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Methodology

Research Methodology

Our healthcare market research reports and other insights and consulting publications are carefully reviewed and scrutinized by the senior management team in an effort to ensure that research methodology is sound, all information provided is accurate, analyst assumptions are carefully documented, and conclusions are well-supported.

The global market size and share for a given product, technology, service or geography category is estimated using the following three-step approach: data collection, data analysis and calculation, and data adjustment.

Updated Market Data Matrix Available

  • Global Industry Analysis: Market size, market share, market volume, market growth, market trends, and market forecast.
  • Epidemiology data: Historic and forecast data on prevalence and incidence by country, disease, injuries, risk factors, etc.
  • Market value data: Market size (revenue $million, 2017-2025), market forecast (%CAGR, 2019-2025), market share (% share, 2018) by competitors, geography, and other market segments.
  • Market volume data: Market volume by country, therapeutic drug, medical device, hospital equipment, diagnostic tests, and surgeries or procedures (number of units/procedures in millions).
  • Clinical trials data: Clinical trials by phase (I to IV), agency (NIH, industry, others), intervention (drug, device, combination product, diagnostic test, procedure), applicant or sponsor, country, years of start and completion.
  • Premarket notification 510(k) data: US-FDA approved class II medical devices by applicant or company, therapeutic area, submission type, decision code, and year of approval.
  • Premarket approval (PMA) data: US-FDA approved class III medical devices by generic or trade name, applicant or company, therapeutic area, and year of approval.

The Three Stages of Research Methodology

1. Data Collection

  • Data collection is carried out by identifying inputs having larger impact on price and volume estimates, with an additional focus on variables that impact the magnitude of end-market estimates, such as distributor mix or product adoption rates.
  • The common variables used for market sizing include: Procedure volume or disease incidence, unit volume, average selling price, channel mix, product penetration / adoption, and product mix.

Market-specific data points are collected using the following external and internal sources:

  • External Sources
    • Verified 3rd Party Data – Consortium data; product shipment or import data
    • Secondary Research – Published reports; industry association research
    • Primary Research – Targeted surveys or interviews in key markets
    • Public Statistics – Health & macroeconomic data
  • Internal Sources
    • Front line Surveys – Surveys of market-facing personnel to measure pricing, share estimates, etc.
    • Local Estimates – Internal estimates using historical sales data

2. Data Analysis and Calculation

The data analysis and calculation methods are based on the source of the inputs such as, verified third-party data or secondary research, targeted primary research or internal surveys, publicly available health and macroeconomic data, internal estimates for historical sales, end market pricing vs. distributor pricing, and secondary research for pricing estimates.

Estimation of Market Size

  • Market segmentation by dividing the market into distinct subsets, which exhibit minimum overlap. The market sub-segments include technology, product type, applications, end users, and geography, etc.
  • Identification of companies serving the market, perform specific company research and extracted data on relevant segment revenue streams. In the bottom-up approach, we estimate the market size based on company revenues (considering 2016 and 2017 as base years).
  • Analysis of industry-specific market reports that include the relevant products and/or services. In the top-down approach, we base our market size estimation on the analysis of industry-specific market reports.

Estimation of Market Share

  • Expert opinion
  • Extrapolation (statistical analysis of the market or of analogous markets)
  • Econometric methods (using relative prices, advertising, and product features)
  • External Sources
    • Verified 3rd Party Data – Adoption of inputs with minor adjustments for competitive share, markets served, etc.
    • Secondary Research – Adoption of inputs with adjustments for methodological issues
    • Primary Research – Cross-reference with other sources to refine inputs
    • Public Statistics – Regression or extrapolation
  • Internal Sources
    • Front-line Surveys – Cross-reference with other sources to refine inputs
    • Local Estimates – Adoption of inputs, with action plan for additional verification

3. Data Adjustment

Finally, the market size and share estimates are adjusted following key inputs through primary research – interviews with KOLs, industry experts, country managers or regional leaders, etc.

The Bottom-Up and Top-Down Approaches

Bottom-Up Approach

  • A bottom up analysis is calculated by estimating potential sales in order to determine a total sales figure. The analysis evaluates where products can be sold (e.g. Distributors, Retailers, Pharmacies, Hospitals, Online, etc.), the sales of comparable products, and the slice of current sales, considering their relevant prices.
  • Secondly, in the bottom-up approach, market size is estimated based on cumulative company revenues (considering 2016 and 2017 as base years).
  • Based on each company’s product and service offerings, rough estimates of the percentage of revenue on relevant products, services and technologies is calculated.
  • For many private companies, where revenue information is not easily available, their contribution to the total market size is considered relatively modest. 
  • Extrapolation methods use historical data on the series of product sales followed by exponential smoothing on the recent data to “smooth” out seasonal and/or cyclical fluctuations to predict the trends’ direction.

