Licensing Agreements in the Pharmaceutical Industry

Abstract

This paper studies the licensing process, the mode of cooperation that is most frequently encountered in the pharmaceutical sector. Within the framework of a licensing agreement, the ‘donor’ transfers an innovation, a ‘brand’ and sometimes the raw material while the ‘beneficiary’ is committed to the payment of royalties¹ and other forms of payments (fee upon signing, annual fee…) that may also involve profit sharing over the product lifecycle. This study however, will be limited to an examination of two particular cases of licensing that involve agreements of co-promotion and co-marketing between pharmaceutical firms, which result in the constitution of fairly stable networks and provide both cost and competitive advantages. It has published in part in Direction & Gestion.