With co-marketing you have the same product, but different brands. With co-promotion, there is only 1 brand, but 2 different sales forces.
In Co-marketing a pharmaceutical company can distribute its products. This business model allows two or more organizations to market a drug under at least two distinct trademarks in any particular country. The partner is granted control of the distribution, price and promotion of the product which is usually obtained either in bulk or finished form from originator at an agreed supply price, a fact which often results in some form of licence and supply agreement. There is no direct sharing of revenue or profit. Both companies are competing against each other with the same drug and revenue is distributed by means of an agreed supply price. Classical examples of such agreements are the marketing of lisinopril by Merck under the name of Prinivil and by Zeneca under the name of Zestril, and the sale of omeprazole by Fujisawa-Astra under the name of Omepral and by Yoshitomi under the name of Omeprazon.
To understand the importance of co-promotion agreements, one only has to take the example of Zantac (ranitidine) for Glaxo (now GlaxoSmith Kline) and Roche in the 1980s. It catapulted Glaxo from nowhere to Number 2 in the U.S. in one decade, rescued Roche from oblivion caused by the patent expiration of diazepam.
Another example of a co-promotion deal was the one signed in 1998 between Searle, the pharmaceutical division of Monsanto and Pfizer for Celebex (celecoxib). Searle realized during the development of its novel non-steroidal anti-inflammatory drug (NSAID) that the company did not possess the necessary U.S. sales force to maximize the sales potential, especially given the fact that Merck was developing a similar product Vioxx. Searle decided to cooperate with Pfizer, who have one of the largest sales forces in the world, and received a total upfront payment of $85 million plus an additional $15 million following expansion of the territory according to the. This deal, however, did not cover territory in Japan where Searle had signed a separate agreement with Yamanouchi.
Co-promotion of products is very common in today‘s marketplace. Sometimes two and even three sales forces will promote the same pharmaceutical product. Each sales force may have different or even the same sales objectives. You will typically be given a list of physicians and your sales ―partners in your territory will also be given a list. Your sales territory will overlap with your partners on some if not all of these physicians. The reason they want several people calling on the same physician is so that they will hear the sales message more often. Research has shown that the more the physician hears the message, the more likely the physician is to remember it and to buy into the message is a good one.
Significance of Copromotion and Comarketing deal in Pharmaceutical and Biopharmaceutical Industry
In both co-promotion and co-marketing deals, the goal is to maximize the commercial success of the pharmaceutical product by leveraging the strengths and resources of multiple companies. The specific terms and structures of these agreements can vary widely and depend on the objectives and strategies of the collaborating companies.
Keep watchful eyes on deal type and agreement drafting
Whether it is comarketing or copromotion deal, it is essential for pharmaceutical companies to carefully negotiate and define the terms of these agreements, as they can have a significant impact on the product’s success, regulatory compliance, and revenue sharing. Additionally, the legal and regulatory frameworks governing these agreements can vary from one region to another, further adding complexity to such collaborations.