There was a time where regulatory process, promotional regulations and therapeutic guidelines were organized on a national basis. During the last 20 years, the EU has increasingly centralized and harmonized regulatory procedures and promotional practices; even access and reimbursement processes are interdependent and increasingly similar.
While the processes vary across the EU, the standard set by the UK’s National Institute for Health and Care Excellence (NICE) in 1999, and the reference pricing system have reduced the variability of reimbursement process outcomes across Europe. The result: national processes have lost importance – as have national organizations.
In response to increasingly uniform regulations and more comparable pricing processes, national organizations did not add enough customer value to justify duplications; many pharmaceutical companies clustered their commercial outlet by language borders and some smaller markets were attributed ‘opportunistically’.
In addition, clinical practice guidelines, opinion leader networks and scientific societies also function across borders. Smaller countries are often highly centralized and have significant sales potential due to the patient concentration in a few hospitals.
Cluster organizations quickly learned that competence was more important than passport; and that national population was not predictive of account size and importance. An inverse correlation developed between clinical specialization and the need for national support organizations: the more specialized a business was, the more it benefited from a transnational set up.
The question in terms of Europe is, are you playing a different course per country or selecting one strategy for the whole region? Where passports have traditionally driven European organizational design, the question could be asked: “Why can’t Europe be run as one single organization led by patient potential per hospital?”
There are many reasons why this could be the winning approach, especially in highly specialized competitive settings. The following tips could be valuable to playing the course perfectly:
Tip #1: Maximize product and disease competence not language competence
Tip #2: Win customers by putting the most competent resource in front of them
Tip #3: Centralize based on disease, accounts and medical networks focus
Tip #4: Get organized around customers, networks and competences
Tip #5: Start with the customer in mind – not the countries
The centralized approach integrates physicians across country borders, providing them with access to Europe’s leading centers, facilitating education and best-practice sharing and improving patient outcomes. From the pharmaceutical company’s perspective, it should develop stronger relationships with European-level KOLs, societies, payers, governing bodies and regulatory bodies. In addition, the organization can be up-scaled easily to take on new indications and new drugs for the same target group, thus introducing further efficiencies through economies of scale.
Start-up biotechs conquering Europe have to master an additional level of complexity. Before even being able to focus on product launch, they need to build their legal infrastructure, organizational set-up and resulting tax / commissionaire structure. SOPs reflecting relevant contracts can often be time-consuming, becoming a barrier.
The centralized pan-European model clearly seems to be the best option for commercializing narrow indication drugs to small specialized customer groups. From a business perspective, this model is likely to maximize profitability no matter how small the peak-sales expectations of the product.
