Own Presence. The “own presence” model provides the largest financial upside and is integral to building an own global commercial presence. Companies, therefore, should use it for their most important markets. Usually this means EU4+2. Depending on the pipeline and opportunity size, it may also include Belgium, the Netherlands, and Luxembourg (BeNeLux) and the Nordics.
In this model, the biotech is the marketing authorization holder (MAH), the company licensed to distribute, sell, and commercialize a medical product. The MAH has full control over strategy and commercial operations, with responsibility for building up commercial operations and the necessary local infrastructure (hiring, renting office space, and so on). The MAH also has full P&L responsibility, with complete capture of profitability and control of the value chain.
Sales and Distribution (S&D) Partners. For smaller markets with limited potential, such as countries in Eastern Europe, companies regularly deploy S&D partners. That’s because these markets generally do not generate enough profits to cover the local activation costs.
In the S&D model the biotech is also the MAH. The S&D partners are responsible for sales and distribution activities, including customer interactions. Biotechs can outsource other activities, such as market access and medical affairs, on a case-by-case basis.
Out-Licensing. Few companies license out an entire European launch to an external business partner, in large part because they consider out-licensing to have the lowest commercial upside.
Create a Market Access and Pricing Strategy. For each target country, companies need to assess the size of the commercial opportunity and determine how to maximize prices and volume while minimizing the access timeline. This challenging task requires an in-depth understanding of the country’s pricing and reimbursement pathways as well as the key criteria for the local health technology assessments (HTAs) that are used to curb government expenditures on very high-priced drugs.
Creating the Operational Capabilities to Support Expansion
With these strategies in place, the organization should focus on developing a comprehensive execution plan.
Start at the end and go backward. We recommend that companies first ascertain the launch dates for key countries and then plan the activities that immediately precede the launch, especially the process for obtaining market access.
This process includes getting scientific advice and submitting the value dossier (the value proposition and supporting evidence). Companies must also plan for medical affair activities including the prelaunch expert and registry engagement) and supply chain activities (track and trace, localization of product labels, and packaging).
Set up the future target operating model. Companies should also develop a blueprint of the future organization on both regional and local levels and define the resources that will be needed over time. They should ramp up the new organization in stages that are fully aligned with launch activities and their urgency relative to the envisioned launch dates to optimize use of the time until launch. US-based companies especially need to establish an international or European regional structure early on to align launch activities across different countries. The launching process typically starts with Germany and the UK.
Strengthen regional teams. Biotechs often start by hiring talent with expertise in marketing, medical affairs, and market access in key markets. Given the inherent risk of biotech product development, companies often rely on contractors and consultants for this early phase of the launch.
Build local capabilities and empower teams. To limit upfront investments, biotechs should build local organizations that leverage existing global resources as much as possible. Companies should look for professionals with commercialization expertise and provide them with sufficient autonomy to drive local execution and decision-making. People with knowledge of European markets, the relevant therapeutic areas, market access, medical affairs, and regulatory are a must, even when there isn’t the budget for full-time positions. If necessary, companies can hire contractors, particularly in technical fields like regulatory affairs or market access. This is a useful way to acquire expertise while balancing the risk that the product could still fail in late clinical trials.
Avoiding the Pitfalls
In our experience, small biotechs launching new products in Europe commonly encounter certain pitfalls that can endanger the success of their efforts.
On the strategic side, companies lack clarity on the size of the European opportunity and how to realize it. Some underestimate the complexity of the market, with its various access environments and care systems, and lack the deep expertise needed to manage them effectively. As a result, companies may be overly ambitious, taking on too many countries or patient segments. Or they may be shortsighted, neglecting to develop a long-term strategic view on the entire European market that’s needed for setting up easily scalable operations.
On the operational side, companies often find themselves late in preparing for market access discussions and engaging key opinion leaders owing to waiting for R&D results that could reduce launch risks. In many companies, functional silos can make it difficult to share information and address interdependencies. Resource pitfalls, too, are common. For example, on one extreme, companies may allocate too much talent to the US market at the expense of the European opportunity. On the other extreme, once they have entered the European market, they may use local expertise for certain functions when a regional person would suffice.
Setting Up for Success
Making the shift from an R&D engine to a commercialization machine is not an easy task. We’ve found that four practices will help set companies up for success.
Remain ambitious while understanding the market. Many biotechs are rightfully excited about their products. But although they have engaged with clinical experts throughout the development process, they often lack an in-depth understanding of major local commercialization challenges, including reimbursement requirements, pricing limitations, and the competitive landscape. Leveraging market research, multistakeholder advisory boards, and mock-pricing negotiations is critical.
Defining the timeline, deliverables, and process is critical to mounting a successful European launch for biotechnology companies.
Set up a project management organization (PMO). A flexible and agile PMO with sufficient prior Europe experience is vital to meeting timelines and the important milestones along the way. This small cross-functional team must be able to switch between issues on the critical path and manage all the arising interdependencies between the different functional teams while continuously tracking the launch efforts. The key here is that the PMO be able to quickly resolve any issue that could introduce delays.
The PMO is vital to success because it is essentially doing two tasks at once—building the European presence and launching a new product.
Start engaging with key stakeholders early on. Stakeholders, including regulators, medical associations, market access third-party suppliers, payers, and patient engagement organizations, need to be part of the effort from the beginning. Biotechs must determine the stakeholders to include and the discussion to have with each, following industry-specific compliance standards.
Establish an agile process for updating the strategy. The launch strategy will need to evolve as additional market data is generated, new customer insights become available, and the first launches indicate what works and what does not. So it’s important to have an agile process that makes it easy to finetune the strategy on a regular basis.
Mounting a successful European launch for biotechnology companies is not simple or straightforward. Acting as a catalyst and thought partner, BCG can help you define the timeline, deliverables, and process to prepare your launch effectively. The key is to start 24 months prior to launch; think through the market access requirements and approach to bring your product to various EU markets; and set up the future target operating model along a set of interim steps to build a sustainable and compliant organization for the future.