On the surface, gross sales figures suggest a thriving pharmaceutical industry. However, a closer look under the hood reveals a more nuanced picture when the true cost of those gains is included. After accounting for the cost to engage stakeholders with promotion and access, not to mention recouping research and development (R&D) expenditure, a growing share of brands fail to recover their launch investment.

Break-even investment provides a clear view into the true state of the industry, making it important to assess at multiple levels, including individual brands, organizations, therapeutic areas, and the industry as a whole. For many products, even robust clinical profiles are no longer enough to guarantee timely payback. This dynamic requires a reimagining of how success is measured beyond simple utilization metrics to include the return of invested dollars. Break-even analyses are now essential to govern how organizations deploy resources, manage access, and sequence their investments over several years, not just on how rapidly sales climb in the first few quarters.

The erosion of the value of promotional investment

Break-even, in simple terms, is the point at which a product’s cumulative revenue begins to exceed its cumulative investments and can be calculated across numerous expenditure types. Take, for example, promotional break-even which compares the gross sales of a product to the cost of promoting the product excluding any access or other gross-to-net deductions. The share of new products that achieve promotional break-even by year three has fallen by about 16% in the post-pandemic period compared to pre-pandemic launches. For drugs launched between 2020–2022, 64% reach break-even by their third year on the market, versus 76% of those launched in the late 2010s. Over the past decade, less than 50% of products achieved promotional break-even in their first year, indicating that promotional costs often exceeded the gross revenue generated.

At the brand level, an analysis of top performing launches spanning diabetes, neurology, immunology, and dermatology illustrate the variation and rising challenge in time to promotional break-even over recent years. Despite each product becoming a high-performing brand, the average time for promotional break-even was 11 months, with some products not securing break-even until well into their second year.

Several structural shifts sit behind this erosion. Beginning in the pandemic, companies accelerated promotional spending into the earliest months of launch. While this aggressive early investment is intended to jump-start uptake, its side effect is delaying break-even.

In parallel, modern launches have faced a difficult environment characterized by flattening uptake trajectories, rising payer control, and lifecycle compression  due to policy changes such as the Inflation Reduction Act. Revenue that once ramped up quickly enough to offset launch costs now accumulates more gradually. For many products, the intersection between cumulative cost and cumulative profit occurs later, if at all.

Break-even is highly context dependent

Unmet need, competitive intensity, and access complexity shape revenue trajectories in fundamentally different ways, influencing the timelines for different therapeutic areas to obtain promotional break-even. In immunology, a high-cost but high-demand area, nearly 68% of products break even in their first year, and over 92% achieve break-even by Year 3. These therapies (for conditions like rheumatoid arthritis or psoriasis) often benefit from strong demand, high per-patient values, and effective market access strategies, allowing faster payback.

In contrast, in dermatology, only about 37% of launches break-even at Year 1, and just 55% by Year 3, meaning almost half of dermatology products still do not recoup launch investments even three years in. Dermatology is a crowded market (e.g., many brands for acne, psoriasis, etc.). Patient behavior often leads to inconsistent and often low adherence, and achieving standout performance can require prolonged investment and time to capture market share.

Other areas fall in between these extremes: for example, oncology drugs show relatively faster break-even on average (driven by high prices, a high per patient value, a focused number of prescribers, and targeted patient populations); whereas respiratory and some mental health products demonstrate slower break-even trajectories.

These distinctions highlight a crucial point: a uniform launch budget template applied across all disease areas is almost guaranteed to misfire. If launching a new immunology biologic, historical data suggests break-even could be reached relatively sooner with the right strategy. However, if the launch is for a dermatology or primary care product, a longer path to recover costs should be expected and investment should be paced with that timeline in mind. Launch planners who do not consider these nuances risk either under-investing in high-potential assets or over-investing in categories where structural headwinds make rapid payback unlikely.

Three distinct lenses on break-even

While promotional break-even is important and happens first, commercial and asset break-even should not be overlooked. Taken together, each captures a different slice of investment that should be monitored to guide different decisions during launch.

• Promotional break-even focuses on the recovery of sales and marketing expenditure associated with a brand. This includes field forces, samples, medical and commercial meetings, digital promotion, DTC activities, and launch specific initiatives. The goal is to determine whether the revenue generated by a product has at least matched the promotional capital deployed.
• Commercial break-even widens the scope to encompass promotional costs plus the cost of access and other gross-to-net deductions. Rebates, discounts, patient support programs, distribution fees, and chargebacks can easily absorb a substantial fraction of gross sales. Under this lens, the question becomes whether net revenue, after accounting for these concessions, has overtaken the combined burden of promotional and gross-to-net costs. For some products, the gap between promotional and commercial break-even is modest; for others, particularly in heavily rebated categories, it can span years.
• Asset break-even adopts the broadest and longest-term perspective as it occurs only after promotional and commercial break-even points. It considers whether a product has recovered the full investment required to bring it to market, including R&D expenditure as well as launch and ongoing commercial spend. Five years post-launch is often used as a reference point, but the true payback period can be longer or shorter depending on trial complexity, pricing, in-market investments, and lifecycle strategy.

The difficult road to asset break-even

Evaluating each type of break-even for diabetes, dermatology, immunology, oncology, and respiratory launches from previous years reveals the rising challenge of achieving full product break-even. Three years from launch, the average product in each of these therapeutic areas achieves promotional break-even, though dermatology brands barely cross the threshold, earning just $55 million in net profit.

