Co-promotion

Co promotion is a marketing practice that allows two or more companies to combine their sales force in order to promote a product under the same brand name and price with a single marketing strategy. It is considered as one of the two major forms of joint marketing (Kalb 1988). Co marketing is the other form and these terms are often confused. It is made through an agreement (the co promotion agreement) which requires a lot of collaboration between the sales and marketing organisations of both companies. One of the partners usually has a licence to exploit the product and the other partner is the originator or licensor. Through co promotion, a collaborative strategy, the consumer attraction is increased. It is a way co exploiting products. Co promotion is also known for offering high potential payment, it is the most attractive agreement type for both in and out licensers compared to other agreements such as co marketing. ]]At the beginning stage the average up front co promotion payment could be up to $18m, with a potential royalty rate of 25%. At the accomplishment stage these payments has the probability to increase to $53m with a maximum average of royalty rates up to 31%. It is considered as an expensive option for in licensers as the payments are high in contrast to co marketing. Since the 2000s co promotion started to play an important role in the pharmaceutical industry. Co promotion plays a major role in the pharmaceutical industries because in today's market, pharma companies are in a situation of falling productivity.

Merck and Agensys had an agreement in order to promote a cancer drug, it has cost $17.5 million in upfront payments and up to $11.5 million over the next year in milestone payments to develop the AGS PSCA drug for prostate cancer.]]

Exelixis in collaboration with GlaxoSmith Kline (helped to be positioned ad number 2 in the U. S).