For decades, pharmaceutical companies have largely viewed legacy brands at the tail of the portfolio through a lens of basic maintenance. Once a drug lost primary patent protection or hit a certain age, it was managed for steady — if declining — cash flow with minimal effort.
Amid today’s competitive and macroeconomic pressures, though, yesterday’s mature-product management strategies are falling short. With the largest patent cliff in history looming before the global pharmaceutical industry, companies are looking for ways to fill upcoming revenue gaps. Mature products already contribute significantly to the earnings of major pharmaceutical companies, with estimates putting that contribution at 20% to 40% of annual revenue. Without radical rebalancing of portfolios across the board, that percentage is all but guaranteed to increase in the coming years.
In this environment, optimizing the value of mature products is increasingly critical to corporate performance, but it requires a more nuanced and tactical approach than legacy portfolio-support models. Far too many companies continue to manage mature products using resources and infrastructure designed for earlier-stage assets. The resulting inefficiencies can erode margins while diverting internal teams’ attention from high-value innovation.
“Drugs that are late in the product life cycle require a very different approach to commercialization than new launches,” said Kirsten Jacobs, senior vice president of regulatory, compliance and pharmacovigilance at Cencora. “Marketing costs should go down, since marketing activities aren’t needed to the same extent as just after launch. Reducing headcount can lower costs. So can centralizing operations.”
Growing numbers of executive teams are turning to strategic outsourcing of regulatory, safety and quality functions for mature products, with the aim of reducing expenditures and driving greater value throughout the remainder of their life cycles.
Let’s look closer at some of the benefits of this approach.
Reduced costs and operational burden
When a mature brand continues to deliver revenue, those funds can be funneled into other areas of innovation, but this strategy is most effective when the company reduces operational costs as much as possible. Outsourcing is advantageous in this situation because it can lower product maintenance costs while ensuring that the product will continue to meet regulatory, safety and quality requirements in all the markets where it’s available.
By outsourcing regulatory, supply chain, pharmacovigilance and certain aspects of commercial operations, a company can minimize the selling, general and administrative expenses (SG&A) associated with a product while continuing to capture value. This model works best when the outsourcing partner can combine centralized oversight with local execution to drive compliance, efficiency and scalability across regions.
“A top-20 multinational biopharmaceutical company wanted to ensure that its mature products would remain available to the patients who needed them,” Stephan Hütter, director of global client engagement at Cencora, explained. “But its experienced internal team of regulatory-affairs professionals needed to be freed from routine life cycle maintenance work so that they could focus on new brand development. They turned to us for outsourced post-approval regulatory services. Delivered by a team of more than 150 dedicated specialists, the program had reduced the company’s internal workload by 20% by the end of its second year in operation.”
Hütter also noted that the most effective partners apply outcome-based models with shared risk-and-reward structures. This approach supports the continuity and scalability of intellectual property as well as financial predictability.
Access to specialized expertise at scale
Keeping legacy products on the market requires both local and global expertise. If a mature product portfolio spans multiple markets and regions — as is typical — each local market will have its own labeling, safety reporting and product-supply processes, along with its unique regulatory requirements. Turning over this work to an outsourced regulatory and/or logistics partner can give pharmaceutical companies access to in-region support personnel, reducing the strain on internal resources.
In Europe, health technology assessment (HTA) bodies are increasingly asking for evidence of the clinical and economic value of mature or off-patent products for which continuing reimbursement is sought. An outsourcing partner with expertise in health economics and outcomes research, biostatistics, policy and market access can help out-of-market companies meet European HTA requirements efficiently and without a need for cross-border hiring. The partner can also supply responsible persons and qualified persons for pharmacovigilance.
An outsourcing partner can also advise on market-access optimization as a product matures, helping brand owners decide which country mix and contracting strategy will be most financially sustainable based on reimbursement and positioning relative to competitors.
“A rapidly growing specialty pharmaceutical company headquartered in the Asia-Pacific region was maintaining a brand portfolio spanning more than 10 brands across six therapeutic areas,” said Janice Cassamajor, director of customer success at Cencora. “The company engaged Cencora to deliver a full-scope regulatory life cycle maintenance program, with local quality assurance and pharmacovigilance in the EU and a dedicated global program manager overseeing all workstreams.”
The collaboration has enabled the business to significantly reduce operational costs and focus more deeply on core competencies. With a trusted regulatory function working in close alignment with their internal team, the company has continued to maintain high standards of compliance and is now well-positioned to expand into additional markets.
Guidance on reigniting the value of mature products
In some cases, there are opportunities to breathe new life into an established brand, perhaps by creating new formulations or fixed-dose combinations, identifying secondary indications, or expanding into underpenetrated regions. An outsourcing partner can help pharmaceutical companies assess the regulatory, reimbursement and policy environment in potential new target markets. It can also extend the brand owner’s capabilities in key areas, such as launching additional clinical studies or repurposing data for indication expansion. When an outsourcing partner focuses on operational execution, internal teams can keep their attention on strategy and innovation.
In the current economic climate, sustaining revenue from established product lines while keeping maintenance costs low can be challenging. Not only does strategic outsourcing free internal teams for higher-value initiatives, but it also has the potential to increase portfolio ROI by supporting market expansion. Partnering with the right team of experts makes it possible to optimize resources and product value, all while maintaining a high standard of compliance. In some cases, this strategy can even lead to growth.
This article is sponsored content. The information provided does not constitute legal advice and may contain marketing statements regarding Cencora. The reader is strongly encouraged to review available information related to the topics discussed in the article and to rely on their own experience and expertise in making decisions related thereto.
