Thursday, December 17, 2009

4 reasons to say, "Hello, Europe. Be the first to meet my new bio-pharma product."

The teams at STINSON Brand Innovation help clients on both sides of the Atlantic with brand strategies and design execution to launch health, science, and technology products.  And we often collaborate with other business consultants who bring a unique perspective to the planning.

One such collaborator is Technology Commercialization Group.  TCG works with senior executives worldwide to help them launch and develop markets and business operations in the medical device, pharmaceutical, biotechnology, veterinary and related healthcare industries.

TCG recently shared this article with us that talks to companies in the United States about launching their products in Europe.  I offered to share it with you through our blog.

The authors are Dr. Robert C. Keefer and Dr. Reinhard Merz.

Dr. Keefer, one of TCG's principals, has 20 plus years of experience in business, finance and marketing for Fortune 500 pharmaceutical and diagnostic companies, and for a number of start-ups and emerging biotech, diagnostic and pharmaceutical companies.

Dr. Merz, based in Heidelberg, Germany, is director of European Operations and part of the TCG management team. He has 20 years of experience in medical research, healthcare marketing and e-business for Fortune 500, mid-sized and start-up firms.


There are good reasons for U.S. companies to launch their products in Europe – for certain products and in certain situations.  But, as always, you need to look before you leap. Even though Europe is becoming a more unified market, there are certain country-to-country market differences. Knowing these will help you avoid some pitfalls, as well as take advantage of the differences.

Although the United States is universally recognized as the holy grail of markets for pharmaceuticals and medical devices, many companies lose sight of the incremental opportunity for sales of their product in Europe. Europe - and certain European countries, in particular - can offer great advantages depending on the situation. This is true whether you've already launched your product in the United States, or you are considering Europe for the initial launch.

Here are four reasons why:

1.    Less costly clinical trials

Many countries from Central and Eastern Europe joined the European Union (EU) in 2004 and 2007: Estonia, Czech Republic, Hungary, Latvia, Lithuania, Poland, Slovakia, Slovenia, Bulgaria and Romania. Together with the implementation of the European Clinical Trial (EU CT) Directive, this created one pan-European clinical research market and unified the legal environment. A few of the cost/quality advantages to placing clinical research studies in these areas are:
  • Large population of over 300 million
  • Centralized healthcare system with large, highly specialized hospitals, especially in oncology, cardiology and rheumatology
  • High quality of medical care and clinical data confirmed by audits and inspections
  • Lower cost per completed case report form, due to fewer days needed to recruit one patient, low percentage of rejected recordings, and low number of queries per 100 case report form pages
2.    Easier approval

For medical devices, there is no European approval authority like the FDA (Food and Drug Administration). Instead, EU countries require medical devices to be issued a CE (Conformité Européenne) Mark by the European Commission before they can be marketed. The CE Mark certifies that the product meets EU standards for health, safety, quality and the environment. Once a product has received CE Marking, it can be marketed in all the EU countries (currently 27) without undergoing additional scrutiny or requirements from individual countries.

The CE Mark is more than just a rubber stamp, but earning it can be less of a hurdle compared to earning FDA approval. The first step is for companies to have an "Authorized Representative" in Europe - a subsidiary company or a legally appointed person in Europe to act for the manufacturer with regard to the regulatory aspects of the product.

In addition, companies need to obtain the CE Mark through the services of a "Notified Body," who will inspect and recommend approval of the CE Mark. The Notified Body will determine which class the product is in, from low to high risk, and work with the manufacturer to obtain:
  • Certification based on risk class
  • Documentation on the product's construction
  • Data supporting the product's safety, efficacy, quality control and risk assessment
  • Procedures for tracking and reporting incidents or adverse effects of the product once it is out in the marketplace
For pharmaceuticals, the route to approval depends on the novelty of the product.  The majority of existing medicines throughout the European Union's member states can be authorized more quickly because the decisions are made on a national basis.  Novel medicines are authorized through the EMEA. If the relevant Committee for Medicinal Products for Human Use (CHMP) or Veterinary Use (CVMP) concludes that quality, safety and efficacy of the medicinal product is sufficiently proven, it adopts a positive opinion. This is sent to the European Commission to be transformed into a marketing authorization valid for the whole of the European Union.

