you might from everything you’ve learned so far realize that there are subtleties in
the types of patients you want to treat, the disease that they have, and also in the people
that are providing them with care and that’ll lead you to your segmentation analysis.
Segmentation analyses actually can lead people down a rabbit hole because there’s so many
different ways you can cut patient populations.
What I’d recommend doing is actually talking to people who are the key decision makers
in treating the disease and just ask them the question about what’s relevant.
In lung cancer in particular after talking to some oncologists, I learned that stage
of disease was really important and whether or not it was easy for them to access the
tumor itself through existing methods.
And I learned that there was a subset of patients that actually have no way to use genomic tools
because their tissue cannot be collected from existing tools and that to me seemed like
a really interesting Patient segment to consider going after in the future.
the last step in doing a market assessment is to get an estimate of how big the market
is.
When we talk about how big the market is we’re talking in dollars so it’s not just how
many patients there are; it’s how much revenue is available to your company or to an acquiring
company if they want to sell this product.
the way you get to those dollars is fundamentally by thinking about the number of patients in
your segment that there are to treat with your product, the share of those patients
or the percent of those patients that would receive your product, and the price that would
be charged or the reimbursement for it when the procedure with your device is completed.
So starting out with the number of patients in your segment I recommend you go to associations,
medical databases to try and find those numbers.
So for the lung cancer example I went to the American Cancer Association’s website and
I realized they had a database that had the number of lung cancer patients that are diagnosed
every year and then I used that information from Up-To-Date to find out what percent of
those patients actually had tissue available and unavailable from current methods.
So I learned that that market size, although there’s 220,000 patients in the US that
have lung cancer every year, it turns out only about 40,000 of those patients don’t
have a way to access their tissue through current methods.
So that might actually, the 40,000, might be my patient sample size.
The next thing you do is you go to your customers and you say, “What percent of your patient
population would you use a new device on if it could solve this problem?” and you have
a conversation with them to understand how high the threshold is in order to change their
behavior and the way that change is manifested is in share, the percent of patients that
might use your product.
And finally is to figure out what price can be charged.
The best thing in terms of price is to look at comparable products.
So if there’s something similar that’s already on the market you can look at that
as an example and if that’s not available you could look at the cost that’s associated
with the errors or the safety issues or the lack of treatment that’s provided to patients
because of the need in the market today.
So if you multiply those three things together, number of patients times the share given to
them times the price, you get an estimate of how big that market really is.
So one thing to consider is value is in the eye of the beholder and the beholder that
is most important when you're doing your need assessment is whoever is the decision maker
to order your product.
So you want to interview those people and figure out what needs to be delivered in terms
of clinical efficacy or benefit in terms of safety or cost reduction in order to get them
to use your product for the first time ever and that’s not a low bar; that’s actually
a really high bar in medicine to get someone to try something new so you want to be sure
that you understand that it’s not a trivial benefit that’s going to be provided in this
need.
How high is the bar to be able to really change behavior in this marketplace.