Can Europe make the impossible, possible?
16.09.21
Last week, I had the opportunity to speak to colleagues in Denmark about the future of pharmaceutical research and development in Europe. Denmark is one of a number of EU Member States that has an ambitious life science strategy designed to attract investment, generate high-value jobs and make the country a destination for cutting-edge medical research. I heard researchers, industry leaders, policy makers explain the ingredients that the country is setting in place to continue to progress its advance in life sciences and as someone who has worked in the life science innovation sector for over 25 years, they made a lot of sense to me: stable, attractive, predictable frameworks with incentives.
Whatever the level of ambition, the success of Member State life sciences strategies are inextricably linked to the EU policy environment. Many of the primary drivers of medical innovation such as the regulatory framework, incentives for research and development and intellectual property are an EU competence. The implementation of the current EU Pharmaceutical and Industrial Strategies will colour the innovation potential for Member States and the success of their life science strategies. It’s therefore critical that in that implementation we develop European policy frameworks to support, rather than hinder Member State’s life science ambitions. When we hear suggestions about research incentives that are useful from the early days of drug discovery and development to attract investment being linked to unpredictable market access in 27 countries that may occur 15 years after a promising drug candidate is identified, it begs the question, how would investors react?
Driven by science, medical innovation is happening at pace, together we are making the impossible, possible for patients. There are over 8000 medicines in development, cutting edge science is translating into transformative treatments; in cancer, in rare disease, infectious diseases, in neurology and for a host of other conditions.
The issue is not if medical innovation will happen but where.
Europe already has some ground to make up if it wants to achieve the Commission President’s stated ambition of being a “world leader in medical innovation”. Today, 47% of global new treatments are of US origin compared to just 25% emanating from Europe (2014-2018)[1]. It represents a complete reversal of the situation just 25 years ago.
In parallel, Europe’s share of global R&D investment is falling. Over the past twenty years, the region’s research and development base has gradually eroded, with new leading-edge technology research units being transferred out of Europe, mainly to the United States over the past years and more recently to China. Between 1990 and 2017, R&D investment in Europe grew 4.5 times, while in the US it has multiplied by more than 8 times[2].
In parallel, Europe’s share of global R&D investment is falling. Over the past twenty years, the region’s research and development base has gradually eroded, with new leading-edge technology research units being transferred out of Europe, mainly to the United States over the past years and more recently to China. Between 1990 and 2017, R&D investment in Europe grew 4.5 times, while in the US it has multiplied by more than 8 times[2].
If medical innovation is happening anyway, does it matter if it is not in Europe?
Member States develop life science strategies to deliver economic growth, develop their research and development eco-system including supporting their SME and academic sectors as well as positively impact the health of their citizens.
Despite Europe’s relative decline in comparison to its competitors, the industry still invested an estimated € 37,754 million in R&D in Europe in 2019. The Pharmaceutical industry invests more of its revenue back in to R&D than any other research-based sector. It directly employs some 765,000 people in Europe and according to a report released by PwC in June 2019, supports around 2.7 million jobs in the EU. The same report highlighted that the activities of pharmaceutical companies contributed over € 100 billion directly to the EU economy, with an additional € 106 billion provided through the supply chain and employee spending[3]. It represents the highest contribution to the EU trade balance of any high-tech sector. The EU Pharmaceutical and Industrial strategies will shape the level and nature of life science investment over the next decade(s). The success of Member State life science strategies will depend on the EU ensuring that the Pharma and Industrial Strategies enable a pro-innovation policy framework that can compete on a global scale to attract global life science investors to conduct research, development and manufacture of the next generation of diagnostics, treatments and vaccines in Europe.
The innovation agenda goes beyond simple economics. There is a growing body of evidence that patient outcomes are better in centres of research and development. For diseases such as cancer, clinical research constitutes an important route for patients, for which current therapies are not a viable option, to get access to the latest innovation in cancer care via clinical trials. Between 2015 and 2020 63.7% of clinical trial were launched in the US compared to 17.4% in Europe.
Similarly, being a location for research and development affords the clinical community the chance to garner experience and expertise of using a new treatment through the development process and health systems the opportunity to generate data that can be used in clinical and cost-effectiveness assessments. Put simply, it means faster access to new treatment options for patients. If cutting-edge research continues to leave Europe in favour of other regions, so will the opportunity to deliver the very best care to patients across Europe.
So how can the Pharmaceutical and Industrial Strategies help Member States realise their life science ambitions as well as ensure faster, more equitable access to medicines across Europe?
The status quo is not an option. Reversing the 25 year trend of life science investment being relocated away from Europe means any new policy framework has to be equally, if not more competitive than other offerings around the world. That means a stable but dynamic regulatory processes that evolves with advances in science and technology. Europe’s IP framework has to be world leading, recognising that any attempt to reduce, devalue or narrow research and development incentives will accelerate the erosion of Europe’s research base and a collaborative approach to addressing issues of access, availability and affordability separate from the incentives framework. The current suggestions of connecting incentives for research and development with access in numerous Member States, that happens 15 years later, are extremely concerning in terms of offering that predictable and attractive framework that investors seek to justify the risky and hefty investments they need to make in our sector.
We believe that we are at an incredible moment in history, one where technology is showing the potential to revolutionise healthcare and where Europe has both and Industrial and a Pharma Strategy in the making. We must seize the opportunity of combining all these elements together with Member States’s life science ambitions to drive a revolution in Europe that puts us back at the forefront of delivering innovation in a sustainable way for and to today’s and tomorrow’s patients.
[1] Pharmaprojects & SCRIP, March 2019
[2] EFPIA member associations & PhRMA, yearly publications 1990-2019
[3] https://www.efpia.eu/media/412939/efpia-economic-societal-footprint-industry-final-report-250619.pdf