3.    Well-funded healthcare systems frequently cover a broader range of conditions

European insurers cover a broader range of diseases than in the United States. Fibromyalgia and chronic fatigue syndrome, for example, are controversial diagnoses in the United States, while in Europe they are recognized illnesses. If your diagnostic test or therapeutic treatment targets a condition that is not fully recognized in the United States, you may find better market acceptance in Europe. European reimbursement policies generally cover more conditions, but it is important to know the specific reimbursement policies and procedures on a country-by-country and organization-by-organization basis. And, of course, it is key to understand any pricing constraints, such as government controlled pricing, and how it differs by country.

4.    High-quality specialty centers

Although there are specialty healthcare centers in the United States - for pain or cancer treatment, for example - they are much more prevalent in Europe. By nature, Germans are organizers; so it is possible to find many specialized healthcare-related centers within its borders. For example, there are at least 50 centers that specialize in the treatment of tinnitus. It is important early on to identify the specialty centers that are most relevant to your product and where it is most likely to be used.

The existence of centers specializing in your therapeutic areas can give you several advantages to launching a pharmaceutical or medical device in Europe. First, recruiting candidates for clinical trials and tracking results is easier and more efficient if there are centers specializing in that condition or disease. The key opinion leaders (KOLs) at these centers can give you crucial feedback on current practices and the medical need for your product. In fact, KOLs may be even more important to a successful product launch in Europe than in other markets.

Second, if you are trying to get a foothold in the marketplace with a new product, selling your product first to a recognized center of excellence can lead to a more effective product launch. Let's say you have a medical device for the treatment of tinnitus. Targeting a few key specialty centers could generate word-of-mouth advertising as the physicians in those centers publish papers and give presentations to the wider tinnitus community.

Marketing that same product in the United States would be more difficult because physicians who specialize in tinnitus are not centralized.

Even with these advantages, a European launch is not without its complications, which means potential pitfalls if you don't know the individual geographical and customer markets and develop the right strategy for each:
  • Despite the EU, Europe is still very fragmented. The centralized European Commission administers the CE Mark for medical devices and approves pharmaceuticals for marketing; but questions of insurance, pricing, reimbursement and other healthcare issues are handled differently from country to country.  In Germany, for example, the authority for health insurance and reimbursement is separate from the German Ministry of Health; while in France, the Ministry of Health deals with all healthcare issues. It can take twice the time to resolve an issue in France as in Germany, because you are dealing with a government entity interested in multiple issues along with pricing. In Italy and Spain, it's even more fragmented with regional healthcare authorities influencing decisions.  For example, reimbursement can be different in Lombardia, in northern Italy, than it is in Sicily.
  • In each country, the specialists who treat patients may not be the same as in the United States. For instance in Germany, office specialists operating in the public sector, who give injections of hyaluronic acid for early stage arthritis, predominantly use multiple injection treatments; whereas orthopaedic physicians in Spain mostly operate in the private sector and use the more effective single injection therapies. The differences are driven by the different reimbursement policies in Germany and Spain — policies that apply to the physician as well as the product.
  • Other European countries not in the EU (Switzerland, for example) do not recognize the CE Mark and have their own systems for approving products for marketing.
Bottom line: if you are thinking about launching in Europe, you have to know these dynamics and select countries that allow you to get your product on the market more quickly and with the highest generation of revenue and profit. While it might be tempting to launch in a particular country because it is the biggest market, if approval or reimbursement hurdles are too high it will slow your launch and cost precious time and money.

An Opportunity Assessment, however, is a critical first step. We've said this before in discussing U.S. launches, and it's just as important with European launches. Surveying health care providers on a country-by-country basis will provide information that can be factored into the clinical trial protocols and product launch plans. Small differences in how a product is used or prescribed by providers can make a huge difference in where, and how big, the opportunity is and how the product is marketed.

Information from the Opportunity Assessment will allow you to:
  • decide which European countries to target for your launch, and in what order;
  • build a country-by-country forecast of unit volume, revenue and profit;
  • make a well-informed decision on whether to "go it alone" in marketing your product in Europe, sell your product through European distributors, or partner with a company already well established in Europe; 
  • and negotiate better performance-driven contracts with qualified distributors, if that is the chosen strategy.
For more information on TCG, you can visit, or call the U.S. office at 1-919-941-0700 or the European office at 49-6221-27262.

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