2nd Dubai Marketing Club (Pharmaceutical Forecasting) by Dr.Samer Saeed

Pharmaceutical Forecasting
Dr. Samer Saeed
Regional Marketing Manager
Merck
Marketing Club Instructor

Simple Introduction
Pharmaceutical
Forecasting

Class : June 1999
• Faculty of Pharmacy
Cairo University
2011 – 2016
• TherapeuticArea Manager
• Dubai – UAE
Personal Introduction
2000-2001
• Faculty of Pharmacy
MIU – Cairo
1999
• MSD
Cairo – Egypt
2001-2004
• Medical Rep
Dubai – UAE
2005-2009
• Product Manager
Dubai – UAE
2010 – 2011
• Regional Product
Manager
Samer Saeed
Therapeutic Area Manager - Gulf Region
2017 – Present
• MEA Marketing Manager
• Dubai – UAE

6 Title of Presentation | DD.MM.YYYY

7
Forecasting is a key component of a sound decision-making
process
All pharmaceutical companies need sound estimates of future product revenues in order to
make quality business decisions.
 Choice of R&D projects to fund
 Level of promotional support to apply to a brand
 Choice of products to license
 Maximizing value derived from out-licensing or selling products
Companies that consistently make the best decisions are the most likely to be successful.
To make sound decisions, the appropriate rigor should be applied to developing
the forecast model and accompanying assumptions!

8
The forecast can be extremely simple…
Market Revenue x Market Share = Product Revenue
…or tremendously complex
Patients x Share x Price x Promotional Effectiveness x etc.
The complexity necessary in the analysis is determined by:
• Time
• Availability of data (when limited data are available)
• Phase of product
• Risk inherent in the investment
• Magnitude of the investment
“Everything should be made as simple as possible,
but not simpler.”
Albert Einstein
How Simple or Complex Does My Forecast Need to Be?

Profit and Loss ( P & L )
example : Product Z
10
2014 2015 2016 2017 2018
Units 6,158 7,299 7,623 7,585 7,917
Sales Value EURO 4,175,000 4,473,000 4,701,000 4,881,000 5,098,000
G% 107% 105% 104% 104%
Marketing 432,000 496,800 571,320 628,452 691,297
Marketing % 10.3% 11.1% 12.2% 12.9% 13.6%
FF 630,000 665,000 703,500 745,850 792,435
FF % 15.1% 14.9% 15.0% 15.3% 15.5%
SG & A 1,062,000 1,161,800 1,274,820 1,374,302 1,483,732
Admin 208,750 223,650 235,050 244,050 254,900
COGS 600,405 711,653 743,243 739,538 771,908
TOTAL Cost 1,871,155 2,097,103 2,253,113 2,357,890 2,510,540
IndustrialResult EURO 2,303,845 2,375,898 2,447,888 2,523,111 2,587,460
Result % 55% 53% 52% 52% 51%
Commulative Result EURO 2,303,845 4,679,743 7,127,630 9,650,741 12,238,201
Commulative Result % 223% 316% 409% 487%

Profit and Loss ( P & L )
example : Product Z
11
2014 2015 2016 2017 2018
Units 6,158 7,299 7,623 7,585 7,917
Sales Value EURO 4,175,000 4,473,000 4,701,000 4,881,000 5,098,000
G% 107% 105% 104% 104%
Marketing 432,000 496,800 571,320 628,452 691,297
Marketing % 10.3% 11.1% 12.2% 12.9% 13.6%
FF 630,000 665,000 703,500 745,850 792,435
FF % 15.1% 14.9% 15.0% 15.3% 15.5%
SG & A 1,062,000 1,161,800 1,274,820 1,374,302 1,483,732
Admin 208,750 223,650 235,050 244,050 254,900
COGS 600,405 711,653 743,243 739,538 771,908
TOTAL Cost 1,871,155 2,097,103 2,253,113 2,357,890 2,510,540
Result % 55% 53% 52% 52% 51%

12
• First Question : Calculate Market size ?
Sales Value ?
Across Years ?

13
Forecasting Approaches
Volume-based
Revenue-based
Unit-based
DOT- and Rx-based
Patient-based
Epidemiology-based
Patient flow
Combination volume- / patient-based

14
Market Data by Product
Baseline Trends
Future Events
If necessary Data Conversion to a “Common Unit”
Calculate Market Shares
Forecast
Forecasting Approaches: Volume-Based

15
Positives Shortcomings
Revenue-Based
Availability of the data
Often misses fundamental drivers
(price increases give impression of
market growth)
Forecast model can be relatively
simple for a quick turnaround.
A heavily genericized market looks
unattractive from a sales
perspective, even though millions of
patients could be available.
Accuracy can be good in a one-
branded-product market.
Unit-Based
Total market can be captured
Data through secondary resources
is usually readily available.
Unit data may not be directly
comparable and getting “apples-to-
apples” comparisons between
therapies can be complex
Independent from prices / tenders ..
Etc
Data may include fluctuations not
caused by “final demand” (e.g.,
pipeline fill, speculative wholesaler
purchasing)

