists in for the treatment of the disease. 2. Have the main idea of what percentage of patients are each therapy class. 3. Then identify what percentage of patents are on each product within those therapy classes. 4. This will act as a baseline for your new product Usually this kind of information can be taken data vendors, for example, IQVIA MIDAS data. By the end of Part 2, you will know how many patients are using a competitor product.

b) New Product patents- Identifying patients that will move to our product in the market Keep in mind you should have the following assumption data in your hand before creating a forecast. 1. Launch date 2. Peak share 3. SOB 4. Tmax 5. LOE date 6. Share post-LOE 7. LOE Curve 8. Drug per patient 9. Cost of Drug 10. Reimbursement date 11. Public/ Private split 12. Compliance rate 13. Market expansion Post and pre-event

Part 3: Conversion – Converting patient numbers into pills/injections and then pills/injections into revenue.

Management Ad hoc request that you will have to address Scenarios High, base, low • Share change • New formulation • Competitor launch • Event due to government regulations (Fast drug approval process)• Reimbursement • Modification in the date of launch • Indication extension • LOE • Price elasticity

Dashboard for presenting the realtime patient numbers:

What are the Main KPI to show in a dashboard for Pharmaceutical product

You can show may measure or Key Performance indicators. I will start with the most important one.

  1. Units (Volume of Drugs sold)
  2. Sale (in Dollar or Local currency of your country)
  3. Market share (in same therapeutical class or in same disease area)

Above mentioned 3 are must-have after presenting these three indicators for all geographies and indication you can consider providing other KPIs like:-

  1. Year on year growth
  2. DOT (days of therapy)
  3. Compliance Rate
  4. Price
  5. Indication share for each year

Above mentioned 3 KPIs for Competitor

What is standard Unit

A standard unit is a number of doses of product sold.

for example for one table Standard unit will be 1SU and for a Parental vial 1 vial is 1 SU and for a ophthalmic drops product, 1 SU will be 0.05 ml dose.

To restate: one dose from any kind of dosage form(formulation) is one SU

Formulation 1 SU =
Ordinary Pill/Tablets 1 Pill
Parenteral Vials 1 Vial
Ophthalmic Drops 1 0.05 ML Dose
This means Standard Unit is the number of doses a pharmacist gives in to the patient for a specific disease or indication. 
Hope this helps you, let me know what more you are interested in. I will post that in my future post. let me know in a comment your view.

How Drugs are reviewed in Canada

  1. Therapeutic Products Directorate (TPD) of Health Canada Review drug before approving them to sale in Country
  2. What is TPD: National authority to regulate, evaluate, monitor safety, efficacy, and quality of therapeutic and diagnostic products. TDP make sure all products meet Food and Drugs Act
  3. Does TPD involves in per commercialization review?: Yes, TDP reviews clinical trial information submitted in a clinical trial application
  4. What sponsor should do after a successful clinical trial?: File for NDS (New Drug Submission) with TPD
  5. How long it takes to review Drug?: 18 months from NDS to TPD marketing decision. This time may vary based on many factors
  6. How to get Drugs currently not available in Canada? Under Special Access Program, a legitimate need is approved by TPD
  7. How TPD monitor post-market approval?: Drug distributor keep TPD informed of adverse effects and new safety information
  8. Who monitors Manufacturing facility?: TPD Licenses most drug production sites and conduct regular inspection
  9. What are steps in Drug review process?:
  • File NDS to TPD
  • TPD Review file
  • TPD assess potential benefits and risks of the drugs
  • TPD review Sponsor information directed to practitioners and consumers
  • TPD provides NOC (Notice of Compliance) and DIN (Drug Identification Number)
Source: PDF

Basic information about Canadian Healthcare and Pharmaceutical

  1. Universal healthcare: Everyone in the country who has Permanent residence or Citizen is covered
  2. County spends 12.5% of GDP on healthcare
  3. 2.6 doctors and 10.3 Nurse per 1000 patients are available in service
  4. Per capita spending around $3000/yr
  5. Life Expectancy ~80 years
  6. Out of 100, 66% Visits to doctors get prescriptions
  7. Most of the Government spending on pharmaceutical is on anti-TNF drugs and Biologics, and anti-Viral drugs. Most public dollar is spent on Rheumatoid arthritis, Crohn’s disease, and Hepatitis C drugs.
  8. Spendings on Statin has been reduced in comparison to previous years.
  9. Government initiative of Pan -Canadian Pharmaceutical Alliance has reduced drug spending by $0.5 billion.
  10. Generic Pricing Policy lead to $ saving and has been offset by spending on Biologics
  11. Public sector spending on drugs is increasing by 4% whereas Private by 2%
  12. Prescription Drug spending split in 2014: $29.4 bn, 43% by Public, 35% by Private, 22% is out of pocket
Source CIHI