Top-Down Approach

A top down analysis is calculated by determining the total market, then estimating the share of that market. In the top-down approach, existing industry-specific market reports are analyzed and revenue percentage is estimated based on their products and technologies, as well as market size forecasts and annual growth rates.

Valuation of Pipeline Drug Candidates (including for rare diseases)

  • Epidemiology/Patient-based Sales Forecasting
  • Drug Utilization and Pricing Patterns Analysis
  • Global Market Valuation of Pipeline Drug Candidates
  • Global Market Valuation of Orphan Drug Candidates

Epidemiology-based Forecasting Model

This model estimates the population with a certain condition, based on prevalence and incidence assumptions. It can forecast the number of customers for a product or service, based on current customer base and expected new customers. It takes the current population information as well as expected future changes in the marketplace. It can also be used to forecast a new product’s performance.

Market Size Estimation

  • Geography Segmentation by Region and Country: North America (U.S., Canada), Europe (U.K., Germany, France, Italy, Spain), Asia Pacific (Japan, China, India, South Korea) , Latin America (Brazil, Mexico) , Middle East & Africa)
  • Incidence and prevalence of disease or condition within a select category is identified and a detailed patient pool segmentation is carried out to accurately quantify the target patient population. Reliable data is collected from government sources, prominent organizations and foundations, medical literature, proprietary market research and companies developing drugs for the indication. Extensive secondary research is conducted, and data sources for multiple data points are triangulated.

Patient Share Estimation

  • To assess the peak patient share estimate, either attribute analysis or calibration, primary market research or conjoint analysis is conducted. To determine the patient share through the entire life cycle, mathematical modeling of the adoption curve or an analogue analysis is used.
  • The number of patients being treated or diagnosed and the number of patients eligible for treatment by the specific drug candidate are determined. The targeted population growth is estimated with respect to specific demography, past changes in rates, and estimates in the changing demographics of a country that would impact future disease rates.

Market Share Estimation

  • The current market share of these drugs is determined by dividing the patients treated by the patients eligible. There are several ways to compare market share across drugs. The number of patients treated are divided using different denominations of patient groups within: total treated population, eligible population, drug class, and marketed products.
  • Dividing by the total patient population provides the penetration of a drug or group of drugs relative to the total addressable market. This determines the current state of the market and the opportunity that exists for newer drugs to either grow the market or take share from current treatments.

Conversion Parameters

  • Robust methodologies have been developed to conduct deep dive into all the conversion parameters, such as theoretical number of doses per year, compliance, price per dose, entry of new players, Genericization and patent expiry etc. For drugs still in development, the price of similar approved drugs are used to determine if the drug should be priced at an equivalent value, at a premium, or at a discount.
  • By combining the price of the therapy and the proposed dosing regimen, pricing and revenue scenarios on a per-patient basis are developed. All these inputs are usually client driven and convert the patient share into sales figures.

References:

  • Kalyanaram,”The order of entry effect in prescription (Rx) and over-the-counter (OTC) pharmaceutical drugs,” International Journal of Pharmaceutical and Healthcare Marketing, 2008, pp. 35-46.
  • Hans Bauer and Marc Fischer, “Product life cycle patterns for pharmaceuticals and their impact on R&D profitability of late mover products,” International Business Review, 2000, 703-725.
  • Establishing a Reasonable Price for an Orphan Drug. Office of Health Economics, UK (2018).
  • Estimating the clinical cost of drug development for orphan versus non-orphan drugs. Orphanet Journal of Rare Diseases 14:12 (2019).
  • Evaluation of Specialty Drug Price Trends Using Data from Retrospective Pharmacy Sales Transactions. Journal of Managed Care & Specialty Pharmacy, Vol. 22, No. 9 (2016).
  • Trends in clinical success rates and therapeutic focus, Nature Reviews Drug Discovery 18, 495-496 (2019).
  • Clinical Development Success Rates 2006-2015, BIO Industry Analysis (2016).
  • Clinical development success rates for investigational drugs. Nature Biotechnology volume 32, pages 40–51 (2014).
  • Launch Excellence V Surviving and thriving when launching in an increasingly specialized world. QuintilesIMS (2017).
  • The Current Status of Drug Discovery and Development as Originated in United States Academia. Clin Transl Sci. 11(6): 597–606 (2018).

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