16
Positives Shortcomings
Rx-Based
Removes some of the comparison
problems of unit-based approaches
Doesn’t capture all sales
Data might be best indicator of “final
demand”
Data may not be available in all
countries

17
Base Population
Baseline Trends
Future Events
Derive Target Patient Segment:
Determine Base Population
Apply Target Patient Refinement Filters
Apply Treatment Rates
Calculate / Enter Market Share
Forecast
Forecasting Approaches: Patient-Based

18
Simple Model
Treated with Drugs
80% (650)
Treated Patients
90% (810)
Diagnosed 90%
(900)
Prevalence 1%
(1000)
Overall Population
1000,000
Market trends
patients based model

19
Epidemiology
A starting point for patient-based models
Epidemiology Review:
 Incidence
 Number of new cases of the disease
in a given time interval. Who is getting
the disease?
 Prevalence
 Number of existing cases of the disease
at any given time. Who has the disease today?
Remission / Cure
Incidence
Prevalence
Mortality

20
Forecasting Approaches: Combination Patient /
Volume Approach
Epidemiology Market Data
Reconciliation
Baseline Trends
Future Events
Market Forecast
How many patients are
there? Epidemiology
Diagnosed Patients
What disease(s) does the
product treat?
Market Data by Product
Data Conversion
for value / units
Concomitant Use
Factored Out
Which products are used
to treat these patients?
Calculate Treatment Rate
and Market size (units / Value)

Market trends
IMS Data
Unit
s
Year
/10
Units
Year
/10
%V
Units
Year
/11
Units
Year
/11
%PP
G
Previ
ous
Year
Units
Year/
11
%V
Units
Year
/12
Units
Year
/12
%PP
G
Previ
ous
Year
Units
Year
/12
%V
Units
Year
/13
Units
Year
/13
%PP
G
Previ
ous
Year
Units
Year
/13
%V
Units
Year
/14
Units
Year
/14
%PP
G
Previ
ous
Year
Units
Year
/14
%V
Units
Year
/15
Units
Year
/15
%PP
G
Previ
ous
Year
Units
Year
/15
%V
US $
Year
/10
US $
Year
/10
%V
US $
Year
/11
US $
Year
/11
%PP
G
Previ
ous
Year
US $
Year
/11
%V
(Abs
olute
)
US $
Year
/12
(Abs
olute
)
US $
Year
/12
%PP
G
Previ
ous
Year
(Abs
olute
)
US $
Year
/12
%V
(Abs
olute
)
US $
Year
/13
(Abs
olute
)
US $
Year
/13
%PP
G
Previ
ous
Year
(Abs
olute
)
US $
Year
/13
%V
(Abs
olute
)
US $
Year
/14
(Abs
olute
)
US $
Year/
14
%PP
G
Previ
ous
Year
(Abso
lute)
US $
Year
/14
%V
(Abs
olute
)
US $
Year/
15
(Abso
lute)
US $
Year/
15
%PP
G
Previ
ous
Year
(Abso
lute)
US $
Year/
15
%V
(Abso
lute)
M01A
ANTIRHEUMATIC
NON-STEROID
5,555,15
3 100.0
5,857,69
9 5.4 100.0
6,304,07
3 7.6 100.0
7,354,97
1 16.7 100.0
8,178,30
0 11.2 100.0
9,632,62
4 17.8 100.0
#####
### 100.0
#####
### 10.6 100.0
#####
### 6.3 100.0
#####
### 18.3 100.0
#####
### 14.7 100.0
#####
### 8.9 100.0
ARCOXIA 236,926 4.3 283,867 19.8 4.8 327,864 15.5 5.2 314,137 -4.2 4.3 337,164 7.3 4.1 403,587 19.7 4.2
7,665,37
2 14.1
9,427,09
2 23.0 15.7
#####
### 16.2 17.1
#####
### -6.0 13.6
#####
### 4.1 12.3
#####
### 19.8 13.6
VOLTAREN 768,188 13.8 806,001 4.9 13.8 750,728 -6.9 11.9 856,158 14.0 11.6 971,622 13.5 11.9
1,155,44
3 18.9 12.0
9,634,07
1 17.7
9,830,26
8 2.0 16.3
8,671,53
5 -11.8 13.6
#####
### 26.3 14.5
#####
### 21.5 15.3
#####
### -3.6 13.6
CELEBREX 157,820 2.8 186,643 18.3 3.2 189,274 1.4 3.0 247,270 30.6 3.4 306,153 23.8 3.7 339,825 11.0 3.5
6,101,09
7 11.2
6,667,17
7 9.3 11.1
7,126,77
7 6.9 11.1
9,411,32
6 32.1 12.4
#####
### 19.9 13.0
8,761,85
9 -22.3 9.3
BRUFEN 721,031 13.0 770,732 6.9 13.2 796,523 3.3 12.6 855,062 7.3 11.6
1,007,96
9 17.9 12.3
1,247,83
5 23.8 13.0
4,802,18
7 8.8
4,961,97
9 3.3 8.2
5,072,01
3 2.2 7.9
4,996,23
7 -1.5 6.6
5,520,28
8 10.5 6.4
6,520,78
2 18.1 6.9
VOLTFAST 57,591 1.0 98,077 70.3 1.7 129,549 32.1 2.1 186,754 44.2 2.5 233,915 25.3 2.9 319,849 36.7 3.3 878,039 1.6
1,495,28
1 70.3 2.5
1,975,10
2 32.1 3.1
3,225,51
8 63.3 4.3
4,489,71
7 39.2 5.2
6,139,24
1 36.7 6.5
CATAFLAM 301,193 5.4 302,282 0.4 5.2 287,264 -5.0 4.6 315,051 9.7 4.3 337,037 7.0 4.1 382,712 13.6 4.0
3,527,40
9 6.5
3,521,02
7 -0.2 5.9
3,324,16
9 -5.6 5.2
4,185,22
0 25.9 5.5
4,864,58
9 16.2 5.6
4,592,83
7 -5.6 4.9
DICLO 22,965 0.4 106,079 361.9 1.8 148,709 40.2 2.4 169,640 14.1 2.3 232,055 36.8 2.8 258,790 11.5 2.7 349,345 0.6
1,638,37
7 369.0 2.7
2,289,45
7 39.7 3.6
2,555,95
1 11.6 3.4
3,472,55
1 35.9 4.0
3,874,53
4 11.6 4.1
LOFLAM 0 0.0 70 --- 0.0 53,077 75,724.3 0.8 118,538 123.3 1.6 129,098 8.9 1.6 314,625 143.7 3.3 0 0.0 849 --- 0.0 643,036 75,640.4 1.0
1,425,52
7 121.7 1.9
1,572,03
4 10.3 1.8
3,778,19
6 140.3 4.0
OLFEN 589,440 10.6 643,595 9.2 11.0 502,438 -21.9 8.0 610,283 21.5 8.3 701,960 15.0 8.6 624,037 -11.1 6.5
3,547,54
8 6.5
3,862,47
0 8.9 6.4
2,966,44
9 -23.2 4.6
3,568,47
3 20.3 4.7
4,071,61
6 14.1 4.7
3,562,59
6 -12.5 3.8
DIVIDO 125,893 2.3 147,354 17.0 2.5 177,566 20.5 2.8 226,307 27.4 3.1 277,561 22.6 3.4 327,385 18.0 3.4
1,131,07
0 2.1
1,323,86
5 17.0 2.2
1,595,29
8 20.5 2.5
2,014,96
6 26.3 2.7
2,455,91
1 21.9 2.8
2,896,81
5 18.0 3.1

