Useful Advices - Business

If we could forecast the future accurately, most of us would spend our lives at a racetrack or casino rather than at work. But forecasting the future is something we all have to do as business owners – either to set internal goals, to obtain addition

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

al financing and for other reasons. Forecasting is, however, one of the most difficult and frustrating things that we have to do and few things cause as much anguish and soul searching as sales forecasts.

So, for a start, forget trying to predict the fu

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

ure and focus on using “informed judgment”. Many attempts at forecasting fail because those involved, from sales reps. to business owners, don’t have the detailed knowledge of their market, their competitors, their customers and potential customers that

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

is essential for making good estimates. They are less than fully informed when they make their judgment of what will happen – and that’s a failure of work and effort, not of technique.

We also forget that we can only control some of the things that hav

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

an impact on our forecasts, for example, the number of dealers we approach, the effectiveness of our promotional tools and our price strategy. There are others factors which directly affect the odds of our success but which are beyond our control. Some

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

are known and can be reflected in the assumptions on which are forecasts are based, for example the price of crude oil, low pay scales for offshore labour. But there are others to which we can only react, for example an unexpected outbreak of SARS.

The

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

most common mistakes, in my experience, are that we overestimate how much we can sell and how quickly we can sell it. Avoiding those mistakes is hard enough when estimating how much more our existing customers will buy of the products they currently use

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

. Adding any “new” dimension just adds complexity.

Forecasting increased sales to current customers should be easy. We either increase the volume of existing products, start selling them products they don’t currently buy and/or increase prices. But

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

f the account managers don’t have the skill - or don’t make the effort - to get as much information about, for example, what is happening in the customer’s own business and how that affects our offering to them, we will be trying to forecast with less than

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

detailed knowledge. So, we can’t make informed judgments - fertile ground for overestimating what can be sold.

What happens if, for example, we’re going to start selling an existing product in a new geographic market? If our competitors already offe

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

a product in that region/province/country, how much of our sales will come from the market share we’ll take away from them and how much will come from the continuing growth of the market? To begin, we must understand how our product quality, lead times and

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

prices compare with our competitor’s and how much it will cost to get our message heard over their promotional “noise”. We can do some simple, inexpensive research to gain the detailed knowledge required to answer those questions.

When it comes to takin

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

g market share away from competitors, we have to make 2 sales. Firstly convince the customer to stop buying from our competitors and then convince them to buy our product - which is untested in this marketplace. But for most business owners, who are nat

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

ral optimists and driven, type ‘A” personalities, it is not difficult to underestimate how long this will take!

Estimating the sales that will come just from market growth may seem easy by comparison. All we have to do is to convince the remaining d

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

istribution channels to sell our widget - make 1 sale instead of two (always assuming our competitors have left some distributors for us). But estimating how long our new distributors will need to ramp up requires information to help us assess how effective

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

the distributors will be. We also want our share of the market to grow at least as quickly as the market itself. The future market growth rate can be forecast using the actual growth rate for the last 2 or 3 years (either as is, or adjusted upwards or downw

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

ards). The rate at which we grow depends on how good a Marketing plan we have. Developing an effective Marketing plan requires informed judgment. Anything less, combined with that optimistic approach of the entrepreneur, will, once again, result in overesti

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

ates.

Here’s a final piece of advice. Even if you’ve worked hard and spent time gathering detailed knowledge which you used to make informed judgments, don’t stop when you develop a “final” set of numbers. Unless you’ve been unusually pragmatic in a

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

rriving at this first forecast, call it your best case. Now think of the things that are most likely to go wrong, assume that they will, change your spread sheets accordingly – and call that your worst case. Finally, it’s unlikely that everything will go ag

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

inst you but it’s equally unlikely that everything will go your way so take a third approach, which avoids either of the extremes, run the numbers again – and call that your most likely case.

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tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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Useful Advices - Sales Forecasting: A Few Tips To Make It Easier

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