How do pharmaceutical and biotech companies calculate patient lifetime value?
There is actual only a few cases where they need to estimate life-time value. In most cases it is easier to look at forcasted prevalence of certain diseases and estimate business that way. The also tend to focus theiir research on the physicians (and physician’s area demographics). It is seldom the “end customer” is analyzed directly. However, with the new CPG related branding strategies they have only recently been able to tap into (such as Lipitor, Viox, etc), it is beneficial for them to do effective LTV analysis. Most of them have a really basic model (such as assume a certain number of years). If patient data is available, you can get it from the average churn rates of the same or similair drugs (same as in other CPG).