Units
Year/10
(Absolute)
Units
Year/11
(Absolute)
Units
Year/11
%PPG
Previous
Year
(Absolute)
Units
Year/12
(Absolute)
Units
Year/12
%PPG
Previous
Year
(Absolut
e)
Units
Year/13
(Absolute)
Units
Year/13
%PPG
Previous
Year
(Absolute)
Units
Year/14
(Absolute)
Units
Year/14
%PPG
Previous
Year
(Absolute)
Units
Year/15
(Absolute)
Units
Year/15
%PPG Previous
Year
(Absolute)
M01A ANTIRHEUMATIC
NON-STEROID 5,555,153 5,857,699 5.4 6,304,073 7.6 7,354,971 16.7 8,178,300 11.2 9,632,624 17.8
Market trends
Volume – based
IMS Data ph index

Market trends
Volume – based
IMS Data ph index
US $
Year/10
(Absolute)
US $
Year/11
(Absolute)
US $
Year/11
%PPG
Previous
Year
(Absolute)
US $
Year/12
(Absolute)
US $
Year/12
%PPG
Previous
Year
(Absolute)
US $
Year/13
(Absolute)
US $
Year/13
%PPG
Previous
Year
(Absolute)
US $
Year/14
(Absolute)
US $
Year/14
%PPG
Previous
Year
(Absolute)
US $
Year/15
(Absolute)
US $
Year/15
%PPG
Previous
Year
(Absolute)
M01A ANTIRHEUMATIC NON-STEROID 54,382,578 60,156,660 10.6 63,938,311 6.3 75,639,006 18.3 86,771,881 14.7 94,469,777 8.9
Growth rate : 11.7 %
Extrapolate the following years

