Blog March 23, 2016

Launch or License: Some Points to Consider, When You’re Considering Your First European Launch

For many young biotech and pharma companies, the decision about how to take their first drug to Europe has been simple: just license the European marketing rights to a company that already is well established there, and collect milestone payments and a stream of royalties. For an inexperienced company, dealing with the European regulatory and reimbursement systems can be a daunting process, and a costly one as well.

 

And yet, directly launching a drug on one’s own can be extremely rewarding for a proprietary drug developer, in terms of both the experience gained and the increased valuation that company receives. So, what are some of the factors that should be considered, when determining the right European strategy and path forward?

 

  • Does your product target a disease area(s) served by specialists or does it address an Orphan indication?

 

Building a sales force, marketing operations and distribution infrastructure across multiple countries requires significant investment in time and money.  These costs can be mitigated by building only a modest sales force targeting a small number of high-prescribing physicians. Similarly, a new drug for an Orphan disease requires access to only the small number of specialists who treat those patients. If your drug fits either scenario, launching on your own could be easier and more affordable than if your drug targets a larger, less focused group of prescribers.

 

  • Is your long-term goal to build a global pharmaceutical company?

 

Your company may still be a relatively young one at this stage, especially if this is your first product to approach commercialization. But if your long-term goal is to build a global business presence, conducting your own European launch can bring substantial rewards. Analysis shows that companies who launch on their own are recognized with higher stock valuations over time than companies that out-license, recognizing the greater value created by building global capabilities. Moreover, once your experience and presence is established, you’ll have greater opportunities for future launches of both your pipeline products and in-licensed ones. Given Europe’s #2 position behind the United States in terms of branded pharmaceutical spend, launching in Europe is the logical next step after the United States in any quest to become a global pharmaceutical company.

 

  • Can you leverage your US outcomes data to help ensure a reimbursed European launch?

 

Regulatory approval in Europe does not guarantee reimbursement. Outcomes data compared with standard of care are becoming increasingly important in Europe as well as in the United States. As a result, companies seeking to enter the European market may readily leverage outcomes information being developed for their U.S. launch. Understanding the differences in requirements between the United States and Europe early in the development process is very important, but the increased investment needed to meet Europe-specific demands is likely to be incremental.

 

  • What innovations can you implement to help manage the time and cost of a European launch?

 

Once the launch decision has been made, ensuring a smooth rollout requires a precise determination of sales force requirements and other personnel needs. Fortunately there are both plenty of experienced executives who can strategize and lead such a launch, having done so previously within Big Pharma or a biotech that has already tackled the European launch challenge. Innovative, virtual resources — like experienced regulatory consultants and bespoke contract sales forces — can also help solve operational issues while minimizing costs and commitments.

 

Companies may also be able to implement early access programs (EAPs) prior to gaining full marketing authorization in Europe. EAPs can help increase awareness about a drug and in some cases, generate revenue ahead of the official launch.  They can also help the company build relationships with customers and gain understanding of how the drug will be used in the real world, prior to a full scale launch. Companies may initiate such programs for products to treat any disease considered life-threatening that cannot be treated satisfactorily by currently authorized drugs. While implementing EAP programs can be challenging, third party vendors exist with experience and expertise.