Demand forecasting: A vital tool to enable India’s Covid-19 testing industry to be response ready

by Rashmi Pimpale & Manisha Bhinge

The ongoing Covid-19 pandemic has fortified the central position of diagnostic testing in outbreak management. As India goes through various stages of the pandemic, accurate application of diagnostic testing remains a critical component of its pandemic strategy. It helps in the timely detection of Covid-19 cases and in turn, implement well-informed public health measures to mitigate the spread of Covid-19. Moreover, as we witnessed around the globe and in India, during surges, access to testing becomes scarce as supply-side constraints prevail. This particularly affects remote and underserved regions as lab staff shortages become rampant due to infections, and turnaround time for tests gets further stretched.

It is therefore of utmost importance to maintain a stable and reliable supply of testing resources. To efficiently plan for surges and avoid stock shortages, all countries’ health systems need to be able to forecast and India is no exception. Equipped with relevant forecasting data, key stakeholders involved in India’s pandemic response can take the necessary measures to develop a strong response agenda. An accurate forecast helps diagnostics manufacturers anticipate peak testing time and take appropriate and well-informed steps to avoid supply-related bottlenecks. In a report on smart testing and tracing measures published in May 2021, The Rockefeller Foundation advocated for scientific demand projection for Covid-19 tests as an effective requirement for pandemic response and mitigation measures. One of the important recommendations was to continuously increase demand projection for tests to enable the testing industry to be response-ready for potential future outbreaks.

Role of forecasting to fight Covid-19
Since several extraneous factors define the trajectory of the pandemic, it is important to foretell different scenarios and create projections accordingly. Forecasting is imperative for strategic decision making, adequate mapping of resources, formulating policies and informing public health measures. It helps estimate the pandemic’s trajectory by identifying different scenarios under which the country can expect surges or reduction in cases and mortality. With this information in hand, the ecosystem involved in pandemic response, including government, industry, policy makers, scientific and medical community, can calculate demand for medical services, timeframe for containment measures, plan for equipment and technologies that will be needed and ensure supply chain and distributions mechanisms are accounted for to enable a timely response.

Forecasting is also critical for the financial viability of many micro, small and medium enterprises (MSMEs) involved in the production of Covid-19 testing kits, which usually do not have deep coffers to be able to tide over tides of low demand and available capital to ramp up capacities to supply in surge. This is exactly why Department of Biotechnology and the Centre for Cellular and Molecular Platforms (C-CAMP), relied on Research and Innovation Circle of Hyderabad (RICH) as a critical Center of Excellence to model demand for diagnostic tests and augment domestic manufacturing capacities. RICH considers factors such as historical testing trends and percentage of population tested, among other aspects, to be able to project number of tests that will be required. In the most recent forecasting undertaken by RICH, four cases were modelled

1. Optimistic case with a fast tapering second wave
2. Moderate case with a slower tapering down of cases
3. The Third wave in October with optimistic fall in cases; and
4. Moderate third wave in October with slower rates of decrease in cases.

In all four cases, the estimates were made considering both national and state-wide trends. The demand forecasting data generated by RICH has been utilized by C-CAMP for the InDx (Indigenization of Diagnostics) program. Each startup/MSME participating in the InDx program offers a wide range of products with varying degrees of readiness in terms of quality and manufacturing capacity. The projection numbers, which provided an estimate of the national requirement of the test kits for the current year, have been a key input in InDx’s effort of mapping the existing capacities of the MSMEs to the projected demand, which in turn, has helped evaluate the scale-up requirement and viability of the MSMEs. The demand forecasting data has also helped in building a case for allowing indigenous manufacturers to export their products. The data has been used for determining the domestic requirement that needs to be sufficiently served to evaluate the quantum of exports that can be allowed and the resultant revenue generation opportunity.

Current challenges and the way forward
Currently, several states and public buyers procure testing kits through their respective tendering systems, which makes it challenging for MSMEs to track varied requirements and manage inventory. A central dashboard to provide information on the anticipated volumes could be created, which could be fed with the demand projections on an ongoing basis. This will enable the MSMEs to plan their operations better and participate in the procurement process in a more prepared manner. With accurate demand forecasting data, state governments can also consider alternate procurement mechanisms, and get certainty of demand and resultant elbow room to allow Indian manufacturers to export diagnostics tests. More importantly, the higher price realization through exports could cross-subsidize the price-controlled domestic market and further support sustained domestic demand servicing.

Since the pandemic began, multiple new ventures proliferated and have now emerged as indigenous manufacturers of Covid-19 RT-PCR kits in the country. While capacity creation has been catalyzed at commendable pace and breadth, it is now critical that it is sustained. Companies initiated into COVID-19 RT-PCR manufacturing should continue to engage in production at scale driven by business viability. This is important to ensure continued access to diagnostics. With an uncertain road ahead and the constantly evolving nature of the pandemic, a sustained focus on demand forecasting would ensure the testing and tracing systems established and strengthened in the country over the past two years, remain proactive and support testing suppliers to be response-ready to timely contain future surges.

Rashmi Pimpale, Chief Executive Officer, Research and Innovation Circle of Hyderabad (RICH), Hyderabad S&T Cluster
Manisha Bhinge, Managing Director, Programmes and Partnerships, Health Initiative, The Rockefeller Foundation

(DISCLAIMER: The views expressed are solely of the authors and ETHealthworld does not necessarily subscribe to it. ETHealthworld.com shall not be responsible for any damage caused to any person / organisation directly or indirectly.)