Henry’s Health And Medical Advice

Posted on: 2 July 2019

When you sell pharmaceuticals, you need to juggle your costs with the returns you earn on sales. This can be a fine line, especially if you market and sell competitive products. In some cases, it may make financial sense to team up with another pharmaceutical company to market and sell their products under in-license agreements.

How might your company benefit from this kind of licensing deal?

Mitigate Your Own Risk

When you work with in-license pharmaceuticals, you deal with products that have already been through a few stages of the development process. Here, your company may take on some end-stage development work on products which have already been partly developed and tested by another company. If all goes well, you may then commit to marketing and selling the product.

If you did all this work yourself and created products from scratch, then your risk would be higher. Not all ideas for pharmaceutical products make it to the shelves. Some fail in early development and testing stages and never make it to the end of the process.

If you pick up pharmaceutical products on an in-license basis, then the risk of failure is lower. The product has a greater chance of success. If a product has come through the early stages of development and testing without any significant problems, then you know that there is a greater chance that it will ultimately be fit to sell.

Save Money on Development Costs

If you produce your own pharmaceutical products, then your company could spend a fair amount of money on each line. You will have to pay for all ideation, research and development costs. You'll also have to take the product through various testing stages, all of which cost money. You may have increased staffing and outsourcing costs for each project you start.

If you pick up an in-license product after these stages, then your financial commitment is much lower. You effectively split overall costs with the original producer. So, you will take over or, sometimes, share any of the remaining development and testing costs for the product in its path to market.

This could save your company a significant amount of money. You'll also have to invest less time and manpower into product development.

To find out more about in-license pharmaceuticals and the kinds of products you might want to work with, contact other pharmaceutical companies who have a product they want to license out.