This document outlines four business models for pharmaceutical marketing and distribution partnerships: 1. Completely separate marketing and distribution entities, with one party handling marketing and the other handling distribution. 2. Full agency model, where one party handles all marketing and distribution tasks. 3. Hybrid model 1, where one party handles marketing and distribution and receives a share of profits. 4. Hybrid model 2, where both parties share costs and profits equally at 50% each. The models vary in their financial structures and levels of collaboration between parties. Ensuring high efficiency and coordination is important for the success of any model.

1. PHARMACEUTICAL
MARKETING AND
DISTRIBUTION
Practical Business Models
eBook
Kena Roots Co.
Dr. Hani Malkawi

2. Contents
Preface
Business Model – 1: Completely separate marketing and distribution entities
Business Model – 2: Full agency (Marketing and distribution)
Business Model – 3: Hybrid type 1 (Cooperation in carrying out marketing and sales tasks)
Business Model – 4: Hybrid type 2 (Cooperation in carrying out marketing and sales tasks)
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12
16

3. 3
Preface
For the success of any pharmaceutical product, it needs to build a
successful business partnerships to ensure the high quality finish product
on the one hand, and to ensure effective marketing and distribution of it.
There are many important factors that play a key role in choosing the
suitable partner with specific business model, for example, marketing
company must have high efficiency in terms of strategic and marketing
planning, branding planning then in terms of finance capability that
enables it to build a strong brand. And for the distribution company must
have expanded and multiple distribution channels and solid customer
services base, which make it able to achieve the largest amount of sales
and customer services.
Because of the big differences and diversity among companies in terms
of their marketing and distribution capabilities, beside to other important
factors and requirements, we propose four different business models of
work among manufacturing, marketing and distribution companies, as
each of these business models has its own conditions, requirements and
circumstances, as we will see later in the details of each model.
S

4. 4
Business Model – 1: Completely separate marketing
and distribution entities.
In this business model, one of the parties bears full responsibility for
marketing and its expenses in terms of marketing staff expenses,
medical advertising expenses and other expenses related to the
marketing process (for example, the company that manufactures the
product), while the other party bears the responsibility for selling and
distributing the product in the market and the accompanying expenses
(for example, the company is the exclusive distributor for the product in
the region).

5. 5
The perfect business
situation to apply this
model
The appropriate business situation for
applying this model is one in which the
company responsible for marketing
possesses great competence in terms of
managing the marketing process at all
levels and possesses the necessary
financial capacity to implement marketing
and promotional plans for the product.
The appropriate business situation for
applying this model is one in which the
company responsible for selling and
distributing has wide distribution
channels, a big list of customers, an
effectively qualified sales staff in
addition to sufficient financial capacity
to conduct all matters of sale, collection
and customer service.

6. A guarantee for the marketing company (manufacturer)
to build a brand in the market, and this is due to the
fact that the entire marketing process is under its
control.
Advantages and benefits
of this model
A guarantee for the marketing company (manufacturer)
to achieve the largest market share and the highest
possible sales of the product.
A guarantee for the marketing company (manufacturer)
to build a healthy product life cycle.

7. Financial savings for the distributing company of all
high marketing expenses, especially at the product
launch phase (Relatively little financial investment).
Advantages and benefits
of this model
A guarantee for the distributing company to build a
stable market and a continuous growth in sales of
product with a guarantee of a fixed profit rate.
.
To ensure the achievement of the benefits of this model for
both parties, both parties require the ability and high
efficiency in their field of responsibility, in addition to great
coordination in managing the work between them.

8. 8
Business Model – 2: Full agency (Marketing and
distribution)
In this model, the manufacturing company grants an exclusive
agency to a company whose tasks and responsibilities are to carry
out all marketing, selling, distribution, and related expenses,
meaning that all marketing and sales tasks are delegated to one of
the parties

9. 9
The perfect business
situation to apply this
model
This model is adopted for more than one
reason, such as:
When the manufacturer relies on focusing
on research and development to
produce distinctive and high-quality items,
so the manufacturer intends to hand over
marketing and selling the products to
another specialized company and within
certain conditions
If the manufacturer revenue and its
financial situation is not sufficient to
carry out the marketing expenses in
addition to all other Research and
development and manufacturing
expenses.

