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Launching a Drug in Europe: Pros & Cons for Biotech & Pharma companies

Irvine, California

For US-based biotech and pharma companies, directly launching a drug in Europe is no simple feat. The diversity of each member state’s regulations poses enough of a challenge to sway many toward out-licensing. But with the right asset, going it alone can be well worth the effort. Take BioMarin, for example. After launching the drug Naglazyme they saw a significant increase in stock price (205% over a two-year period) and market capitalization, and globalized their reach (Source: The Business & Medicine Report).

In this blog, we take a look at the pros and cons of flying solo, and discuss the criteria necessary for success if a company chooses that route.

The cons of going it alone when launching in Europe:

1. Increased risk

Europe, with its 28 member states, has a highly diverse regulatory landscape. This is a mountain that must be traversed by companies who want to go it alone, and is a somewhat daunting prospect; more regulations mean more compliance risk.

To mitigate this risk, companies often opt to out-license their drug to a company that has established capabilities in that region.

2. Added complexity

It’s not just compliance risk that increases with more regulations, it’s also complexity. To launch a product in Europe, companies must build out capabilities for local distribution, commercial sales, and medical affairs to name a few.

The supply chain invariably becomes more complex, with import duties, taxes, and distribution regulations to consider.

When you take into account how many regions these factors need to be applied to, it’s easy to understand why companies choose the simpler option.

3. Higher cost

Building ‘brick-and-mortar’ operations and a strong team across multiple regions (while vital to the success of a drug launch) are not cheap endeavors.

The upfront investment necessary to fly solo, and the likelihood of shareholder dilution as a result, are often major considerations for biotech and pharma companies looking to enter the European market.

With increasing competition and cost pressures curtailing spending in the life sciences industry, decision makers are becoming less and less likely to take the risk.

The pros of going it alone when launching in Europe:

1. Financial reward

While out-licensing is certainly the less complex option, it can mean losing out on significant value. Typically, companies that launch rather than license their assets outperform in stock price. Capital markets also tend to reward these high-value companies ‘…reflective of their new-found global capabilities’. (Source: The Business & Medicine Report)

2. More control

Another reason companies choose to keep a launch in-house is to maintain control over their product.

Out-licensing involves relinquishing control over the messaging, commercialization, pricing, and branding of a product. If positioning itself as a global company and building a commercial footprint in a new region is high on a company’s priority list, decision makers might be reticent to hand over the reins.

3. New opportunities

Investing in new operations and teams across multiple regions brings more than just added cost and complexity—it also brings new opportunities!

With global infrastructure in place, a company can leverage its new-found international capabilities to build a broader portfolio. For US companies seeking international growth and expansion, launching in Europe is the next logical step since the branded pharmaceutical spend is close to that of the US.

Success criteria:

There’s no ‘one-size-fits-all’ solution for companies trying to decide between launching and licensing. While there are pros and cons to both, there are a number of internal factors that should be considered before opting to go it alone. These include:

Picking the right drug:

Perhaps the single most important consideration in this decision is whether the drug being launched will make keeping it in-house valuable in terms ROI.

For example, is it worth building out an entire facility to produce a drug that is only going to be used by a small group of prescribers? Conversely, if your value proposition is strong enough to ensure pricing power, is out-licensing leaving value on the table?

For the right drug, going it alone can create value that out-licensing simply can’t. In depth research into whether a drug is ‘right’ should therefore be the starting point if you’re faced with the ‘launch or license’ decision.

Getting the right people on the bus

As Jim Collins astutely put, ‘…leaders of companies that go from good to great…start by getting the right people on the bus…’

Hiring the right talent to guide a new venture towards success is vital—dedicated people who are experienced in launch planning and execution, and who understand the nuances of European markets, is highly recommended. If the right people can’t be secured, out-licensing might be the better option.


European markets, in all their complexity, do not lend themselves to a quick and painless ‘launch-ready’ process.

Careful planning and preparation will mitigate the risk of unforeseen roadblocks causing delays and increasing costs.

We recommend allowing a lead time of two to three years to ensure a product is ready to launch. If a company wants its product to launch faster than that, going it alone could be risky.


Enterey’s team of highly experienced consultants specialize in helping companies realize their strategic goals. So, if you are faced with the ‘launch or license’ decision, or you’ve already decided which route you’re going to take and you need help getting there, we’re who you need.

Together we can develop a plan, unique to your company’s needs, that drives you towards success in the most efficient way.

Take a look at our client case studies to get an idea of the results we produce. Then get in touch with me, Mike Ferletic (CEO), on mike.ferletic@enterey.com to discuss the next steps.

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