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Breaking into the European market can be a difficult endeavor for smaller biopharmaceutical firms who may have a valuable product to bring to market but lack the experience, infrastructure or deep pockets to be comfortable with such an undertaking. Uncertainty about reimbursement policies, multiple language barriers, and the lack of market access standardization across Europe – even within countries – can become overwhelming for firms with limited resources and no infrastructure or network in the region.

In response to these pressures, smaller biopharma companies generally take one of three paths: they either give up the European market altogether, try to go it alone, or out-license their product to another company, none of which is perfect model. Though there is another option. Many small firms today are taking a hybrid approach to cracking the European market, by partnering with an outsourcing vendor, rather than out-licensing the product all together, which allows them to take advantage of that provider’s existing network of human and capital resources without giving control over their product.

This hybrid approach is less expensive than building infrastructure in a new country; it increases the smaller firm’s probability of success by giving them access to people with extensive market knowledge; and because they are tapping into their partner’s human resources, they gain access to top talent for marketing efforts but avoid residual labor issues once the roll-out is complete. This reduces a lot of operational risk, while ensuring their labor needs in every market are skillfully addressed. 

Four strategies: Which one works for you? 

If you are uncertain about which model makes the most sense for your European marketing efforts, here’s a breakdown of the benefits and risks of each:

  1. Give up on Europe all together. While certainly the easiest and cheapest choice, ignoring Europe as a market means you may be giving up a substantial revenue stream. Even products that don’t have blockbuster potential can deliver significant sales in Europe, with many firms garnering $40-to-$50 million or more from products that have been deemed as having only modest profit potential. Breaking into this market requires faultless timing, deep knowledge, and extensive resources, but if it is done right, companies can increase the reach, value, and profit potential of a promising drug. 

  2. Do your own thing. Entering the European marketplace on your own is the most expensive and highest risk approach, but it also promises the greatest potential, because you don’t have to share profits or control of the product or marketing strategy. Companies have the best success with this option if they already have a well-rounded knowledge of the European market, a strong sales network in place, and enough resources to support a major global commercialization strategy. They should also be willing to invest extra time to roll the product out slowly so they can hone their strategy and learn from early mistakes. This is not an ideal model for companies with limited knowledge, time or resources to support such a campaign. 

  3. Out-license. This is the least costly and lowest-risk approach, but the trade-off is that it requires giving up control over EU-licensing of the product, which can impact future earnings and corporate sales potential. This is a viable option for companies that don’t feel strongly about retaining ownership of the European rights to their drug, or those that feel the benefit of establishing their product name in Europe outweighs the loss of control.

  4. Work with an outsource vendor. Partnering with a strategic outsourcing partner is a hybrid of last two options. It still requires financial investment – though not as much as going it alone – but it lowers the risks and uncertainty. This model is ideal for companies that want to break into the EU, but don’t have a deep knowledge or presence in the region; and for companies that have a limited risk appetite and want the benefits of working with a company that has a proven track record of success helping North American companies break into this market. Choosing the hybrid model provides biopharma companies with a greater probability of success while still enabling them to retain control over their European rights for the product, which can be an attractive value proposition for companies that are concerned about maintaining the long term value of their product portfolio.