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Article: Assessing demand in emerging markets

Jennifer Redfearn, January 2021

Assessing demand in emerging marketsWe are often asked to conduct demand assessment studies in order to estimate the interest and likely uptake of a product prior to launch. The findings usually contribute to a wider market forecast. We use a number of market research tools to conduct these effectively, including:

Simple product profile testing
The product description is presented and questions are asked around likelihood to purchase or prescribe and to evaluate what percentage of patients will be amenable.

Journey to the Future
A series of timepoints at which different fixed products would become available is presented. The likelihood to purchase and percentage of patients appropriate for each product is evaluated in each given market scenario.

Conjoint modelling
Respondents are presented with a series of potential new products from a set of pre-defined building blocks, and asked to select their preferred option. Variations on this begin by showing all of the building-blocks and asking respondents to build their own “perfect” product, or, where the product offering is modular, to select the key features from a “menu”.

Carrying out demand assessments in emerging markets follows the same procedure, but before you get started, there are some critical success factors to consider:

Wild card market events
Unexpected market events can have a dramatic impact on the healthcare environment across therapy areas, as witnessed with the COVID-19 pandemic. These scenarios can be difficult to anticipate or model. Analogues from other markets (e.g the pattern of economic recovery in China) or other scenarios (such as SARS in Asia in 2003) play an important role in identifying how and when countries might recover and when markets might return to normal. When conducting demand assessments, it is sensible to model the current market on pre-crisis data (e.g looking back over 6 or 12 months), and assess market size and likely uptake against that patient pool – taking care to acknowledge to the respondents that we are interested in what is typical, rather than specifically considering the physician’s immediate caseload of patients. Once the research is complete, gaps in uptake caused by unexpected events (e.g. of aesthetic or elective procedures) can be built in as a potential drop in patient numbers, with different patterns of recovery considered.
Local market understanding

A strong understanding of local market characteristics is important, especially in the current world climate. If there is sufficient information within the company about these markets, these can be shared and incorporated before research is commissioned. If not, we recommend conducting stakeholder interviews prior to the full survey to help shape questionnaire design. Local factors to understand include: 

  • Competitive set: In any market, there are always likely to be local competitors but in north Asia in particular, traditional medicines can be a competitor. For example, in Tier 3 hospitals in China, patients can be treated by both the oncology department and the TCM (traditional Chinese medicine) department. These are not necessarily cheap options, and some traditional remedies are more expensive than innovative western treatments. Excluding a key competitor would of course warp the final view of the market
  • Ability and willingness to pay: In self-pay markets the patient may be the payer so affordability of the treatment may be a barrier to usage. The size and growth of the medical insurance market may also impact demand: – If insurance packages include screening, the pool of diagnosed patients may increase – If treatment is covered by insurance, more of those diagnosed would receive prescriptions – Some patients may receive a lump sum insurance payout with freedom on how to use that money – in such cases, some may prefer not to use the money for prescription medication
  • Patient access programmes (PAPs): These may help those outside insurance packages access medications – for instance offering additional help for vaccinations to those in the lowest socio-economic brackets
  • Medical tourism: To benefit from cheaper prices or better care, do patients prefer to travel for treatment – e.g. from Indonesia or Vietnam to Singapore? The size of the market may be either underestimated or overestimated if this factor is not taken into consideration
  • Guidelines/protocols: Some markets are highly influenced by guidelines and this would need to be built in to the materials to ensure that the range of likely uptake can be modelled, and the best case isn’t underestimated
Accounting for overstatement

A challenge in conducting demand assessments is that sometimes respondents overstate their likely usage or willingness to try something new when participating in market research. Behavioural economics helps us explain why:

  • No risk bias: there is no risk to physicians or to consumers in agreeing to prescribe or buy a new product in a market research interview
  • Acquiescence response bias: There is a general tendency to answer positively when in doubt or to conform to the social norm of appearing agreeable, even when answering anonymously
  • Pro-innovation and recency biases: there is a tendency to overvalue the usefulness of something new and underestimate its limitations; or for some, to favour new evidence over prior evidence

To address this problem we use a series of questions to understand how likely each individual is to really act in the way they’ve described. These questions can be tailored to the specific market, but generally take the form of likelihood to use, with a simple rating scale response. When hoping to understand willingness to pay, a respondent might need to pass through a series of “gates” before we accept them as a true new user or adopter. For instance, for a vaccine: likelihood to ask an HCP about the vaccine or likelihood to purchase the vaccine, if offered by the HCP.

This could be complemented with questions on analogues e.g. did you visit a doctor to ask about a previous vaccine; did you purchase it? Or questions about general beliefs – e.g. awareness of vaccines or concern about endemic diseases and the need to vaccinate.

There can be some cultural variation in the use of scales, which also needs to be taken into account. For example, physicians in Hong Kong can be more conservative in their outlook, which can make them appear less enthusiastic about new products joining a market. On the other hand, people in the Philippines and Indonesia may be more positive and express greater interest. One potential solution to overcome this may be to swap a numeric question for a pictorial scale (for instance, clouds/sun or star ratings), and so move away from the cultural variability which may appear using verbal scale questions. This will not entirely eliminate all possible cultural differences, as, for example, variation in perception of facial emotion can influence the use of smiley-face scales (as sometimes seen in Japan) and some pictorial options may not be appropriate in a medical context (e.g. rating scales using hearts for products with potential cardiac side effects). Another solution is to standardise the answers during the analysis process, so that the relative interest in each product can be more easily measured across cultures and then applied to the final uptake results.

These questions and methodologies work together to identify physicians who would prescribe or consumers who would use or purchase. Final usage and uptake numbers are then calculated based on the total sample, but setting the usage of anyone who falls at one of the gates to 0. It is not uncommon for this to result in a discount of 25-50%.


Considerations for demand assessment in emerging markets

  • Conduct Internal Stakeholder interviews to get detailed understanding of local market factors
  • Understand the market access environment including reimbursement, private insurance and Patient Access Programs

  • Measure the degree of independence prescribers have with innovative medications

  • Consider including patients in self-pay/ co-pay markets

  • Understand the competitive set, including the influence of medical tourism

  • Factor in cultural scoring when comparing future uptake across different markets

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