EU Conference on Pharmaceutical Innovation - Keynote Address Higgins
Dear Minister,
Ladies and Gentlemen,
On behalf of the research-based pharmaceutical industry in Europe, I would like to thank the Portuguese Presidency of the EU – and in particular the Minister of Health and Infarmed – for organising a high-level conference on such an important issue.
For over 100 years, Europe has been a powerhouse of pharmaceutical research and development. Innovative medicines developed in Europe have played a major role in helping millions of people lead longer, healthier and more productive lives and eradicating diseases which were previously life-threatening.
The research-based pharmaceutical industry is by far the biggest investor in health research worldwide and the main source of new, innovative life-saving drugs in all disease areas. Quite simply, without a thriving pharmaceutical industry there would be no new medicines.
The European pharmaceutical industry is key to helping Europe achieve the Lisbon objective of becoming the most competitive knowledge-based society in the world. In 2006 alone, it invested more than €22 billion in R&D, corresponding to 18% of all industrial research and development in Europe; and employed about 640,000 people, more than 100,000 of whom in R&D.
These are impressive facts and ones that the industry is rightly proud of. But forgive me if I ask: who cares?
Clearly, our message doesn’t sell well, because the reality is that Europe is losing ground, with the pharmaceutical sector's centre of gravity shifting from Europe to the US and emerging markets such as India and China.
EU Member States in general do not seem willing to support and reward pharmaceutical innovation. All too often, innovation is perceived as a threat to healthcare systems rather than an investment or a driver of economic growth, which I believe in the end is an extraordinarily short-sighted view.
Patients in Europe face increasing delays in access to new, innovative medicines, as regulatory procedures become longer and more complicated and the balance shifts more towards risk-avoidance than clinical benefit.
In addition, soaring R&D costs - combined with a downward pressure on prices - are making it harder for many pharmaceutical companies to recoup their R&D expenditure before patents expire.
In Europe we are very proud of free trade. At the same time, we fail to acknowledge that the pharmaceutical industry in Europe is not operating in a free market. Our prices and the reimbursement of our products are controlled by governments.
Against this background, it is astonishing that Europe allows parallel trade under the guise of free trade. Parallel trade offers little benefits for social security systems but great profits for the traders, while at the same time it increases the risk of counterfeits, as the re-boxing of our products destroy our ability to track and trace.
These are just some of the challenges the European pharmaceutical industry is facing. Taken together, these trends are alarming. If we continue along this path, the pharmaceutical industry in Europe will be irreversibly damaged. And those of us living 20 years from now will ask: how could this have happened? This should be a wake-up call for all stakeholders - and our political leaders in particular - for what is at stake is the health and wealth of Europe.
To reverse these trends I believe we have to focus on two priorities:
- one is rebuilding the reputation of our industry and addressing the fact that we have lost the trust of our stakeholders.
- The second is that we need the right framework conditions in Europe to support pharmaceutical innovation.
On the aspect of trust, we the industry have to acknowledge that our image in Europe and globally has deteriorated over the years. As an industry, we have to accept that much of this has been self-inflicted.
As the president of EFPIA, I can assure you that we are committed to rebuilding trust and addressing the concerns of our stakeholders. In recent years, for example, we have adopted stringent codes of conduct for marketing practices and interaction with patient organisations, improved the transparency of clinical trial data, invested significantly in the R&D of new life-saving medicines, including for neglected diseases, and partnered with key stakeholders to improve access to medicines in the developing world. And we are committed to doing more and ask you for your honest feedback on our progress so that we can continue rebuild your trust and establish a constructive relationship.
But to build a constructive relationship is a two-way process. Framework conditions in Europe need to improve, in order for our industry to remain competitive.
Firstly, we need a better patient access to new discoveries. The pharmaceutical industry is probably the most highly-regulated sector. Our medicines have to meet the highest standards. However, we must continue to work with regulatory authorities to remove unnecessary complexity that is leading to increasing R&D costs and delays in bringing new products to the market. The right balance should be found between ensuring the highest product safety on the one hand and swift patient access to life-saving medicines on the other. When we talk about access, we must also be careful that Health Technology Assessment is not misused by governments as a means of restricting access. The industry supports HTA but it should be a way to bring promising new drugs to the front of the line, not keep them waiting in the back.
Secondly, we need a fair reward for innovation - including incremental innovation. To those who question the benefit of so-called “me-too drugs”, let me remind you that pharmaceutical innovation often arises from a series of incremental steps, rather than a quantum leap. Spectacular breakthroughs in pharmaceutical innovation are the results of all the knowledge gained from those incremental steps.
Thirdly, we need strong intellectual property rights. Without patent protection, there would be no incentive for companies to invest in the very costly and risky process of developing new medicines. Let us not forget that of every 10,000 molecules tested, perhaps only 1 will be approved by the regulatory authorities and make it to the market. Even then, only 3 out of 10 drugs on the market generate revenues that exceed average R&D costs.
Fourthly, Europe needs to find the right balance between rewarding innovation, ensuring patient access to medicines and managing the costs of healthcare systems.
Governments face difficult choices and priorities. But the current school of thought, sadly, is to look for short-term, quick-fix solutions: damaging cost-containment policies like Jumbo Groups that choke innovation and forever-changing healthcare reforms, resulting in a lack of predictability for companies’ medium- and long-term operational plans.
While we understand the challenge faced by our governments to control rising healthcare costs, we very much hope that the debate will move away from the cost of pharmaceuticals to patients’ benefits and the value of medicines.
Ladies and gentlemen,
People who know me also know that I am an optimist by nature. While I have painted a gloomy picture of the current situation of our industry in Europe as I think it is important that we understand the great challenges we face together, I would like to conclude on a more optimistic note.
Today, I am delighted to draw your attention to a new initiative that could help Europe regain its position at the forefront of innovative medical research.
The Innovative Medicines Initiative - which will be launched by the end of this year - is a unique public-private partnership designed jointly by the European Commission and the European pharmaceutical industry association with the aim of boosting biomedical research in Europe.
It will fund research projects addressing key bottlenecks in the discovery and development of new drugs, such as predicting drug safety and efficacy and bridging gaps in education and training. The initiative will receive €2 billion in funding over a period of six years, to be split between the EU and the industry.
With the IMI we have a unique opportunity to create critical mass for European research and innovation, so that better and safer medicines can be made available more quickly to patients. The IMI can prove that by joining forces, pulling together in the same direction, we can really make a difference.
Ladies and gentlemen,
The clock is ticking. The goal set by the EU Lisbon Council was to make Europe the most competitive and dynamic knowledge-based economy in the world by 2010. We must not give up on this goal. Even if it takes 5 or 10 years longer.
Our industry is uniquely positioned to contribute to this ambitious agenda but we need the right conditions that will help us stay in the innovation race.
We want Europe to regain its leadership in pharmaceutical innovation, for the health and wealth of Europe’s 500 million citizens and for the sake of human well-being on our planet.
THANK YOU
