New paths to product value: Strategies to optimize the mature product portfolio

Some organizations are choosing to scale back or sell off assets that don’t align with their longer-term objectives. They may do this through single product sales, out-licensing their mature portfolio, or carving out and selling off whole portfolios, allowing them to focus on core therapies and innovation. 

To navigate these “release” strategies, companies typically rely on transitional service agreements (TSAs) to support efficient management of the transition. Often, the seller will retain elements of the portfolio for a defined period, such as handling regulatory filings. TSAs allow the seller to manage these activities through outsourcing while continuing to maintain revenue streams. 

The time involved to transfer assets can vary significantly depending on country-specific timelines and complexity, for example, if the portfolio is commercialized in various geographies. By working with external partners to support these activities, organizations can focus on their core objectives. 

Another way that companies can choose to scale back is through licensing agreements, which can allow larger companies to continue to generate revenue from a mature product or portfolio, expand into new markets, and at the same time shift the focus to innovation.⁴ 

The methods these organizations adopt to scale back on nonaligned assets can vary; however, the objective of shifting the focus to core therapies and innovation remains the same. Engaging outsourcing partners early on to develop a strategic approach that will support the objectives can help any transition to be handled more seamlessly. Not only can it help companies achieve cost savings, but a strategic partner can also provide access to digital innovation, process innovation, and thought leadership. 

A second model that companies are choosing to adopt is to retain stable brands that continue to provide revenue to support innovation, but scale back on investment in those brands. These companies recognize that their mature portfolio continues to bring value, but to retain profitability they must adopt leaner operations and find ways to save costs. Outsourcing is an important lever for reducing costs while retaining and even improving margins. 

A key driver for outsourcing is to lower the cost of product maintenance while at the same time keeping compliance status of the product from a regulatory, safety, and quality perspective. One model that companies are adopting is outcomes-based where the service provider’s compensation is tied to key results, such as cost savings achieved, cycle times improved, or compliance targets met. This model draws on the provider’s domain expertise – regulatory, quality, etc. – as well as technology capabilities to automate processes, further extending value.⁵

While mature products might not deliver the profit margins that patented products do, they can still be strategically and financially valuable as long as they are resourced appropriately.  Outsourcing allows companies to retain that value and meet compliance requirements while reducing internal overhead. For companies whose mature products are sold in multiple markets, transferring regulatory, safety, quality, and operational maintenance activities to a strategic partner removes much of the complexity of managing the demands of different regions. 

Whatever path a company chooses to take – release, retain, or reignite – managing the mature portfolio requires a nuanced approach. Determining how to proceed with a mature product or portfolio requires careful consideration. It requires an assessment of the organization’s operating models and partner ecosystems. And it requires companies to understand where they are on their own journey so they can adopt an outsourcing strategy that best fits their path and objectives.