How to use it
- Enter the population of the market you are sizing: a country, a region or the adults in an age band.
- Enter the prevalence of the condition and, step by step, the share diagnosed, treated with a medicine and treated in your drug class.
- Enter your brand’s share of the class: today’s share, or the share you plan to reach.
- Enter compliance, the days of therapy a year and the price per day, then read the value of the class and of your brand.
- Change one assumption at a time to see which one moves the answer most. That is the one to research properly.
How the method works
Patient-based, or epidemiology-based, sizing builds the market from the number of people who could use the medicine and narrows it step by step to the people who actually do. Arthur G. Cook describes this patient flow approach in Forecasting for the Pharmaceutical Industry (2006), alongside forecasts built on sales trends. The two methods answer different questions: the patient funnel shows where the market is lost, while sales trends show where it is going.
A worked example (fictional)
The calculator opens with a fictional example. A population of 10,000,000 with a prevalence of 8% gives 800,000 people with the condition. If 60% are diagnosed, that is 480,000; if 70% of those are treated, 336,000; and if 40% of the treated are in your drug class, 134,400. A 15% share of the class puts 20,160 patients on your brand.
At 65% compliance, 365 days and 2.50 a day, each treated patient is worth 0.65 x 365 x 2.50 = 593.13 a year. The class is worth 134,400 x 593.125 = 79,716,000 and your brand 20,160 x 593.125 = 11,957,400.
Read the gaps, not only the total. Here 320,000 people have the condition but no diagnosis, a disease awareness task. Another 144,000 are diagnosed but untreated, a job for the medical team and the field force. Choosing which gap to work on is a segmentation decision; see segmentation and targeting in pharma.
Limits of the method
- The answer is only as good as the weakest rate in the funnel. Note the source and year of each number.
- It sizes one year at one point in time. For a launch, run it for each year with the share you expect to reach.
- It assumes one price per day. Where pack sizes, doses or channels differ in price, size them separately and add them up.
- It does not model competitors entering or leaving, generic entry or a change in treatment guidelines; for how loss of exclusivity changes the curve, read the pharmaceutical product life cycle guide.
Frequently asked questions
What is patient-based market sizing?
It sizes a medicine's market from the number of patients rather than from past sales. You start with the population, apply the prevalence of the condition, then the share diagnosed, the share treated, the share treated in your drug class and your brand's share. Multiplying the patients by the days they actually take the medicine and the price per day gives the value.
When should I use a patient-based model instead of sales data?
Use it when sales data is thin or missing: a new launch, a new indication, a new country, or a category where audit data does not cover the channel. When good sales data exists, use both and reconcile them; a large gap between the two usually points to a wrong assumption in the funnel.
Where do I find prevalence, diagnosis and treatment rates?
Prevalence comes from published epidemiology: national surveys, the WHO, disease atlases and peer-reviewed studies for the country. Diagnosis and treatment rates are harder; look for national studies, guideline documents and specialist interviews, and treat them as assumptions to test. Write the source and the year next to each number.
Why does compliance matter so much?
Many patients do not take every dose or stop after a few months. A model that assumes full compliance can overstate the value of a chronic market considerably. Compliance turns the patients on treatment into the days of therapy actually bought.
Can I use it for an OTC product?
Yes, with care. For an OTC product the funnel is people with the need, people who self-treat, people who buy in your category and your share. Use the days of one course times the courses a person buys a year, and the consumer price per day.
Building the case for a brand? The pharma brand plan guide shows where the market size goes in the plan, the pharmaceutical pricing strategy guide covers the price per day, and the contribution margin calculator checks whether the volume pays. The Saudi pharmacy market statistics and GCC consumer health statistics pages have sourced population and prevalence figures to start from.