Market trends
Volume – based
IMS Data ph index
US $
Year/10
(Absolute)
US $
Year/11
(Absolute)
US $
Year/11
%PPG
Previous
Year
(Absolute)
US $
Year/12
(Absolute)
US $
Year/12
%PPG
Previous
Year
(Absolute)
US $
Year/13
(Absolute)
US $
Year/13
%PPG
Previous
Year
(Absolute)
US $
Year/14
(Absolute)
US $
Year/14
%PPG
Previous
Year
(Absolute)
US $
Year/15
(Absolute)
US $
Year/15
%PPG
Previous
Year
(Absolute)
M01A ANTIRHEUMATIC NON-STEROID 54,382,578 60,156,660 10.6 63,938,311 6.3 75,639,006 18.3 86,771,881 14.7 94,469,777 8.9
Growth rate : 11.7 %
Extrapolate the following years
2016 value : 94.46 X 1.117
2017 Value
2018 Value

25
Now that the market is properly defined and
sized… establish baseline trends.
Trending is performed under the assumption that all current market conditions remain
unchanged. The impact of future events will be considered in the next step.
Trending techniques range from simple to complex.
Short term forecasts may require techniques that model short term fluctuations, whereas
longer term forecast’ trending should capture long term trends.
Treatment Rate
0%
10%
20%
30%
40%
50%
60%
70%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Historical Period Forecasting Period

Units
Year/10
(Absolute)
Units
Year/11
(Absolute)
Units
Year/12
(Absolute)
Units
Year/13
(Absolute)
Units
Year/14
(Absolute)
Units
Year/12
(Absolute)
Units
Year/15
(Absolute)
Forecast
Units
2016
units
2017
units
2018
units
2019
units
2020
M01A ANTIRHEUMATIC
NON-STEROID 5,555,153 5,857,699 6,304,073 7,354,971 8,178,300 6,304,073 9,632,624 10,759,641 12,018,519 13,424,686 14,995,374 16,749,833
26
Market trends
Volume – units based
Consider future
assumptions
2016 value : 2015 X 1.117
2017 Value
2018 Value
Months of treatment

27
The Impact of Future Events
Future Events are defined as anything that can affect the market. Future Events
include:
 New product launches
 Changes in labeling for existing products
 Changes in promotion
 Loss of patent protection
 Etc.
When modeling future events, we are attempting to:
 Construct mathematical formulas that properly mimic market behavior
 Retain sufficient simplicity so that users can comfortably utilize the model
Diffusion curves.

28
Product X
15,000 Units
Sales of
$30 million
30% Use for A
60% Use for C
10% Use for B
9,000 Units for
Disease C
$18 million Attributed
to Disease C
Sometimes more complicated
– A key component of properly sizing the market is allocating sales to the particular
market segment within which your product competes.
– This is important because we want to make sure that we properly size the market.
• In markets where drugs have multiple uses, it is easy to overestimate market
size.
• Example: Epilepsy, where drugs like Neurontin® are indicated for epilepsy
but actually have the majority of their use in pain  Forecasting a new
product for epilepsy that is not used similarly for other indications would yield
a vastly overstated forecast!
Market trends
units – based

29
To complete the forecast, the forecasted product patient shares are multiplied by the
trended to treatment rate and projected target patients to yield patients
Patients are converted to Days of Therapy, Units and TRXs using the same treatment
parameters used earlier in the model
Units are converted to sales by entering price assumptions
Step 12: Convert to Patients
Step 13: Convert to Days of Therapy
Step 14: Convert to Units
Step 15: Convert to TRXs
Step 16: Input Price Assumptions
Step 17: Convert to Revenue
Patients = Product Share x Treatment Rate x Target
Patients
Days of Therapy = Patients x (DOT/Month) x 12 x
Compliance
Units = (Days of Therapy) x (Units/Day)
TRX = (Days of Therapy)/ (Days/Rx)
Sales = Units x Price/Unit
Calculating Additional Forecast Output

Units
Year/10
(Absolute)
Units
Year/11
(Absolute)
Units
Year/12
(Absolute)
Units
Year/13
(Absolute)
Units
Year/14
(Absolute)
Units
Year/12
(Absolute)
Units
Year/15
(Absolute)
Forecast
Month
Eq. 2016
Month
Eq.2017
Month
Eq.2018
Month
Eq. 2019
Month
Eq. 2020
M01A ANTIRHEUMATIC
NON-STEROID 5,555,153 5,857,699 6,304,073 7,354,971 8,178,300 6,304,073 9,632,624 10,759,641 12,018,519 13,424,686 14,995,374 16,749,833
Planned Share
10% 15% 25% 30% 31%
Planned Months eq
1075964.1 1,802777.9 3,356171.4 4,498612.2 5,192448.1
Value
$ $$ $$$ $$$$ $$$$
30
Market trends
Volume – units based
Consider future
assumptions
• Insurance restriction
• New introductions

