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5 Aug 2015

What is importance of compound annual growth rate (CAGR) in pharma marketing? How to calculate?

The compound annual growth rate (CAGR) is a useful measure of growth over multiple time periods.

It can be thought of as the growth rate that gets you from the initial value to the ending  value if you assume that the sales has been compounding over the time period.

In pharmaceutical industry it’s play vital tricks – We talk about quite often

“the projected pharmaceutical revenue growth rate in form of the CAGR (compound annual growth rate) from 2012 to 2017, by region. During this period, the projected growth rate for the industry is 12.7 percent for Middle East or 3.5%”

CAGR is important term which marketing / global pharma marketing person should understand.  We have demonstrated the working below – how exactly it should be done in excel sheet.

 

Lets look into a sales of the BRAND X from 2007 to 2014.
2007 -$340
2008-$390
2009-$520
2010-$540
2011-$651
2012-$890
2013-$902
2014-$1100
Calculate the CAGR for the Brand X.
cagr formulae
Download the working sheet for your reference

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