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Policy Passport on Pharmaceutical Innovation

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Policy Passport on Pharmaceutical Innovation PHARMACEUTICAL POLICY PASSPORT Understanding pharmaceutical innovation to improve access to new treatments INVENTING FOR LIFE MSD POLICY PASSPORT A KNOWLEDGE BASED ECONOMY 3 WHY A POLICY PASSPORT? This document is intended to provide policy makers with a “roadmap” of the drivers and At MSD, we believe that pharmaceutical critical policies that support pharmaceutical innovation is the result of a sophisticat- innovation. It is this web of government ed ecosystem that mixes investments in policies that provided the conditions for science, adequate healthcare spending, pharmaceutical companies to invest over and industrial policy focused on building €36.5 billion in research and development in a knowledge economy. the EU alone in 2018.11 The European Union and governments in I want to thank my team at the MSD Brussels Europe play a key role in the creation and Policy Centre for producing this Policy sustainability of this ecosystem. Supporting Passport, with special thanks to Boris Azaïs, investment in fundamental science, Director Public Policy and Bjelle Roberts, financing healthcare, and implementing Assistant Specialist Public Policy Vaccines. industrial policies focused on innovation (such as intellectual property rights) are critical to enable pharmaceutical compa- nies like MSD to deploy their research and development (R&D) efforts and develop David Earnshaw, innovative treatments for EU patients. Associate Vice-President MSD Brussels Policy Centre IN THE EU, WE HAVE THE SCIENCE, THE HEALTH SYSTEMS, AND THE PHARMACEUTICAL COMPANIES Today, MSD is at the forefront of research to advance the prevention and treatment TO CONQUER DISEASE AND of diseases that threaten people and communities around the world. PROVIDE BETTER HEALTH We will continue to lead the charge to cure diseases for which there are no cures or even good treatments, and diseases that are sure to emerge. Our quest won’t end until our inven- TO OUR CITIZENS tions move many more devastating diseases from homes and hospitals into history books. Dr. Susanne Fiedler, Senior Vice-President Europe & Canada 1 EFPIA, The Pharmaceutical Industry in Figures – Key Data 2019 click MSD to get back to table of content INVENTING FOR LIFE 4 A KNOWLEDGE BASED ECONOMY MSD POLICY PASSPORT MSD POLICY PASSPORT A KNOWLEDGE BASED ECONOMY 5 TABLE OF CONTENTS EUROPE IS THE ORIGINAL BIRTHPLACE FOREWORD PHARMACEUTICAL EXPENDITURES 32 OF PHARMACEUTICAL INNOVATION • A KNOWLEDGE-BASED ECONOMY CONNECTS • GROWTH OF DRUG SPENDING 33 SCIENCE, HEALTH, AND INDUSTRY 6 • SO HOW MUCH DO WE SPEND ON • EUROPE NEEDS MORE R&D 7 PHARMACEUTICALS IN THE EU? 34 • R&D IMPROVES HEALTH 8 • THE “PUBLIC” PRICE IS NOT WHAT • R&D PROMOTES ECONOMIC GROWTH 9 THE PUBLIC PAYS 35 Progress in science, industrial entrepre- BUT WHAT DRIVES • POLICY MAKERS ARE IN THE DRIVING SEAT 10 • INTERNATIONAL PRICE COMPARISON 36 neurship, and nascent public health thinking PHARMACEUTICAL INNOVATION? • PHARMACEUTICAL PRICE TRANSPARENCY paved the way for modern pharmaceutical innovation to start in Europe at the end of How do we make the link between fun- IN THE SPOTLIGHT 37 THE SOURCE OF INNOVATION 11 the 19th century. damental science and a pill that will help • REWARD VALUE TO THE PATIENT 38 • WHAT DRIVES PHARMACEUTICAL INNOVATION? 