Strategy & Management

Pharmaceutical Global Entity Portfolio Management

Creating and Maintaining Pharmaceutical Entities or Subsidiaries

06.04.2022 - In March 2022, Mercator by Citco published a report that provides direct insights into the practice and dynamics of Global Entity Portfolio Management (GEPM) within the pharmaceuticals sector – based on real-life data – when these businesses have been at the epicenter of one of the most significant global disrupters in modern times.

For the past two years, the Covid-19 pandemic has accelerated the way that pharmaceutical companies streamline their operations – from the supply chain stage through to sales and distribution. As companies sought to navigate the disruption and maximize efficiencies in order to meet demand, the need for a strong structure around GEPM became all the more important. At the same time, the robustness by which their global entities were established and managed was tested, as well as their knowledge of local regulatory changes brought in during the pandemic. In numerous instances, particularly those that involved licensing through local entities, a reliable GEPM framework acted as a vital support system for business-critical initiatives.

The analysis of this report focuses on three data points: regional and jurisdictional distribution of activities; duration for completing activities; and related cost.

This data is drawn directly from Mercator’s GEPM technology platform – Entica – which individually records all the activities undertaken for clients. The data from the pharmaceutical sector represents over $600 billion in market capital, with entities spread across 70 jurisdictions worldwide.

Global Centers of Pharma Entities

Mercator’s data shows that there exists a correlation between the duration of activities and pricing thereof per region. Generally, those that have the shortest duration would have mor optimized cost levels.

Europe remains the hub for a significant portion of pharma clients outside of North America, which is reflected in the relatively high volume of activities in that region. APAC, on the other hand, has traditionally been used as a location for business support and marketing services.

Most pharmaceutical companies are organizationally agile, with robust business continuity plans in place. In relation to the ability to implement changes in the structure of entities, the challenge was in the availability of resources to implement local requirements on schedule. Corporate services providers also had to deal with a changing regulatory landscape. Changes to global entities usually need to run in a synchronous manner, and local resources must be able to work through their backlog well.

A good portion of the projects it has accommodated for its pharma clients during the pandemic, says Mercator, are related to high-value, high-impact corporate initiatives intended to optimize their value-chain, minimizing the commercial impact of any disruptions of stakeholders. As such, there was a strong consideration for cost control. This itself was an area of challenge particularly in the first few months after the initial lockdown.

Cost and Duration Analysis

Based on Mercator’s records of actual activity data as captured in the company’s technology platform, when the cost and time of completing tasks is taken into consideration, the Netherlands comes out on top as the best jurisdiction to base entities: it is both one of the cheapest jurisdictions to operate, combined with some of the shortest timelines for completing corporate secretarial tasks – followed by Singapore and Belgium. All three jurisdictions have the ideal combination of cost levels and competitive duration. Further, all three are well regarded as global financial centers with a long-established history of managing international trade, and this translates into the ease with which multinationals can manage entities in these locations. Brazil was the most lowly ranked on cost and duration combined, followed by Republic of Korea and People’s Republic of China; all have a combination of relatively higher cost levels, and less competitive duration.

Guidance for Pharmaceutical Multinationals

Mercator emphasizes that the purpose of its report is not to advise pharmaceutical companies on where to base entities or subsidiaries – as this is obviously dictated by necessity – but to set expectation and provide foresight on the relative cost and time it will take to manage entities in each jurisdiction.

Nevertheless, the results of the report can assist pharmaceutical multinationals by serving as a benchmark for their company secretarial expenditure and efficiency in operating globally. In addition, the data may serve as a useful practical guide when setting up new overseas entities in their structure.


Note: The complete report ist available at


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