How often do you receive spam in your inbox from companies trying to sell you market reports? It’s either the latest U.S. market data, data from Latin America, or information on global markets for a wide variety of medical conditions or procedures. Most come with an offer for a complimentary Executive Summary (with key information redacted) and an offer for “special” pricing when multiple reports are purchased. Unfortunately, each of these reports will likely set you back $5K or more if you do decide to purchase one. Are these reports really worth the investment? How much useful data do these reports really contain? It depends on what you believe you need the report for and whether the information you need is available from other sources.
When Do You Consider Buying a Market Report?
You should only consider buying a market data report if the majority of the information contained in the report is vital to your strategic planning efforts and the information is not readily available from a “free” source. This may be the case if you are looking to develop or commercialize a technology in a field you are unfamiliar with and market data is not easily obtained. Spending big bucks on a report when you are only interested in one section of its content (e.g. a specific geographic region or a standalone procedure contained in the report) is often not worth the investment. If this is the case, you may want to negotiate with the company that provides the report to sell you the portions of the report you are specifically interested in is sometimes a possibility (why pay for data you don’t need).
Another good reason to buy market data reports is if you plan to use the data to identify procedure volumes to map out or develop sales territories. Using this information to plot geographic territories and to better understand the potential market size for each territory is invaluable. The key, however, is to insure the report has the granularity of information you are looking for and in a format that can be easily exported into Excel, Access, or a territory mapping tool.
How Reliable is the Market Data in These Reports?
Having experience in the orthopaedics market from a medical device and biologics perspective, I often have access to market data reports focusing on procedure volumes in the total joint and spine markets. It is interesting that there is often no consistency in the procedure volume numbers from one market research company to another offering these reports. The key is understanding how the data in the report is compiled and what the various sources of the numbers are. What is the data in the reports based on? Facts? Projections based on surveys on limited data? Estimates based on publically available data or even a SWAG? You need to ask before buying the report. The sales reps trying to get you to buy these reports often do not know exactly how the numbers were derived (but swear the number are accurate).
If you going to be using the report for strategic planning purposes, it is best to arm yourself with information on how the market research firm came up with the numbers in preparation for a question from your CEO or a Board Member when these numbers are different from numbers they have obtained from another source. The approach I have often used is to simply ask to speak with one of the analysts who prepared the report. This allows you to truly understand the methodology which was used to develop the numbers and to identify potential shortfalls in their approach. For example, did they simply use publically available MEDPAR data from Medicare and then project non-Medicare procedure volumes based on some assumptions? This would be an important fact to know if you product is targeted towards a non-Medicare patient population. If the sales representative puts up resistance to you talking to an analyst, consider going somewhere else to find the information. Remember the saying “garbage in, garbage out”….this applies to market data as well.
Other Sources of Market Data
There are numerous public or free sources of market data which preclude the need for the purchase of a market report. While there are too numerous of potential sources to list in this post, I’ll try to provide some examples which may be helpful to start with.
A primary source, which many market research firms use, is data available from the government. This might be in-patient (MEDPAR) or outpatient (OPPS) procedure volume data available in the annual on the Centers for Medicare and Medicaid Service’s (CMS) website, data from government funded registries and data collection organizations (e.g. HCUP.net, UNOS, USRDS), or provider databases developed as a part of CMS’ quality care initiatives. A key requirement for most of the above is understanding of how the procedure is coded (ICD-9, CPT code, etc.) since many of these databases identify procedures volume by how they are coded. Identifying what government-sponsored data and/or databases are available that may meet your needs is invaluable towards assisting you to avoid buying expensive market data reports.
Another great source of information is analyst reports developed investment firms. By identifying analysts who cover sectors which your are interested in is a great way to identify market data and competitive trends which will assist you as you develop your strategic plan. Many analysts attend and report on key medical meetings within these sector reviewing what’s new in these particular fields and the impact of these trends on market dynamics. After you have identified analysts who are reporting on market areas you are interested in, simply send them a note and asked to be copied on their reports.
Don’t forget that your competitors or companies with an interest in the same market space you are in may be great sources for market data. I often visit other company’swebsites to look for investor presentations they have made which contain market data. Many of these companies also present at major investor conferences and often posts these presentations as PowerPoint files on their website. Broad market data can often also be found in press releases announcing new product development initiatives and commercial launches. Finally, using PubMed and Google to search for available registries and registry data can also help identify sources of market data. This is an especially useful mechanism for finding procedure volume and market data for global markets outside the U.S.
Market data reports have their role, however, don’t be lured into buying every report that comes along since this is an expensive proprosition. Spend time identifying other sources of market data and also determine when freely available broad market data will suffice or when specialized data requiring a high level of granularity is needed.
Check out our White Papers
Medical Technology Insights is an ongoing series of white papers developed by The Atticus Group addressing key topics of interest to companies developing and commercializing novel medical technologies.
Volume 1, Number 1 – October 2016
Avoiding a False Start: Marketing Tips for the Successful Commercialization of Novel Medical Devices
A failed product launch can be disastrous, both financially and to the reputation of the brand. The development and timely execution of a comprehensive strategic launch plan is required for the successful commercialization of new medical technologies. In this paper we review four areas where advanced planning by marketing individuals can assist with a successful product launch.
Volume 1, Number 2 – January 2017
Predicting the Future: Forecasting Initial Product Demand and Sales Revenue for Novel Medical Device Technologies
Sales forecasting for new medical technologies is both an art and a science. This paper reviews the benefits of developing a spreadsheet-based forecasting model and how various market factors and company-related parameters can influence forecasting for sales revenue and initial product build.