How to Predict the Future: Five Lessons for Pharma Scenario Planning
Prescient Healthcare Group recently facilitated a New Product Planning (NPP) Roundtable, bringing together industry leaders in the oncology and rare disease areas to identify the key challenges facing the NPP function and the industry overall. One conclusion was shared unanimously: scenario planning has become even more challenging in recent years with the growing pace of development and the intensity of competitive activity.1
In this article, we share five key lessons for pharma teams looking to hone their approach to scenario planning. What are the common pitfalls? What are the repercussions of flawed scenario planning? How can organizations evolve their future foresight capabilities?
Join us as we explore these pressing questions and equip you with the edge you need to succeed with your strategy.
1. Defining the Time Horizon
When it comes to predicting the future, the human mind has innate biases. A common tendency is to overestimate the magnitude of change that can occur in the short term (<3 years).
Conversely, there is a parallel inclination to underestimate how much will change in the long term (~10 years). This phenomenon can lead to a misalignment between expectations and reality.
When the timeframe is not clearly agreed upon at the beginning of the scenario planning process, pharma teams run the risk of working at cross-purposes. By acknowledging these fundamental biases and agreeing together on an appropriate time horizon, we can ensure that everyone on the team is working to answer the same central question.
2. The Layers of Influence: Micro, Mid and Macro Factors
The pharmaceutical landscape is constantly changing and evolving, but assessing the changes that may occur across the entire market can be like trying to boil the ocean: time-consuming, resource-intensive and ultimately unrealistic.
Narrowing our frame of reference can make the process feel more achievable, but narrowing our focus too much creates a risk of missing the bigger picture. To avoid tunnel vision, it is essential to recognize future drivers at various levels:
- The micro level looks in detail at the specific drug class in scope and reveals important market nuances (e.g., the emergence of novel endpoints or novel combination strategies)
- The mid level encompasses wider trends within a given therapy area, capturing pivotal shifts within a broader context (e.g., out-of-class competition or the entry of generics and biosimilars)
- The macro level incorporates the sweeping changes happening across therapy areas (e.g., the adoption of complementary technologies or economic factors, such as the Inflation Reduction Act)
Among these layers, the existing drivers of behavior often carry significant momentum, even in the face of disruption (e.g., the habitual use of familiar, established therapies). Without sufficient capability, opportunity or motivation for change, the existing entrenched behavior is likely to continue (see the COM-B behavior change model).3 These deeply ingrained behaviors can be considered like currents in the ocean, shaping the direction of change even as new winds blow.
3. Systematic Future Driver Assessment
The sheer number of potential future drivers to consider can be paralyzing; when done well, however, scenario
planning helps us to embrace and make sense of the chaos, allowing for team alignment around the drivers
with the greatest influence on the future.
The systematic assessment of future drivers can be considered as both an art and a science. It typically involves
categorizing each factor according to its potential impact versus likelihood, to create a visual
representation of the priority factors to consider (‘high impact, high likelihood’) without losing sight of the
disruptive factors (‘high impact, low likelihood’) that could be transformational if they occur.
scenario development. In more complex or competitive industries, companies are already looking to augment
human capabilities using AI and machine learning models with the goal of translating diffuse datasets into
future scenarios more accurately and efficiently. Could this be an area your organization needs to invest in
today to stay competitive tomorrow?
4. Anchoring in a Solid Base Case
Pharma scenario planning is a means to an end: cross-functional alignment around a future-proofed strategy.
As such, the translation of future drivers into a base case scenario is paramount. Without a well-defined base
case and clear implications for strategy, the analysis remains academic.
Nevertheless, beware of confirmation biases and the potential urge to jump to the ‘answer’ while seeking out
points that support a particular conclusion. When crafting future scenarios, embrace the possibilities
presented by the insights rather than jumping too early to conclusions.
Think of scenario development as writing several different stories about the future. The narrative of each story
should center around a different ‘what if’ question that helps us to easily visualize the potential directions of
the future. Overlapping future scenarios tend to create confusion and prevent alignment amongst teams, so it
is important that scenarios are sufficiently distinct from each other.
base case, that is, the lens used to collectively view the future through for strategic planning purposes.
5. Preparing for Disruption
In the face of market uncertainty, a solid base case serves as a compass, but it is not a static conclusion and
should be revisited as the market evolves. Remember that change is not always linear; surprises do happen.
Change, even in its most disruptive form, often leaves traces that can be tracked. Unforeseen ‘black swan’ events may be outliers, but they do not emerge out of a void. Their subtle signals can be discerned with astute
observation. It is vital to maintain vigilance and track these outliers, acknowledging their potential impact
while also recognizing their rarity.4
The base case provides a consistent point of reference; teams should, however, continue to monitor market
events closely, looking for early signals of a shift to an alternative scenario. Proactive tracking of black swan
events enables companies to pivot their strategies promptly, ensuring that strategies remain future-proofed.
The Key Takeaway
This blog post is also available as a short animated video – click here to watch
- Trends and Challenges in Pharmaceutical New Product Planning: The Cornerstone of Value Creation. Prescient Healthcare Group White Paper (2023)
- The behavior change wheel: A new method for characterising and designing behaviour change
interventions. Michie, S., van Stralen, M.M. & West, R. (2011)
- The Black Swan: the Impact of the Highly Improbable. Taleb, N.N. (2007)