For commercial break-even, once a 50% gross-to-net total cost of access is applied in addition to promotional costs, the number of products reaching break-even drastically tightens. While 50% is an assumption that does not hold true across all products, it shows the difficulty in achieving break-even when commercial costs are considered. The average immunology and diabetes brands performed the best three years post-launch, though neither is able to break $500 million in net profit. Respiratory and dermatology products, on average, fail to achieve break-even at this point.

Amidst rising compression, an effective strategy is key to achieving commercial break-even. Selecting a well-differentiated product and deploying operational expenses effectively are central to achieving success, especially for emerging biopharma companies which are often resource constrained. During launch, it is important to track year-over-year profitability, the cumulative break-even ratio, and the time required to reach break-even to understand the brand’s trajectory and adjust strategy as needed¹.

Going a step further and estimating asset break-even at five years from launch by assuming an additional $1 billion in R&D spend, which itself is a conservative number, reveals only immunology and diabetes products fully recouped the total investment in their development and commercialization. Oncology, despite being a leading growth driver for the industry, delivers an average net loss of approximately $750 million, while dermatology products average nearly a $1 billion net deficit once promotional spend, a 50% gross-to-net adjustment, and $1 billion in R&D costs are deducted from gross sales. The underlying causes are multifaceted and range from heightened payer control to intense competitive pressure that demands significant promotional investment. These forces, combined with rapid generic encroachment, constrain revenue potential to the point that many products struggle to recover their full costs. Even among those that break-even, the margins can be small. The difference from asset break-even for the average diabetes and immunology product is $325M and $500M, respectively.

Rising launch complexity and intensifying access costs have significantly changed the calculation on the profitability potential of molecules at various stages of development. Assumptions embedded in earlier net present value models may no longer hold. For near-launch assets, revisiting these projections is no longer optional; it has become central to responsible capital allocation. When a product is deemed financially viable for launch, forecasting should include both the revenue and the reasonable investment needed to achieve that revenue to avoid net negative spend five years down the line².

What distinguishes faster break-even launches?

Given the tougher climb to profitability, what separates those launches that do break-even in a timely manner from those that lag? Key drivers and inhibitors of break-even timing include:

• Productivity of spend, not simply volume of spend: Break-even improves when organizations focus on lowering acquisition costs and raising the productivity of every dollar spent. Next generation leaders will lean on robust data infrastructure and advanced analytics to pinpoint the provider segments, networks, and regions that deliver the greatest value per promotional touch, using behavioral segmentation and propensity models to keep outreach concentrated where it is most likely to convert. At the same time, treat spend quality as more important than spend volume, resisting the reflex to add tactics when performance is soft and instead measuring which activities drive new prescribers and patients. By tracking cost per new prescriber activated, cost per new patient acquired, and channel level returns with enough precision to retire low-yield efforts quickly, successful brands create scalable efficiency gains that materially shift the break-even curve.
• Share of voice that is targeted and credible: Being loud is not enough; the content and targeting of promotion must align with the clinical and economic realities of the product. Successful launches identify the segments of providers whose patients stand to benefit most and craft evidence and messages that address specific pain points such as ease of initiation, monitoring requirements, or payer hurdles. In many markets, scientifically grounded dialogue and peer validation matter more than sheer frequency of contact.
• Market access as a primary launch pillar: Access is no longer a downstream clean up exercise after launch. Payers expect robust health economic and outcomes data, disciplined pricing logic, and a credible story about total system value. Brands that break even sooner typically have access strategies that were designed in parallel with clinical development, not bolted on at the end. They prepare rigorous dossiers, anticipate objection scenarios, build support evidence, and structure affordability programs with explicit conversion paths so that early free use transitions to reimbursed therapy within defined timeframes.
• Deliberate sequencing of the promotional mix: The timing of investment can be as decisive as the amount deployed. A heavy DTC campaign launched before broad formulary coverage is in place creates public awareness without reliable patient access, leaving substantial demand unrealized and raising per-patient costs. Conversely, an overly cautious approach that delays meaningful promotion until long after approval risks ceding early adopters to competitors. High-performing teams stage activities in line with inflection points: scientific exchange and targeted field work first, then broader professional and patient-level campaigns once access and early clinical experience validate the product’s role.

Redefining launch excellence: from investment to sustainable profitability

In today’s constrained and scrutinized marketplace, launch excellence cannot be equated with a short-lived surge in prescription volume. The more meaningful measure is the speed and reliability with which an asset progresses from heavy investment to sustainable profitability, given the realities of its therapeutic area, competitive context, and rising gross-to-net squeeze.

In the coming generation of products, successful organizations that internalize these definitions design launches that are both financially and clinically robust. They treat break-even as a central strategic milestone rather than a back-office accounting concept. They sequence investment deliberately, tune their promotional mix based on real data, and embed access strategy at the core of launch planning.

For those companies, the three-year journey from approval to stable profitability becomes not just a hurdle but an opportunity to sharpen commercial capabilities, deepen relationships with stakeholders, and set a higher standard for how innovation reaches patients. In an era where capital is finite and scrutiny is intense, mastering that journey will distinguish the leaders of the next decade in biopharmaceuticals.

References:

1. Managing Emerging BioPharma OPEX in the New Investment Environment - Part 1 - IQVIA. Accessed December 11, 2025.
2. Managing Emerging BioPharma OPEX in the New Investment Environment - Part 2 - IQVIA. Accessed December 11, 2025.