31
Diffusion Curves
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Type 1
Curve A
Curve B
Curve C
Type 2
Launch
Peak Share
(Max)
Uptake Types
Years to Achieve Peak (Max) = TMax
The Diffusion Curve (Bass Model)

32
Immediate Curve Example: Avandia (rosiglitazone) – GSK
Oral Solid / Type 2 Diabetes
Avandia Parameters:
TMax: 3.00 Years (36 Months)
Curve: 1.99 (~Immediate)
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
Jun-99
Oct-99
Feb-00
Jun-00
Oct-00
Feb-01
Jun-01
Oct-01
Feb-02
Jun-02
Oct-02
Feb-03
Jun-03
Oct-03
Feb-04
Jun-04
Oct-04
Feb-05
Jun-05
Oct-05
Feb-06
Jun-06
Oct-06
Feb-07
Jun-07
Oct-07
Feb-08
Avandia Share Avandia Share Trend

33
Lagged Curve Example: Alinia (nitazoxanide) Romark
Oral Solid / Antiprotozoal
Alinia Parameters:
TMax: 4.5 Years (60 months)
Curve: 1.00 (Lagged)
0
1000
2000
3000
4000
5000
6000
7000
8000
9000
Feb-03
May-03
Aug-03
Nov-03
Feb-04
May-04
Aug-04
Nov-04
Feb-05
May-05
Aug-05
Nov-05
Feb-06
May-06
Aug-06
Nov-06
Feb-07
May-07
Aug-07
Nov-07
Feb-08
May-08
Aug-08
Nov-08
Feb-09
Alinia Alinia Trend

34
Examples: Effect of New Indications
Topamax Use in Migraine
0
50000
100000
150000
200000
250000
300000
350000
400000
450000
500000
Jan-00
May-00
Sep-00
Jan-01
May-01
Sep-01
Jan-02
May-02
Sep-02
Jan-03
May-03
Sep-03
Jan-04
May-04
Sep-04
Jan-05
May-05
Sep-05
Jan-06
May-06
Sep-06
Jan-07
May-07
Sep-07
Jan-08
May-08
Sep-08
Month
FactoredTRXs
Migraine TRXMigraine Prophylaxis
Approval 11/2004First Migraine
Publication 7/2000
Migraine Prophylaxis
Submission 12/2002
Various
Migraine
Studies
Published
2001-2002

Product Trends
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Sales (USD 000) 946.00 1,285.00 1,546.00 2,526.72 3,152.00 3,191.00 3,289.00 3,349.00 3,349.00 3,500.00
Market share (%) 47.9% 59.8% 59.5% 70.1% 70.4% 70.0% 70.0% 69.1% 67.7% 70.7%
Rx 49,000 48,000 63,000 79,311 81,500 83,500 85,000 86,000 87,000 90,000
Rx share (%) 45.4% 47.1% 53.4% 56.5% 54.3% 52.5% 50.0% 49.4% 50.0% 51.0%

36
Similar
promotional
support and spend
are expected
Efficacy and side
effects are similar
to existing
products
How can I now my max MS%
Order of Entry
What is order of entry used for?
Order of entry is utilized when a new product launches into an existing
market and the following assumptions are anticipated:
Products with
same MOA are or
will be on the
market

37
• The Zipf’s law: for pharmaceutical products, early entry means higher market Share
• George Zipf showed that many human systems follow the same simple pattern.
• The same law seems to hold, on average for market shares of similar pharmaceutical products launched into
the same market
• Case study: The ACE inhibitors were (in order of launch)
• Captopril
• Enalapril
• Alalcepril
• Delapril
The Zipf‘s law or order of entry

38
Order of Entry
Order of entry market share utilizes historical data.
Order of entry market share was built by Kantar Health from historical data from previously launched
products where all products were considered similar (features and benefits of products do not provide
differentiation, and sales and promotional spend are expected to be similar).
Source: Market Share Rewards to Pioneering Brands: An Empirical Analysis and Strategic Implications
Glen L. Urban, Theresa Carter, Steven Gaskin, and Zofia Mucha
Alfred P. Sloan School of Management, MIT, IBM, Information Resources Inc., and McKinsey & Co.
Management Science, Vol. 32, No. 6, June 1986
Entry Order
1 2 3 4 5 6 7 8 9 10
1 100%
2 58% 42%
3 44% 31% 25%
4 36% 25% 21% 18%
5 31% 22% 18% 16% 14%
6 27% 19% 16% 14% 12% 11%
7 25% 18% 14% 12% 11% 10% 9%
8 23% 16% 13% 11% 10% 9% 9% 8%
9 21% 15% 12% 11% 10% 9% 8% 8% 7%
10 20% 14% 11% 10% 9% 8% 8% 7% 7% 6%