12 patients? • MEDICINES DON’T GROW ON TREES 13 Pharmaceutical innovation has been one of • FROM THEORY TO THERAPY 14 SPECIAL CHALLENGES 39 the driving forces behind the tremendous Policy makers can create the legislation • IT TAKES A VILLAGE... 15 • ANTIMICROBIAL RESISTANCE progress in life expectancy and better health that supports the long pathway between 1 • AGAINST GREAT ODDS WE CONTINUE TO INNOVATE 16 A GLOBAL THREAT TO HEALTH 40 we have experienced in the last 60 years. a scientific discovery published in a scien- tific journal and the prescription filled for • WE DON'T REST 17 • PATIENT ACCESS DELAYS 42 After clean water and sanitation, the de- a patient at a pharmacy. • THE CRITICAL ROLE OF INCENTIVES 18 • ORPHAN MEDICINES FOR MILLIONS velopment of novel health technologies by • FOR A RENEWED REGULATORY AGENDA 20 OF EU CITIZENS 43 pharmaceutical companies has been a key • HEALTH TECHNOLOGY ASSESSMENT 44 driver of healthier and longer lives. VALUE OF INNOVATION 21 • VACCINATION IS AN INVESTMENT 22 BEYOND INNOVATION 45 Just to cite a few - antibiotics, vaccines, car- diovascular medicines, diabetes medicines, • BENDING THE CURVE OF CANCER 23 • MSD FOR MOTHERS 46 antiretroviral against HIV/AIDS, hepatitis C • “INNOVATION” IS WHAT HELPS THE PATIENT 24 • NOBODY LEFT OUTSIDE 47 cures, and breakthrough cancer medicines • VALUE FOR MONEY 25 • HEALTH LITERACY 48 are among the new treatments that • INNOVATING IN ANIMAL HEALTH KEEPS • ABOUT MSD 49 have helped us achieve critical progress BOTH ANIMALS AND PEOPLE HEALTHY 26 • SUBJECT MATTER CONTACTS AT MSD 50 in healthcare. HEALTH COSTS 27 PHARMA IN A NUTSHELL 51 • WHY DO HEALTH COSTS INCREASE? 28 POLICY MAKERS PLAY • DISEASE IS THE REAL COST 29 • HEAVY FOCUS ON DRUG BUDGETS 30 A CRITICAL ROLE IN • PENNY WISE, EURO FOOLISH 31 CONTACT STRENGTHENING Brussels Policy Centre THE EU LEADERSHIP Rond-Point Schuman 6 1040 Brussels IN PHARMACEUTICAL For questions or comments on the Policy Passport, please contact Boris Azaïs at [email protected] INNOVATION You can find a full list of MSD representatives to contact at the end of this document. 1 Lichtenberg, Frank, “The Impact of New Drug Launches on Longevity: Evidence from Longitudinal, Disease-Level Data from 52 Countries, 1982–2001”. 2005. International Journal of Health Care Finance and Economics. © MSD 2019 click MSD to get back to table of content INVENTING FOR LIFE INVENTING FOR LIFE 6 A KNOWLEDGE BASED ECONOMY MSD POLICY PASSPORT MSD POLICY PASSPORT A KNOWLEDGE BASED ECONOMY 7 A KNOWLEDGE-BASED ECONOMY EUROPE NEEDS MORE R&D CONNECTS SCIENCE, HEALTH, AND INDUSTRY The research-based pharmaceutical indus- OUR MAIN MESSAGE, AND VISION, IS THAT try is one of the leading high-tech sectors in INVESTING IN RESEARCH AND INNOVATION Europe. Europe remains a global source of IS INCREASINGLY CRUCIAL FOR SHAPING ACADEMIC new medicines, but is losing pace to global A BETTER EUROPEAN FUTURE IN A RAPIDLY HIGHER LEADERSHIP competitors. As a knowledge-based econo- GLOBALISING WORLD, WHERE SUCCESS INVEST EDUCATION my, Europe has all the ingredients to regain DEPENDS EVER MORE ON THE PRODUCTION IN SCIENCE its global leadership, provided that we con- AND CONVERSION OF KNOWLEDGE INTO tinue to implement the appropriate policy INNOVATION. GLOBAL mix of strong science, investment in health- ADDRESS Pascal Lamy in “Investing in the European future we LEADERS IMPROVE care and a robust incentive framework. want”, Report of the independent High Level Group on UNMET POPULATION maximising the impact of EU Research & Innovation PATENT JOBS & NEEDS HEALTH Programmes, 2017. RIGHTS GROWTH MINISTRY OF RESEARCH ACCESS TO NEW TREATMENTS PHARMACEUTICAL R&D EXPENDITURE IN EUROPE AND USA MILLION OF NATIONAL CURRENCY UNITS MINISTRY EUROPE USA OF INDUSTRY PHARMACEUTICAL 60 000 INNOVATION MINISTRY OF HEALTH 50 000 40 000 30 000 20 000 NAVIGATING A COMPLEX 10 000 POLICY FRAMEWORK * “DG” stands for European Commission Directorate General 0 1990 2000 2010 2015 2016 2017 BETTER HEALTH FOR EUROPEAN CITIZENS Source: EFPIA, Pharmaceutical THROUGH PHARMACEUTICAL INNOVATION IS industry in figures, 2019. HOW CAN THE EU REGAIN THE RESULT OF THIS UNIQUE POLICY MIX ITS LEADERSHIP? click MSD to get back to table of content INVENTING FOR LIFE INVENTING FOR LIFE 8 A KNOWLEDGE BASED ECONOMY MSD POLICY PASSPORT MSD POLICY PASSPORT A KNOWLEDGE BASED ECONOMY 9 R&D IMPROVES HEALTH R&D PROMOTES ECONOMIC GROWTH Since 1950, more than 1,400 new drugs hospital wards), increasing work force 2.5 million jobs are supported by the phar- Research-based pharmaceutical companies have been approved.1 This wave of productivity and improving macroeconom- maceutical sector in Europe, contributing also contributed over €91 billion to the EU innovation has played a key role in the ics through greater investment in human €206 billion in Gross Valued Added in 2016.1 trade surplus and invested €36.5 billion in steady increase in life expectancy.2 capital. This amounts to an average Gross Value R&D in Europe alone in 2018.2 Added per employee of €156,000 which is Pharmaceutical innovation provides nu- In a study covering 2000–2009 across 30 significantly higher than other key sectors. THE TRADE SURPLUS IN PHARMACEUTICAL merous benefits to different healthcare OECD countries, innovative medicines are Overall, the activities of the pharmaceutical AND MEDICINAL PRODUCTS GREW FROM stakeholders. In addition to health gains, estimated to have contributed to 73% of companies directly contributed nearly €100 €22 BILLION IN 2002 TO A RECORD HIGH pharmaceutical innovation brings greater the 1.74 year improvement in population billion to EU economies in 2016, with an ad- OF €91 BILLION IN 2018. societal benefits such as releasing other weighted mean life expectancy at birth after ditional €106 billion provided through the EUROSTAT, International trade in medicinal and 3 1 healthcare resources (for example, antiret- accounting for other factors. supply chain and employee spending. pharmaceutical products. Data from May 2019. roviral therapy against HIV/AIDS freed up NOBEL PRIZE-WINNING ECONOMIST GARY BECKER CALLED LONGER LIFE ACHIEVED EU-28 TRADE BALANCE – HIGH TECHNOLOGY SECTORS THROUGH NEW MEDICAL INNOVATION ‘THE € Million – 2018 LAST CENTURY’S GREATEST GIFT’ Kumar, V. & Sundarraj, R., Global Innovation and Economic Value (2018). CONTRIBUTION OF INNOVATIVE MEDICINES TO INCREASE IN LIFE EXPECTANCY Pharmaceutical products (SITC 54) Power generating machinery and equipment (SITC 71) Office machines and computers (SITC 75) Telecommunication, sound, TV, video (SITC 76) Electrical machinery (SITC 77) Professional, scientific, controlling material (SITC 87) Source: Eurostat, COMEXT database, May 2019. “SITC” stands for Standard International Trade Classification. 1 Kinch M. et al., “An Overview of FDA-Approved New Molecular Entities (NMEs): 1827-2013”, Drug Discovery Today, 2014. 2 Lichtenberg F., “The Impact of New Drug Launches on Longevity: Evidence from Longitudinal, Disease-Level.
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