The day of rare diseases on February 28 focussed attention once again this year on the high unmet medical need in view of the 6,000 to 8,000 ‘rare’ or ‘orphan diseases’ for which there are until now no comprehensive therapies.1 The summary of the medicines newly approved in 2017 in Germany may mark an advance with 9 of 31 orphan drugs in this regard.2 The potential for innovative foreign companies, however, is evident – combined with the fact that a market entry in Germany is critical for success at the European level, it is logical for start-ups in particular to take the German market into consideration as their first choice for an expansion. A successful concept for this will include both organizational and market-specific aspects.
Orphan drugs, in addition to other therapeutic agents, provide a good example of business ideas with a potential for expansion. That’s because those who are working in the area of orphan diseases are researching at the forefront: many rare diseases are genetically determined, and scientists need to make use of molecular biology methods to clarify the disease mechanisms.3 The corresponding medicinal products are not infrequently developed by start-ups based in the USA.
After market launch in the United States, the second step is to develop markets in Europe. Due to Germany’s size as well as its relatively rapid reimbursement, many such companies consider the country an attractive initial target market. The lessons learned in Germany can then be transferred to other European countries.
Laying the foundations depending on company size and requirements: organizationally, structurally, close to the market
In a market expansion, foreign companies are confronted with numerous internal and external challenges. In particular, newly established companies lack the functional and specialist resources that an established player has from the outset. A network of competent, independent service providers with different specializations provides a powerful and at the same time cost-effective solution to creating the organizational and structural conditions for successful establishment in Germany and launch of the products.
At the company level, the first steps include searching for a suitable location and setting up a subsidiary, for instance a capital company. Decisions also need to be made on the topics of distribution and logistics. The latter can pose a great challenge in gene therapies. Besides regulations under finance and labor law, there are specific topics for the pharmaceutical industry when founding a company: for instance, establishing pharmacovigilance, appointing information officers, creating approval procedures, or generating a wholesale license.
The product-specific and market-specific challenges with which even established players are confronted when launching a product in Germany consist mainly of a profound understanding of the market when deriving a launch strategy, and bringing about a successful product launch. Once the market mechanisms, treatment guidelines and relevant stakeholders are known, it is easier for companies to develop market access and price strategies and address the right target groups – from medical specialist groups to patient organizations to public health policy.
The time required and the complexity of these tasks are often underestimated. At the same time, the individuals responsible are making decisions with a great scope, decisions are then difficult to revise. Whether for orphan drugs or other new products: for companies abroad of varying sizes, collaborating with cross-functional teams of local consultants is worthwhile for successful entry into the German market.