IF you are not the first
Create a new class … and become the first
39

Units
Year/10
(Absolute)
Units
Year/11
(Absolute)
Units
Year/12
(Absolute)
Units
Year/13
(Absolute)
Units
Year/14
(Absolute)
Units
Year/12
(Absolute)
Units
Year/15
(Absolute)
Forecast
Month
Eq. 2016
Month
Eq.2017
Month
Eq.2018
Month
Eq. 2019
Month
Eq. 2020
M01A ANTIRHEUMATIC
NON-STEROID 5,555,153 5,857,699 6,304,073 7,354,971 8,178,300 6,304,073 9,632,624 10,759,641 12,018,519 13,424,686 14,995,374 16,749,833
Planned Share
10% 15% 25% 30% 31%
Planned Months eq
1075964.1 1,802777.9 3,356171.4 4,498612.2 5,192448.1
Value
$ $$ $$$ $$$$ $$$$
40
Eventually
Product sales forecast
Forecasting targets
Consider future
assumptions
• Insurance restriction
• New introductions

P & L
Product Z
43
2014 2015 2016 2017 2018
Units 6,158 7,299 7,623 7,585 7,917
Sales Value EURO 4,175,000 4,473,000 4,701,000 4,881,000 5,098,000
G% 107% 105% 104% 104%
Marketing 432,000 496,800 571,320 628,452 691,297
Marketing % 10.3% 11.1% 12.2% 12.9% 13.6%
FF 630,000 665,000 703,500 745,850 792,435
FF % 15.1% 14.9% 15.0% 15.3% 15.5%
SG & A 1,062,000 1,161,800 1,274,820 1,374,302 1,483,732
Admin 208,750 223,650 235,050 244,050 254,900
COGS 600,405 711,653 743,243 739,538 771,908
TOTAL Cost 1,871,155 2,097,103 2,253,113 2,357,890 2,510,540
Result % 55% 53% 52% 52% 51%

Marketing spending Budgeting
44
There are several approaches you can take to create your budget.
Examples of these approaches may include basing your budget on:
• Percent of projected gross sales.
• Percent of past gross sales.
• Per unit sales.
• Seasonal allocation.
• Projected cash flow.

Marketing spending Budgeting
45
There are several approaches you can take to create your budget.
Examples of these approaches may include basing your budget on:
• Percent of projected gross sales.
• Percent of past gross sales.
• Per unit sales.
• Seasonal allocation.
• Projected cash flow.

Marketing Spending
Presentation title in footer | 00 Month 000046
is Linked to the
product LifeCycle Stage

Launch or which Product lifecycle stage
2015 2016 2017 2018 2019
Sales 1,000,000 1,100,000 1,210,000 1,331,000 1,464,100
Marketing 70,000 75,900 82,280 89,177 95,167
Marketing % 7% 6.90% 6.80% 6.70% 6.50%
Mature Product

2015 2016 2017 2018 2019
Sales 1,000,000 1,100,000 1,210,000 1,331,000 1,464,100
Marketing 70,000 75,900 82,280 89,177 95,167
Marketing % 7% 6.90% 6.80% 6.70% 6.50%
Mature Product
Year -1 Year 1 Year 2 Year 3 Year 4
Sales 0 100,000 300,000 1,000,000 1,400,000
Marketing 90,000 80,000 85,000 89,000 95,167
Marketing % 90000000% 80% 28% 9% 7%
New Launch

2015 2016 2017 2018 2019
Sales 1,000,000 1,100,000 1,210,000 1,331,000 1,464,100
Marketing 70,000 75,900 82,280 89,177 95,167
Marketing % 7% 6.90% 6.80% 6.70% 6.50%
Mature Product (Primary Care)
Sales 0 100,000 300,000 1,000,000 1,400,000
Marketing 90,000 80,000 85,000 89,000 95,167
Marketing % 90000000% 80% 28% 9% 7%
New Launch
2015 2016 2017 2018 2019
Sales 1,000,000 1,100,000 1,210,000 1,331,000 1,464,100
Marketing 109,000 119,900 130,680 142,417 153,731
Marketing % 10.90% 10.90% 10.80% 10.70% 10.50%
Specialty care

51
There are ways to reap enormous
marketing benefits from free activities,
barter, alliances, and public relations.

Budget Distribution by Strategic Imperative in € (000)
Example
52
[CATEGORY NAME]
[CATEGORY NAME]
[CATEGORY
NAME]
[CATEGORY NAME]
[CATEGORY NAME]
[CATEGORY NAME]
Marketing Spending 277 K Euro
Support Efficacy perception
Drive 1st day patient acquisition
Achieve max penetration of RebiSmart device, and
apply MS Dialog
Maximize retention
Demonstrate continued commitment to the MS
community
Develop competitive market accessibility initiatives

