In the pharmaceutical industry, it has long been standard practice for every major country to have its own independent cross-functional organization, complete with a dedicated management team. However, some companies are experimenting with merging their country organizations within larger regional hubs. What drives this regional convergence? What are its benefits and potential drawbacks?
Business is no stranger to so-called eternal truths—beliefs that feel unshakable until, one day, they’re not. For decades, the office was seen as the irreplaceable hub of human work, for example. Then came remote work, proving that productivity isn’t tethered to physical cubicles. Or consider the once-unquestioned notion that customers prefer owning products outright. Streaming services like Spotify and Netflix shattered that myth, making access more appealing than ownership.
Pharmaceutical companies are not immune to such paradigm shifts. One of their long-standing certainties is the belief that every sizable country requires its own cross-functional organization and leadership team. But cracks are now beginning to appear in this ironclad principle. While smaller nations—think the Benelux region or the Nordic countries—have long operated as combined units, some firms are now testing whether this model can work for larger markets as well. Why are companies drawn to regional convergence? And what are the trade-offs?
The Drivers of Regional Convergence
Regional convergence is a response to both external pressures and internal ambitions. Externally, changes in European legislation have played a significant role. For example, since January 2025, the European Union has been introducing benefit assessments for new drugs at the European level. The regulation on European Health Technology Assessment (EU HTA) requires pharmaceutical companies to ramp up their presence in the EU. Some have already created European management tiers, which are likely to siphon tasks and resources from national teams. Marketing strategies, for instance, might one day be coordinated from these regional hubs rather than individual countries.
Another external driver is advances in precision oncology. A deeper understanding of cancer genetics and targets is enabling the development of highly specialized therapies for increasingly smaller patient subgroups. As a result, niche markets and distinct business models are emerging—often too small to justify a standalone country organization.
Internally, the lure of cost savings cannot be ignored. Why maintain multiple national management teams when one regional unit could do the job? Merging countries into larger units also promises synergies: simpler reporting structures and a more seamless implementation of global strategies. In theory, managing fewer regional units instead of numerous country organizations should streamline operations and enhance performance. But can this streamlining really cut costs and improve effectiveness at the same time? Is it possible to kill two birds with one stone—or do you risk missing the birds and breaking a window instead?
Complexity Doesn’t Disappear; It Relocates
One of the perennial concerns about centralization at the regional level is the loss of local focus—and this risk looms large in the pharmaceutical sector. Even as the EU HTA pushes for more standardization, national markets remain deeply fragmented. Each country has unique rules for benefit assessments, price negotiations, and medical infrastructures. Some nations rely on sprawling networks of office-based physicians, while others focus on centralized medical hubs. A one-size-fits-all strategy may gloss over these nuances, resulting in missed opportunities or strategic missteps. Even worse, new and better treatment options might not reach patients.
In the country-based model, teams operate in silos, focused on their own markets. Regional convergence breaks down these walls, making cross-national teams the new standard. But within these teams, two problematic dynamics might emerge. On the one hand, there’s a tendency to over-communicate. Team members spend excessive time explaining their countries’ unique needs and market specifics to one another. While this can generate valuable insights, it can also become a drain on resources. On the other hand, too little communication is a risk. Since only a few areas truly require cross-border collaboration, country-specific medical and sales representatives may end up working in isolation, each focused solely on their own responsibilities. In other words, convergence on a regional scale may lead to atomization on a local level.
But things get even more complex. In practice, companies often blend regional and national functions under one roof. This forces managers to make tough decisions: Which resources should be centralized at the regional hub? Which should stay within national control? Naturally, the answer depends on the specifics of each country. A regional hub might include two countries with similarly structured markets—while a third stands out as an exception, requiring a dedicated national function in a particular area. Over time, these hubs can develop intricate substructures that bear little resemblance to traditional country organizations. With their tangled reporting lines, overlapping responsibilities, and complicated budget allocation processes, they become increasingly difficult to integrate into the global framework.
Here’s an unshakable truth of organizational design: complexity never disappears; it merely shifts. In this sense, regional convergence creates synergies but also new frictions, provides answers but also raises a whole new set of questions. Who gets the resources? Whose interests shape brand planning? Which market-specific needs take priority in strategy development? Managers of cross-national teams must act as translators—not just linguistically and culturally, but also politically and strategically. They must navigate competing interests, ensure that smaller or less vocal markets aren’t overshadowed by louder ones, and draw critical distinctions: Which decisions should be made collectively across countries, and which should remain local? What does a regional manager truly need to know—and what can be safely ignored? What constitutes a shared objective, and what is just empty rhetoric?
A Risky Road Ahead
Regional convergence also disrupts established stakeholder dynamics. Field Medical teams cultivate close relationships with key opinion leaders (KOLs) in their markets—relationships that rely, in part, on the perception that pharma representatives have the influence to advocate for their contacts’ medical and scientific interests, whether by securing participation in clinical trials or providing data analyses for specific patient subgroups. But under a regional structure, this perception may weaken. Will KOLs still see their local counterparts as influential partners, or will they view them as detached intermediaries with limited sway? Convincing external stakeholders of the value of regional convergence will require not only clear, compelling narratives but also tangible proof of its benefits.
But of course, these narratives are just as crucial for internal persuasion. Regional convergence is a complex undertaking—one that inevitably sparks concerns and resistance. Where does it truly make sense? Where might it create more problems than it solves? Yet these very challenges make regional convergence a worthwhile endeavor. These new organizational structures can even serve as hubs for innovation, helping other parts of the company confront an eternal truth: giving up old certainties is never easy!
