Although co-promotion attracts more companies than co-marketing because of its potential to significantly increase the effectiveness of sales forces, co-marketing offers more opportunities than initially thought. Due to the lower payments that the sublicensor expects, co-marketing is particularly suitable for sublicensors with liquidity bottlenecks. In early-stage co-marketing agreements, the average maximum upfront payment is $16 million and the royalty is about 18%. In late-stage licenses, payments are also significantly lower than co-promotion, with upfront payments of about $39 million and royalties of 24% of revenues. These results are presented in the following figure and table. Initially, the average upfront payment for co-promotion could reach $18 million, with a potential royalty of 25%. In the performance phase, these payments are likely to reach $53 million, with a maximum royalty average of up to 31%. It is considered an expensive option for licensees because payments are high, unlike co-marketing. [7] With the rise of biotechnology over the past 20 years, licensing agreements have become an essential tool in pharmaceutical companies` efforts to maintain a healthy flow of products and access new technologies.

As deals have become more complex over the past decade, biotech and pharmaceutical companies face a number of difficult decisions in licensing negotiations. “When it comes to the other benefits of co-marketing, Datamonitor`s main research found that if the target market is large enough, co-marketing can provide a higher return on investment than co-promotion. This is due to the higher revenue leverage that the sublicens can achieve by marketing another brand itself, which in turn benefits the sublicension through higher royalties. “Co-promotion agreements are often used by pharmaceutical companies to improve the marketing and penetration of products in certain countries. [9] Since the 2000s, co-promotion has played an important role in the pharmaceutical industry. In early co-promotion agreements (i.e., from initial phase to Phase I), Datamonitor found that the average upfront payment can be as high as $18 million, with a potential royalty of 25%. These payments increase significantly in late-stage co-promotion agreements (i.e., starting with Phase II), where maximum upfront payments are approximately $53 million and royalties are a maximum of 31% on average. Because upfront payments and royalties for co-promotion agreements are high, this is an expensive option for short-term licensees, especially compared to co-marketing. However, high payouts are offset by the greater potential to expand audience penetration with a combined sales force, thus offering more long-term benefits.

The analysis of real contracts makes it possible to evaluate the following points: Co-promotion plays a major role in the pharmaceutical industry, since pharmaceutical companies in the current market are in a situation of declining productivity. [8] Access to new products through collaboration with biotech companies allows pharmaceutical companies to expand their influence and ensure their success in the market. .