Budget calculations
REGION
AAN ECTRIMS Ad. Board EAN e- Brochures design website Speaker Tour #1 Speaker tour #2 DGMs Local Congress Patient Days Nusre training
NO. OF PAX BUDGET NO. OF PAX BUDGET NO. OF PAX BUDGET NO. OF PAX BUDGET pls clnder % (#) % (sales) dnr+hnr Ticket no. cost # cost #
Est. Cost 39,000 Est. Cost 28,000 Est. Cost 12,000 Est. Cost 25,000
QATAR 0 0 1.00 28,000 1.00 12,000 1.00 25,000 2079.2 7% 635.543 11% 9500 6500 3200 4 15000 8000 5000 1
KUWAIT 0 0 4.00 112,000 1.00 12,000 1.00 25,000 7128.7 24% 2138.76 36% 18000 6500 18000 6500 15000 15 40000 15000 2 16000 4
OMAN 0 1.00 28,000 0 0 2970.3 10% 229.258 4% 9000 6500 6000 6 10000 6000
YEMEN 0 0 0 0 2673.3 9% 100.383 2% 6000 18 10000 10000
BAHRAIN 0 0 1.00 28,000 1.00 12,000 1.00 25,000 1485.1 5% 980.214 16% 14000 6500 14000 6500 5000 4 6000 5000 1
U.A.E 0 0 4.00 112,000 2.00 2,000 2.00 50,000 13663 46% 1915.85 32% 50000 6500 Masters 22000 6500 26250 15 50000 18000 5000 1
TOTAL 0.00 0.00 11.00 308,000 5.00 38,000 5.00 125,000.00 0 30000 6000 100,500 32,500 54,000 19,500 61,450 125,000 63,000 31,000

P & L
Product Z
56
2014 2015 2016 2017 2018
Units 6,158 7,299 7,623 7,585 7,917
Sales Value EURO 4,175,000 4,473,000 4,701,000 4,881,000 5,098,000
G% 107% 105% 104% 104%
Marketing 432,000 496,800 571,320 628,452 691,297
Marketing % 10.3% 11.1% 12.2% 12.9% 13.6%
FF 630,000 665,000 703,500 745,850 792,435
FF % 15.1% 14.9% 15.0% 15.3% 15.5%
SG & A 1,062,000 1,161,800 1,274,820 1,374,302 1,483,732
Admin 208,750 223,650 235,050 244,050 254,900
COGS 600,405 711,653 743,243 739,538 771,908
TOTAL Cost 1,871,155 2,097,103 2,253,113 2,357,890 2,510,540
Result % 55% 53% 52% 52% 51%

57
Field force Calculations
FTEs (Full Time Equivalents)
16.6% 16.6%
16.6%
16.6% 16.6% 16.6%
100%
= One Head Count
= One Head Count
= 1 FTE
= One Head Count
= 1 FTE
= One Head Count
= 1 FTE

58
Field Force
FTE (Full Time Equivalents)
DAILY VISITS / FTE 5
FIELD DAYS /FTE 178 ACTUAL FTE
TEAMSIZE (FTEs) NEEDED 3.6 3.6
TOTAL VISITS REQUIRED 3248
CLASS A CLASS B GRAND TOTAL
DOCTORS NUMBER 100 104 204
FREQUENCY / YR 20 12 32
TOTAL VISITS REQUIRED /YR 2000 1248 3248
WORKING DAYS 218
FIELD DAYS 178
VACATIONS 25
WEEKENDS 104
BANK HOLIDAYS 14
SICK 4
TRAININGS 6
CYCLE MEETINGS 10
OFFICE MEETINGS 12
EVENTS 12
OUT OF
FIELD WORK
OFF DAYS
FTE
Country X
WORKING DAYS
Time
alloca
tion
FTE
equivalent
Product X 50% 0.5 FTE
Product Y 35% 0.35 FTE
Product Z 15% 0.15 FTE
Every Head Counts (1 FTE) Split

59
Field Force Costs Calculations
FF Calculations
 Number of FTE X Annual payment
 Management (Medical / Marketing / sales ) X Annual payment
 Senior Management share X Annual payment
Factor in a forecast for Annual increase and team expansions

P & L
cumulative results & Breakeven point
60
2014 2015 2016 2017 2018
Units 6,158 7,299 7,623 7,585 7,917
Sales Value EURO 4,175,000 4,473,000 4,701,000 4,881,000 5,098,000
G% 107% 105% 104% 104%
Marketing 432,000 496,800 571,320 628,452 691,297
Marketing % 10.3% 11.1% 12.2% 12.9% 13.6%
FF 630,000 665,000 703,500 745,850 792,435
FF % 15.1% 14.9% 15.0% 15.3% 15.5%
SG & A 1,062,000 1,161,800 1,274,820 1,374,302 1,483,732
Admin 208,750 223,650 235,050 244,050 254,900
COGS 600,405 711,653 743,243 739,538 771,908
TOTAL Cost 1,871,155 2,097,103 2,253,113 2,357,890 2,510,540
Result % 55% 53% 52% 52% 51%

