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How small pharma manufacturers can optimize drug commercialization through outsourcing

How small pharma manufacturers can optimize drug commercialization through outsourcing 

One of the most important considerations for any pharmaceutical manufacturer is determining the internal capabilities and capital needed to support drug commercialization. The reality is that small- and medium-sized life sciences companies lack the resources to match the commercialization strategies of big pharma. Fortunately, today, there are opportunities for small pharmaceutical companies to execute a go-to-market strategy through outsourcing. 

Market-driven opportunities 

Over the last decade, the pharmaceutical industry has changed – a lot. According to a McKinsey analysis, the share of drug launches by emerging life sciences companies more than tripled between 2006 and 2018. In 2020, small biopharma companies originated and launched 40% of all new drugs, according to an IQVIA report

Three key market factors have driven opportunities for small manufacturers to launch and commercialize their products:

  • Favorable business conditions: Strong economic growth, low-interest rates, and a wealth of venture capital investment combined with high valuations for life sciences companies have provided the monetary resources to launch independently.
  • More options for outsourcing: Technology advancements have opened the door for more vendors to provide sophisticated and specialized solutions that enable companies to effectively outsource commercialization capabilities to avoid investing in a large organizational footprint.  
  • Shift to niche therapeutic areas: Over the next five years, specialty drugs are projected to account for at least half of all revenue generated by pharmacies. Most of these new therapies focus on treating rare – often referred to as “orphan” – diseases. Niche drugs do not require a substantial commercial scale because they benefit smaller, more targeted patient populations.  

The benefits of commercial outsourcing

Smaller manufacturers are typically very lean organizations, which on the upside, enables them to be very agile and innovative. However, while large companies may turn to a service provider to fill a specific capability, capacity, or technology gap, smaller firms often need more comprehensive outsourcing support across the drug development and supply chain. And managing multiple vendors is complex and can be a challenge for lean companies. 

Traditionally, when emerging life science companies wanted to commercialize a pharmaceutical drug, they had two options: invest in and develop internal capabilities to go it on their own or license the product commercialization to large pharma. 

They have a third option now: outsource needed go-to-market capabilities to a third party. This approach can empower smaller drug companies to achieve commercial success on their own by leveraging external technology, infrastructure, and expertise. 

Strategic outsourcing can benefit the commercialization process by helping drug manufacturers:  

Tips for outsourcing success 

Commercial outsourcing can create more challenges than it solves, including increasing risk and decreasing profits if not done well. Here are some five for getting it right:

  1. Consider working with a third party that offers a broad range of commercialization solutions that can be customized for your needs to minimize the number of vendor relationships you need to manage.   
  2. Choose a vendor that approaches the relationship as an alliance and partnership that fosters trust and accountability. 
  3. Establish and track metrics to assess commercialization success and work closely with the vendor to course correct as issues arise.    
  4. Look for a partner with an integrated and flexible technology platform that provides a broad range of data and analytics capabilities. 
  5. Ensure your commercialization partner aligns with a nationwide dispense network and offers a high level of managed plan coverage, high reimbursement rates, and excellent compliance.

    Reaping the benefits of drug commercialization 

Commercialization strategies and efforts are highly complex, costly, and cumbersome to execute. As pharmaceutical markets, pipelines, and policies continue to evolve, life science companies of all sizes need an agile and flexible approach to optimize commercialization. 

Outsourcing drug commercialization to a third-party service provider can help emerging life science companies reap the benefits of successfully bringing their treatments to the market. The secret to success is to develop a strategic commercialization partnership.  

Phil’s “channel-in-a-box” solution enables lean and emerging life science companies to optimize the commercialization of their drugs effectively and efficiently. For more information on how Phil can help your company, visit us at phil.us/manufacturers.