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When to Utilize Commercial Outsourcing


When deciding on the right commercialization model, organizations must consider multiple factors, including the asset or platform they possess, the launch timing, the funding required, and staffing expertise.

In recent years, the commercialization landscape has undergone changes with the emergence of new commercial models. These models have been enabled by access to capital, the need to customize approaches for products with small patient populations, and the development of contract commercial service companies. According to industry analysts, the global pharma outsourcing market was estimated at $67 billion (USD) in 2022 and is expected to have a compound annual growth rate of 5.4%.1 A significant contributor to this growth is the increase in demand for contract commercial services. Small biopharma companies developed and launched 40% of the new drugs in 2020.2 Many companies choose to outsource clinical trial operations, and they are now also turning to outsourcing all or part of their commercial operations.

Deciding whether to outsource is something all companies must consider, and it’s not a simple one. It requires careful consideration of the factors that may impact the success of the launch. The advantages for companies outsourcing certain functions to vendors include mitigating launch risks, talent acquisition difficulties, and cost overruns.

In this article, we will discuss the factors impacting whether to outsource as well as how the contract commercial outsourcing model provides flexibility and agility (allowing for cost savings), transparency to investors, and the ability to align teams to milestones and deliverables.

Type of asset or platform

When it comes to pharma commercial models, selecting the right approach for a particular asset or platform is crucial. The type of asset or platform plays a significant role in determining the best strategy to employ. For example, if the asset targets a single indication with a relatively narrow market, the organization may find it more cost-effective to outsource commercial operations to a vendor with expertise and resources specific to that market. On the other hand, if the asset is a platform with multiple indications or potential applications, it may be more advantageous to retain some knowledge in-house to leverage and build upon as the organization launches subsequent assets. In addition to the type of asset, other factors, such as the organization's goals, resources, and competitive landscape, may also come into play when determining the most suitable commercialization model.

Launch timing

The launch timing of an asset is another crucial factor to consider when deciding on the appropriate commercialization model. The certainty of the timing of approval, supply strategy, and the competitive intensity of a therapeutic area all factor into determining the optimal model for launching the asset. Regulatory approval often defines the launch timing; although manufacturing capacity can become a factor and shift planned launch dates. Competitive intensity can shift indication prioritization and create efforts to accelerate trial completion. There are a myriad of things that could change the timeline for a product. Outsourcing is a way for pharma organizations to manage the periods where launch activities need to be sped up or slowed down.

Then there is the timing of bringing in commercial leadership. Ideally, an organization would have the chief commercial officer onboard about three years prior to regulatory approval, but experienced veterans want to wait until an asset is approved, which can lead to a time gap. This is especially true in oncology, where expertise is in high demand. Finding a chief commercial officer willing to join prior to Phase III data readout is difficult and expensive. Many organizations rely on outsourced commercial partners to ensure they have experienced talent to help with early market shaping.

Funding required

The amount of funding required to commercialize the asset is another important factor to consider. Development delays for assets are frequent, and accurately predicting the cash burn rate to support a large headcount with an internal commercialization team can be risky. For traditional pharma companies, financial resources may not be as constraining as they are for biotech companies. But the issue for the larger companies is still the specific experience and the cost of hiring shared service teams. All these situations could be indicators that an outsourced model with more flexibility may be appropriate.

Staffing and expertise

Staffing and expertise are also critical factors to consider when deciding on the appropriate commercialization model. The complexity of the therapeutic area, the team's understanding of a rare disease launch, and the lack of prior models and experience across the industry (especially in the case of cell and gene therapies) can be challenging for companies without a playbook to follow.

Given today’s tight labor market and access to talent and more open roles than people to fill them, you can’t count on having the talent you might normally have in-house. Add to those delays in manufacturing or regulatory discussions from FDA as well as the possibility of layoffs, the outsourced model may be the best or only option.

A good example that we experienced was with an established billion-dollar pharma company. Their historical experience launching various line extensions had not been successful. After a couple of disappointing results, they decided to outsource a six-person launch team of marketing and market access experts to be the defacto line extension launch team, who embedded themselves within the company for 12 months. This was a success. The well-resourced team beat expectations and provided support for the internal cross-functional team members. No layoffs or redeployment of internal employees were necessary.

Deciding if or when to outsource can be a challenge for companies. But sometimes, outsourcing can decrease expenses, manage risk, provide access to specialized knowledge, accelerate the development and go-to market strategies of therapies, and (ultimately) enable companies to get critical therapies to the patients who need them.


  1. Yahoo Finance, Global Biotechnology/Pharmaceutical Services Outsourcing Market to Reach $102.2 Billion by 2030, April 17, 2023, https://finance.yahoo.com/news/global-biotechnology-pharmaceutical-services-outsourcing-115600343.html
  2. IQVIA Institute, Global Trends in R&D 2021, May 19, 2021, https://www.iqvia.com/insights/the-iqvia-institute/reports/global-trends-in-r-and-d

About the authors

Beth Schurman, COO, Herspiegel Consulting; Brent Herspiegel, CEO, Herspiegel Consulting.

Brent Herspiegel is the CEO of Herspiegel Consulting, and Beth Schurman is the COO of Herspiegel Consulting.

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