How new thinking on industrial policy can help make a #HealthyEU
25.02.14
Picking winners, then, went out of vogue. Industrial policy gave way to trade liberalisation and a focus on ‘horizontal measures’. These were not sector specific, but rather cross cutting issues that would provide an economic foundation on which all manner of industry could thrive: funding basic science; education; access to finance; skills; framework conditions such as a competition and IP regime, and so on.
There is no doubt the shift to horizontal measures, away from propping up ailing companies, was a good thing. But there is now increasing recognition that Europe needs to do more. How can we avoid the past mistakes of picking losers, make sure that our horizontal foundation such as good science, is genuinely world-class, but also make sure that sector specific investment conditions are appropriately optimised for modern industry?
At EFPIA, we believe there is scope for a new type of industrial policy – one that is, not about subsidy, but is built on a collective effort to solve some of the most pressing policy challenges that face our society. We believe that policymakers should work with industry to understand how our science and business models are changing. By seeking out policy win-wins, it is possible to both address societal challenges, whilst at the same time creating the conditions for new investment.
Between now and 2050 the number of 65s in Europe will increase by 75%. This will place an enormous burden on Europe’s welfare systems, including pensions and healthcare. With an ageing population, an increase in the prevalence of chronic disease will mean more emphasis than ever will be placed on the efficient management of public resources. Technology, such as medicines, has an important part to play. To be financially sustainable, health systems have to find effective ways of ensuring that only the most effective technologies are used and that ‘disinvestment’ of out of date technology takes place quickly.
At the same time from a business point of view – particularly for a business for which ‘government’ is usually the only, or at least most important, customer – it is critical to have predictability and stability in the marketplace. Valuable new products need to be adopted and diffused throughout the system quickly. As a responsible industry we stand read to work with all European governments to establish a sustainable framework for ensuring patients get access to the right medicines.
Finally, it is important that European institutions work with us to look to the future. We are a long-term industry placing long-term bets for a global market place. It is crucial for Europe to retain its position as source of excellent science by ensuring that publicly funded research is carried out in a strategic and efficient way and that intellectual property incentives are fit for purpose for the new science of tomorrow.
A new industrial policy for Europe, then, is not about picking winners (or losers). But it is about making sure the specificities of Europe’s most productive and high potential sectors are well understood. There is a unique opportunity in the pharmaceutical and life science industries more generally to harness the undoubted scientific and industrial strength of the region to both solve health problems and support Europe’s future growth and prosperity.