Cumulative results
and
Breakeven points
61

Product Launches
Break even point
Gross Sales 0 100,000 300,000 1,000,000 1,400,000
Marketing 90,000 80,000 85,000 89,000 95,167
Marketing % 90000000% 80% 28% 9% 7%
New Launch

P & L
cumulative results & Breakeven point
63
Units
Sales Value EURO 0 100,000 300,000 1,000,000 1,400,000
G%
Marketing
Marketing %
FF
FF %
SG & A
Admin
COGS
TOTAL Cost -300,000 -330,000 -360,000 -380,000 -440,000
IndustrialResult EURO -300,000 -230,000 -60,000 620,000 960,000
Result % -299999999900% -230% -20% 62% 69%
Commulative Result EURO -300,000 -530,000 -590,000 30,000 990,000
Commulative Result % -299999999900% -530% -197% 3% 71%

P & L
Did we miss some terms ?
64
2014 2015 2016 2017 2018
Units 6,158 7,299 7,623 7,585 7,917
Sales Value EURO 4,175,000 4,473,000 4,701,000 4,881,000 5,098,000
G% 107% 105% 104% 104%
Marketing 432,000 496,800 571,320 628,452 691,297
Marketing % 10.3% 11.1% 12.2% 12.9% 13.6%
FF 630,000 665,000 703,500 745,850 792,435
FF % 15.1% 14.9% 15.0% 15.3% 15.5%
SG & A 1,062,000 1,161,800 1,274,820 1,374,302 1,483,732
Admin 208,750 223,650 235,050 244,050 254,900
COGS 600,405 711,653 743,243 739,538 771,908
TOTAL Cost 1,871,155 2,097,103 2,253,113 2,357,890 2,510,540
Result % 55% 53% 52% 52% 51%

More Terms
65
 OpEx
 CapEx
 Nett Sales
 Top line
 Bottom line
 Exch Rate (Fx)

Different Example
P&L – YTD Month X
in m€
ACT ACT@OP OP
∆
OP
∆ %
OP LY
∆
LY
∆
% LY
Net Sales 12,4 12,2 16,0 -3,7 -23,4% 11,4 0,9 8,1%
Sales 12,4 12,2 16,0 -3,7 -23,4% 11,4 0,9 8,1%
Com. & porfit share inc. 0,0 0,0 0,0 0,0 0,0% 0,0 0,0 0,0%
Production Costs -2,4 -2,4 -2,9 0,4 -15,6% 2,1 -4,5 -215,3%
Gross Margin 10,0 9,8 13,1 -3,3 -25,1% 13,5 -3,6 -26,7%
Gross Margin in % -19,5% -19,8% -18,0% 18,5%
Mgt - OPEX -7,2 -6,6 -5,1 -1,5 29,4% -5,1 -1,8 35,0%
Marketing & Selling Expenses -4,8 -4,6 -5,0 0,4 -7,8% -4,8 0,1 -2,0%
Field Force -2,6 -2,5 -2,6 0,1 -3,7% -2,6 0,0 -1,2%
Internal Sales Service -0,8 -0,7 -1,0 0,2 -24,2% -0,8 0,1 -10,0%
Sales Promotion -1,4 -1,3 -1,4 0,0 0,0% -1,3 -0,1 7,9%
Medical Activities non R&D -0,2 -0,2 0,0 -0,2 0,0% 0,0 -0,2 0,0%
Other M&S 0,0 0,0 -0,1 0,1 -95,0% -0,1 0,1 -96,3%
Royalty, license & com. exp. 0,0 0,0 0,0 0,0 -100,0% 0,0 0,0 0,0%
Administration -0,1 -0,1 -0,1 0,1 -42,4% 0,0 0,0 59,7%
Other Operating Exp. & Inc. -2,3 -2,0 0,0 -2,0 0,0% -0,3 -1,8 705,7%
R&D - local 0,0 0,0 0,0 0,0 -79,5% 0,0 0,0 -49,5%
EBIT Contribution 2,8 3,2 8,0 -4,8 -60,1% 8,4 -5,4 -63,9%
M&S w/o logistics + L R&D -4,8 -4,6 -5,0 0,4 -8,0% -4,8 0,1 -2,0%
66

I hope I have been of help 
Thank you

2nd Dubai Marketing Club Wednesday 21-3-2018

2nd Dubai Marketing Club (Pharmaceutical Forecasting) by Dr.Samer Saeed

2nd Dubai Marketing Club (Pharmaceutical Forecasting) by Dr.Samer Saeed

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