How to successfully commercialize biopharmaceutical products in Europe

19.07.2017

The successful commercialization of a biopharmaceutical product in Europe follows five work streams:

 

  1. Market Access and Reimbursement
    During the product development process, it is important to start very early with a market analysis that identifies and quantifies potential end-consumers, as well as the buyers. In addition, potential price ranges for the product in different European countries need to be estimated.
  2. Target Operating Model and Supply Chain
    The supply chains in the Biopharma business are highly complex and often involve many outsourcing partners. An efficient business set up that reflects the business’ needs in the complexity of the European market – with more than 40 countries – is therefore crucial in finding the right target-operating model to manage these supply chains.
  3. Tax Model and Legal Structure
    By diligently combining operational and tax planning, a Biopharma company can significantly increase its efficiency. Nonetheless, careful structuring is necessary to ensure sustainability and scalability of the Value Chain. It is critical that functions, assets and risks are in place where profits are taxable.
  4. Regulatory and Quality
    The highly complex European market includes a plenitude of centralized and decentralized options and obligations to apply for licences or comply with regulations. An overview on the various regulatory and quality requirements is necessary for the successful launch of a product.
  5. Site selection and Value Chain Analysis
    Despite the existence of a single market, Europe still consists of many different jurisdictions with different tax, legal and other regulations and business environments may differ significantly. A Value Chain Analysis identifies the Key Value Drivers (functions, assets and risks) that should be relocated and conducts an assessment with the necessary requirements for the new location.

Timelines

These work streams are interdependent and, therefore, need to be worked on simultaneously. To name an example: site selection impacts the supply chain, as well as tax and legal matters.

When, how long and what process to introduce are pressing questions to any business. The five identified work streams for the successful commercialization of biopharmaceutical products in Europe have been summarised through sequential illustration in the timeline below. Assuming the entire process is followed through in an efficient manner, it could successfully be completed in a mere seven quarters or in just under two years.

 

Intangibles

An important element in the successful launch of the product in Europe is the careful planning of the transfer of intangibles (Licenses, Trademarks, Brands) to locations within Europe, which offers both commercial and tax benefits. Critical for the selection of such a location is the availability of a qualified workforce with specific know-how in Life Sciences and a competitive tax system. Efficient transfer of intangibles has to always be in conjunction with the transfer of functions of qualified personnel and/or risks.

The KPMG Site Selection Report for Life Sciences companies 2016 delivers a profound comparison of different countries regarding Life Sciences Clusters, Tax and Business Environment and Value Chain Analysis.

For a full description of the successful commercialization Biopharmaceutical Products in Europe, including the tax and legal set up, operational model and information on regulatory topics, watch our webcast on YouTube.

KPMG Switzerland has extensive experience in assisting Biopharmaceutical companies ranging from the Americas, over to Asia and India. Our pan-European teams’ vast array of experiences and competence include Value Chain Analysis, Tax planning – including transfer of intangibles-, identification of third party service providers and setting up of operational supply chain and legal structures across Europe, market analysis and regulatory topics.


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