10. In the event that the marketing and sales company is
chosen correctly, this guarantees the manufacturing
company a great focus and great specialization in
developing competitive and high-quality products.
Advantages and benefits
of this model
For the marketing and distribution company,
representing the items of a high-quality with good
competitive advantages is an attractive investment
opportunity and a source of income for the company, in
addition to the constant development of items by the
manufacturer (due to its focusing on Research and
development and manufacturing) that will increase the
chances of development and increase the profitability
of the marketing company.
.

11. One of the main risks of this model is that because the
marketing of the items has completely slipped out of
the control of the manufacturer, the manufacturer
loses control over the process of building the
branding, and the other party, the
company responsible for marketing, distribution and
sale determines whether the sales of the item,
marketing, and the possibility of the construction of
the branding succeed or not.
Advantages and benefits
of this model …..
To ensure that this model succeeds in achieving the objectives of both parties, agreement
clauses must be formulated which include an appropriate ceiling on sales, a number of
delegates, marketing plans, etc. This ensures efficient work on items and that each party
contributes to the highest level of performance at work.
.

12. 12
Business Model – 3: Hybrid type 1 (Cooperation
in carrying out marketing and sales tasks)
In this business model, the manufacturing company manufacture and
supplies the goods as free of charge to the company (Other party) who
responsible for marketing and distribution, and then the company who
is responsible for marketing and distribution bears all marketing and
sales expenses including the team salaries.
In the end, the manufacturing company is granted a share of the net
profits as a percentage to be agreed upon, and it is often (40-50)% of
net profit.

13. 13
The perfect business
situation to apply this
model
This model can be adopted in one of the
following cases:
When the financial situation of both parties
does not allow them to carry out a strong
marketing and selling process sufficient to
build a brand, then the financial burdens,
planning and marketing and sales
management operations are shared
between the two parties.
When each party in this business
relationship has qualifications,
competence and skills that can benefit
the great success in the work, when
sharing with the other party

14. The manufacturing company is guaranteed to
participate in the planning and management of
marketing and sales, and thus participate in product
branding which is the main target of the manufacturer .
Advantages and benefits
of this model
The manufacturing company is guaranteed an
appropriate profit rate in the event of success in the
work.
.
This type of participation guarantees the company
responsible for marketing and sales to reduce the
amount of investment in the items, and maintaining a
good and appropriate profit rate.
.

15. This model guarantees great chances of success in
marketing and sales if the expertise and competence of
both parties are properly invested..
Advantages and benefits
of this model ….
To ensure the achievement of the benefits of this model for both
parties, both parties require the ability and high efficiency in
their field of responsibility, in addition to great coordination in
managing the work between them.

16. 16
Business Model – 4: Hybrid type 2 (Cooperation
in carrying out marketing and sales tasks)
In this model, partnership takes place between the manufacturing
company and the company responsible for marketing and selling at all
levels, so participation takes place at a rate of (50%) for each party in all
expenses starting from the amount value of the goods and
to include all marketing and sales expenses and other expenses.
This participation also includes the share of each party, at a rate of
(50%) for each of them, from the annual net profits

17. 17
The perfect business
situation to apply this
model
This model can be adopted in one of the
following cases:
When the financial situation of both parties
does not allow them to carry out a strong
marketing and selling process sufficient to
build a brand, then the financial burdens,
planning and marketing and sales
management operations are shared
between the two parties.
When each party in this business
relationship has qualifications,
competence and skills that can benefit
the great success in the work, when
sharing with the other party

18. The manufacturing company is guaranteed to
participate in the planning and management of
marketing and sales, and thus participate in product
branding which is the main target of the manufacturer .
Advantages and benefits
of this model
The manufacturing company is guaranteed an
appropriate profit rate in the event of success in the
work.
.
This type of participation guarantees the company
responsible for marketing and sales to reduce the
amount of investment in the items, and maintaining a
good and appropriate profit rate.
.

19. This model guarantees great chances of success in
marketing and sales if the expertise and competence of
both parties are properly invested..
Advantages and benefits
of this model ….
To ensure the achievement of the benefits of this model for both
parties, both parties require the ability and high efficiency in
their field of responsibility, in addition to great coordination in
managing the work between them.