Cannibalization of drug in pharmaceutical industry

Cannibalization: while estimating demand forecast for a product if you drug is taking significant share from your existing product that is known as cannibalization.
It could be active cannibalization or passive cannibalization.
Active cannibalization is when you by will move patients from old product to new product. There can be multiple ways to do that for example you can remove your current product from the market and introduce a new product. Active cannibalization of drugs requires marketing and promotional efforts to physicians, pharmacist and healthcare professionals.
Passive cannibalization involves when patients on your old product by will switch to new drug by their choice. During passive cannibalization companies usually don’t discontinue their old medicine from the market
Forecasting medicine demand is very tricky in this case because sometimes new innovative medication doesn’t suit patients so if patient tend to move back to old medicine or drug.
Mainly cannibalization is used as line extension strategy for in-market medicine. Cannibalization in the pharmaceutical industry is used to introduce new formulation example moving patients form 3 dose a drug to replace with one dose a drug.
Cannibalization is also a drug product lifecycle management strategy.
  1. Companies can increase the price of a new product
  2.  To extend patient protection
  3.  To have market exclusivity

What is demand forecasting

Demand forecasting is done to predict future demand for product needs to be manufactured or how many clicks I will get on my website. Basically its anticipation of how much market consumption will be for the product or service in both controlled and non-controlled scenarios.
Units demand forecasting predicts future requirement and need of product mostly based on prevailing trends and historic events.
Sales demand forecasting help corporations assess the need of their product and maintain a proper storage inventory. This helps to avoid overstock cost and out of stock problems.
Mainly used by big firms. In a small business, people know my heart from their personal experience how much they need for next month or next year.
Why product demand forecasting is done, because the manager, a business owner would like to accurately estimate what is the potential of business or product. This make understand where our product is standing in the market in comparison to competitor.
Revenue forecasting based on demand will let you figure out what you will sell and when you will sell it. You can have a clear idea of what to produce and when to produce finally when to ship.
So you don’t overproduce to avoid extra inventory cost or under produce – end up losing some sale and most importantly customer. In sum, demand estimation will help you drive sales and reduce cost and optimize inventory.
Comment, what do you think demand forecasting is and how do you do it in your business?

What is Budget and Forecast



Budget are the numbers to achieve target
Forecast tell what can happen based on certain events predicted or foreseen
Budget is planned events
Forecast is done to predict events that may or may not happen in future
Budget is formal plan
Forecast are informal plans with in organization
Budget is prepared before forecasting and budget is prepared after reviewing strategic plan of organization
Forecasting of units is done before budget exercise
Budget is used to control the organization, and a reliable finalized forecast
Forecast is anticipation of future sales based on events
Budget preparation is done to plan next financial year
Forecast can be monthly, yearly, quarterly. forecast prediction numbers can vary from time to time
Budget is need to anticipate revenues and expenses for next year
Forecasting is done to predict demand and sales
Done before ending of current financial year
Forecasting is ongoing process, done through the year for existing products or new product launch
Budget is assessment done to allocate resources
Forecasting is planning and projecting for non-linear, unexpected or seasonal anomalies.
Budget guide on how much to spend
Forecast help in understand unforeseen opportunity or problems on the horizon
Mostly budget numbers are decided by Top management in organization and once published, organization stick to budget numbers – these number are locked, no scope of  revisiting numbers
Forecast numbers are flexible, company use forecast to tack every month in comparison to their budget target
Budget include, detailed labor, operating expense, revenue, marketing, capital expenditure and factory planning and done at cost center level for next 12 months or longer
Forecast are comparably less granular or detailed.
Forecasting help companies analyze 1) sales are coming faster or slower, 2) any significant change/ event in industry or market place, 3) are expenses are higher or lower
Mainly expected revenue and expense is projected
Forecasting help company understand are they meeting Budget target

In most cases you will find budget numbers, forecast numbers and actual numbers from market will not match.

Feel free to Comments below any business forecasting related topic you would like to have more detail in my future post
Tell your experience how budget and forecast is defined in your organization.