Using Market Models To Forecast Demand For Ethical Pharmaceuticals

USING MARKET MODELS TO FORECAST DEMAND FOR ETHICAL PHARMACEUTICALS By Michael Latta Explains in detail how market models can be used in the pharmaceutical industry to get a better handle on forecasts … one should prepare forecasts under different scenarios such as base, upside, downside, and worst case market conditions … before preparing final forecasts, make sure one has the approval of management regarding final assumptions and the market model used. Measuring and forecasting unit demand has been approached in many ways within the pharmaceutical industry. Most companies select a methodology and stick with it even though it may not be accepted or understood by marketing managers. In some companies, the marketing team has its annual bonus tied to the accuracy of the forecast with a window of error of 5% for an annual estimate. In many cases, the more sophisticated approaches (i.e., exponential smoothing, Box-Jenkins, conjoint modeling, or neural networks) are not understood by marketing management, or the forecaster does not have sophisticated statistical programs such as Statistical Analysis System© (SAS), Statistical Package for the Social Sciences© (SPSS), or DynaMind© ...