How Will The Accordion Effect Impact Your Brand Performance In Q4-2020 And Q1-2021?

    3 mins read

    Will the recovery of local economies from the coronavirus pandemic take the shape of a V, U, Nike Swoosh, or W? The “W” shape is gaining more acceptance from economists as they consider the recession at a national level.1,2 Here we consider the possibility that local economies may go through an "Accordion Effect": a series of W’s as they navigate the next several quarters. Each of them waxing and waning differently; an ensemble of accordions.

    On June 27, 2020, CNN reported the somber news that five states: Florida, Georgia, Tennessee, and even significantly low population density states like Utah and Idaho recorded their highest number of coronavirus cases in one day. Global deaths have reached half a million. 125,000 people have died in the United States.

    Over the last several months, federal, state, and local governments as well as individual towns have made difficult decisions around applying and relaxing restrictions around social distancing to curb the spread of the pandemic. Leaders have been in the unenviable position of making difficult tradeoffs between sustaining public health and protecting the healthcare system from unmanageable spikes in COVID-19 cases, versus ramifications on the social and economic wellness of the population.

    As of today, there is no vaccine or effective treatment for COVID-19. It is not known with certainty when one will be available. The approach of the fall and flu season will likely bring added burdens to the healthcare system with a further surge in COVID-19 cases. The degree to which these impacts happen will differ from geography to geography. A myriad of factors will affect the geographic variation in COVID-19 cases, including differences in policy decisions and the compliance of local populations to those policies and guidelines.

    One likely possibility is that different geographies will go through an “Accordion Effect,” experiencing multiple cycles of reopening, reclosing, and reopening again until a vaccine becomes available, and the world starts recovering and moving toward a new equilibrium. The impact on local economies is also likely to oscillate during this uncertain period, as employers make decisions that shift in risk-appetite over time based on how their industry sector is evolving.

    This pandemic is already adversely affecting drug utilization in several ways:

    • Market access and affordability effects caused by the spike in unemployment and worsening economic conditions.
    • Physical access effects caused by patients unable or unwilling to see their healthcare providers.
    • Promotional effects caused by the inability of multiple commercial roles (e.g., sales representatives, account managers, etc.) to interact personally with their provider/payer stakeholders.
    • Patient health-specific effects caused by an unwillingness to stay on or start therapy that may be immunocompromising.

    There is also a likelihood that as society navigates through the Accordion Effect, pharma companies will see similar oscillations in drug utilization and payer channel-mix at the local level. These oscillations will impact both the gross and net sales. Companies will be able to better set investor expectations and optimize local resource planning if they are able to forecast such oscillations better.

    Most pharmaceutical forecasting processes today are geared toward providing national level forecasts. These processes may be incapable of accounting for the wide variances in business performance at the local level over time.

    Axtria’s think tank has created an innovative solution to help clients set up new local forecasting processes in the next few months, so that they may make better decisions over the subsequent year or two as we battle and recover from the pandemic. The solution has been designed by industry-leading experts like David Wood, PhD (Advanced Analytics), George Chressanthis, PhD (Pharmaceutical/Healthcare Economics), Uday Shah, MBA (Market Access), and Razek Karnoub, PhD (Forecasting).

    If you are worried about accurately forecasting brand performance at the subnational level, please contact us (directly below). Axtria would be delighted to help and ensure that your forecasts and resource plans are properly optimized.

    This will allow us to ensure that potentially life-saving medications continue to get to the appropriate patients and mitigate the negative societal health outcomes that the pandemic-induced recession might trigger.




    Written By:
    Kedar Naphade, PhD
    Kedar has over twenty years of experience helping organizations create and institute innovative analytical decision making processes. He has deep expertise in sales and marketing analytics, market access, forecasting and HEOR/RWE analytics. He has successfully enabled clients to transform their data and analytics capabilities in order to drive superior patient health outcomes.  He frequently serves as a strategic advisor to executive leadership. Before joining Axtria, Kedar was a Principal with MarketRx, and prior to that, an analytics consultant with Bell Labs, Lucent Technologies.