A new debate is needed for biopharmaceuticals

DISCLAIMER: All opinions in this column reflect the views of the author(s), not of EURACTIV.COM Ltd.

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The increasing complexity and uncertainty of drug development is hampering the industry’s ability to discover new, life-changing innovative medicines, writes Stefan Gijssels.

Stefan Gijssels is Vice President for Communication & Public Affairs at Janssen, a Belgian pharmaceutical company, which is part of the Johnson & Johnson group.

The recent bumpy landing of Philae on comet 67P/Churyumov-Gerasimenko after a ten year journey, and more than 1.4 billion euros in investment, is a fantastic example of European science, expertise and collaboration at work.

Yet, as Europeans, we need not travel to distant realms of the galaxy to find examples of cutting edge innovation that help us lead better lives.

Be it food, cars, technology or medicine, companies bring together their best expertise, take risks to innovate and bring new added value to consumers and society. All around us, innovative European companies are taking “giant leaps” of their own into the unknown, in the hope of discovering new ways to improve our lives.

With the mid-term review of Europe’s 2020 strategy almost complete, it is timely to recall the role of the “Innovation Union” as a stimulus for EU productivity, competitiveness and jobs over the coming five years. Innovation requires investment, and those Member States that have continued to invest in research and innovation have fared better in the current crisis than those that have not [1]. Yet for innovative industries to thrive, governments and industry need to start thinking about policies that better recognise the significant and growing risks inherent to certain industry sectors.

In a bid to highlight the important yet highly delicate nature of Europe’s innovative industries, a new report, produced by the Deloitte Health Economics Group, has sought to evaluate the comparable risks incurred across five major industries. It reveals that, compared to other innovative sectors such as automotive, commercial aircraft, and consumer electronics, the biopharmaceutical sector deserves specific attention because of its significant investments in R&D, lengthier product development cycles, and due to the complex regulatory hurdles that create barriers to patient access.

In short, while the business risks incurred by the biopharmaceutical industry may not be as extreme as the risks of the Philae mission, they certainly stand out when compared with other industry sectors.

Five fast facts on biopharmaceutical innovation:

  1. Biopharmaceuticals are among those industries spending the most on R&D per new product – this is even without taking into account the additional costs of those products that do not ever reach the market;
  2. The sector spends by far the highest proportion of its revenue on R&D – biopharmaceuticals are almost three times more R&D intensive than other sectors such as consumer electronics;
  3. Product development phases are significantly longer – it takes twice as long to develop a new biopharmaceutical product than it does to develop a commercial aircraft;
  4. Biopharmaceuticals are subject to particularly fragmented and complex regulation – the specificity of the sector means that approval and access processes are often cumbersome, barriers exist at regional, national and local levels;
  5. Intellectual property protection is more valuable but less effective – patent protection periods are shorter for biopharmaceuticals owing to the long R&D developments phases required prior to launch.

Yet, today, the increasing complexity and uncertainty of drug development is hampering the industry’s ability to discover new, life-changing innovative medicines. This is contributing to an increasing imbalance between risk and reward for incremental innovation in the sector.

At this important halfway juncture for Europe 2020 and for the Innovation Union, a new debate is needed for biopharmaceuticals: one that recognises real health needs and prioritises areas for innovation, one that identifies affordability for payers and for patients, and one that is aware of the need for risk mitigation and risk sharing. With the Commission expected to make further proposals for Europe 2020 in early 2015, it will be crucial to recall these points.

If we are to continue benefitting from the high economic and societal value derived from innovative pharmaceuticals, it is time for Europe to acknowledge and act on the unsustainable levels of risk confronting the sector, and to ensure appropriate rewards for innovation.

By recognising the giant leaps of value which the biopharmaceutical industry brings to society, we will be one small step closer to securing a sustainable future for European healthcare.

  • [1] 2013 European Council conclusions as cited in http://ec.europa.eu/research/innovation-union/pdf/competitiveness_report_2013.pdf

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