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In developing their business plans, companies of all sizes face the challenge of determining the size of their markets. To begin, companies must present the size of their “relevant market” in their plans. The relevan

According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product

t market equals the company's sales if it were to capture 100% of its specific niche of the market. Conversely, stating that you were competing in the $1 trillion U.S. healthcare market, for example, is a telltale si

; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.

Examples of combination products may in

n of a poorly reasoned business plan, as there is no company that could reap $1 trillion in healthcare sales. Defining and communicating a credible relevant market size is far more powerful than presenting generic in

lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.

dustry figures.

The challenge that many firms face is their inability to size their relevant markets, particularly if they are competing in new or rapidly evolving markets. On one hand, the fact that the markets are

here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe

new or evolving is the reason why there may be a large opportunity to establish them and become the market leader. Conversely, investors, shareholders and senior management are often skeptical to invest resources bec

d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.

Combination pro

ause, since the markets do not yet exist, the markets may be too small, or not really exist at all.

In developing over 200 business plans for emerging ventures, venture capital firms, SMEs and Fortune 500 spinouts,

ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc

rowthink has encountered the challenge of sizing emerging markets numerous times and has developed a proprietary methodology to solve the problem.

To begin, it is critical to understand why traditional market sizing

easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi

methodologies are ill-equipped to size emerging markets. To illustrate, if a research firm were to use traditional methods to size a mature market such as the coffee market in the United States, it would consider de

nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically

ographic trends (e.g., aging baby boomers), psychographic trends (e.g., increased health consciousness), past sales trends and consumption rates, price movements, competitor brand shares and new product development,

and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ

and channels/retailers among others. However, conducting such an analysis for emerging markets presents a challenge as several of these factors (e.g., past sales, demographics of the customer when there are no curren

ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi

customers) don’t exist because the markets are presently untapped.

The methodology required to size these new markets requires two approaches. Each approach will yield a different approximation of the potential mar

ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.

Following aspects would a

et size, and often the figures will work together to provide a solid foundation for the market’s potential. Growthink calls the first approach “peeling back the onion.” In this approach, we start with the generic mar

dd to the challenges in developing combination products:

Which markets to tap where the combination products can do fairly well?
Which combination prod

ket (e.g., the coffee market) that that company is trying to penetrate, and remove pieces of that market that it will not target.

For instance, if the company created an ultra high-speed coffee maker that retailed f

cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin

r $600, it would initially reduce the market size by factors such as retail channels (e.g., mass marketers would not carry the product), demographic factors (lower income customers would not purchase the product), et

tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen

c. By peeling back the generic market, you eventually will be left with only the relevant portion of it.

The second methodology requires assessing the market from several angles to approximate the potential market s

t?

As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel

are, answering questions including:

•Competitors: who is competing for the customer that you will be serving; what is in their product pipeline; once you release a product/service, how long will it take them to ente

ping new procedures for reviewing their safety, efficacy and quality.

Professional from academic institutions, pharmaceutical industries, health care indust

r the market, who else may enter the market, etc.

•Customers: what are the demographics and psychographics of the customers you will be targeting; what products are they currently using to fulfill a similar need (su

y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products

stitute products); how are they currently purchasing these products; what is their degree of loyalty to current providers, etc.

•Market factors: what other factors exist that will influence the market size – governm

.

As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de

ent regulations; market consolidation in related markets, price changes for raw materials, etc.

•Case Studies: what other markets have experience similar transformations and what were the customer adoption rates in

elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.

Companies that provide selfless information through particip

hose markets, etc.

While these methodologies are often more painstaking than traditional market research techniques, they can be the difference in determining whether your company has the next iPod or the next Edsel

tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products

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