Demand Forecasting

Meeting public-health needs in developing countries is made more difficult without accurate forecasting of the demand for medical products—no matter how much money is available to develop and purchase them. Shortcomings in demand forecasting increase risks for suppliers, resulting in higher costs, supply shortages, and uncertainty surrounding R&D. CGD’s Demand Forecasting initiative led to the publication in 2007 of A Risky Business with recommendations for specific public and private organizations to smooth the delivery of health products to the people who need them.

CGD convened the Global Health Forecasting Working Group to study the challenges surrounding demand forecasting. After a year of research and deliberation and further consultation among a broad set of interested parties, the group concluded that better forecasting requires wider sharing of the risk involved in producing drugs and aligning incentives among those who influence market dynamics through three mutually enforcing actions:

Improving the capacity to develop credible forecasts by taking forecasting seriously
Mobilizing and sharing information about product demand in a coordinated way through the establishment of an infomediary
Adopting a broad range of contractual arrangements

Read the working group's report or policy brief to learn more.