Can Europe Compete in Biomedical Research

1
Can Europe Compete in Biomedical Research?

• Sir Tom McKillop
• Academy of Medical Sciences
• 31 March 2004

2
The real questions

• Is Europe losing its leadership in biomedical
  research?
• If so, why?
• Does it matter?
• Is it too late to regain our strong former
  position?
• Will Europe fight to rebuild the competitiveness
  of its research base?
• If so, what needs to be done?

3
Importance of Biomedical Research

• IMPROVING HEALTH
• Better understanding of disease
• Better treatment options
• Improved quality and quantity of life
• WEALTH CREATION
• Health status correlates with economic
  performance
• Pharmaceutical and other health related
  industries are major contributors to the European
  economy

4
EU Trade balance - High Technology sectors
(million) - 2002
Source Eurostat, SITC54
5
The European pharma industry

• 5th largest industrial sector(3.5 of the total
  manufacturing production in Europe)
• 582,500 highly qualified jobs (91,500 of them in
  RD)
• 19.8 billion invested in RD (almost 20 of all
  industrial RD in Europe and a higher percentage
  than any other industrial sector)
• Trade surplus of 40 billion Europe still a net
  exporter of medicines - Pharmaceuticals make the
  highest contribution among high-tech industries
  to Europes trade balance

Source EFPIA personal communication (2002 data)
6
Biomedical Research 2004
We stand on the threshold of a Biomedical
revolution based on application of the human
genome data and advances in a whole array of
technologies BUT, there is still much to do.
7
Disease Issues Cancer

• Increasing incidence
• Mostly palliative treatments
• Need to improve understanding of disease
  processes

8
Disease IssuesCardiovascular/Renal Disease

• Need for effective treatment for heart failure -
• More than 8 million patients with this illness
• No treatments to prevent kidney failure
• Improved treatments for atherosclerosis still
  needed -
• Over 300 million patients
• New treatments for thrombotic disorders

9
Disease Issues Obesity and Diabetes

• Epidemic of obesity but no good simple therapies
• - 60 of people in the UK are overweight
• - 20 of Americans and Germans are clinically
  obese
• - 35 of children in Sicily are clinically obese
• Increasing incidence of diabetes - disease leads
  to premature death.
• Very significant disease problems with major
  impact on healthcare costs
• Both areas require improved understanding of
  normal physiology and pathology

10
Disease Issues Neuroscience

• Mental health is a major problem
• - Third largest in WHO List 6 million patients
  with schizophrenia
• No effective disease-modifying therapies for
  dementias
• - Increasing incidence as population ages
• Limited effectiveness of treatments for
  depression and anxiety
• - Major unmet need
• No good non-addictive treatments for severe pain

11
Disease IssuesGastrointestinal Diseases

• Little real understanding of irritable bowel
  syndrome
• - Affects 20 of population in Europe and USA
• Limited treatments for inflammatory bowel disease
• - More than 1 million patients

12
Disease Issues Respiratory Disease

• Limited treatments for severe asthma and none is
  disease-modifying
• Increasing incidence of Asthma (40 million
  patients) and allergic airways disease (90
  million patients).
• Limited understanding of COPD and few treatments
  available
• Major cause of death and morbidity in smokers
• 40 million patients

13
Disease Issues Infection

• Treatment of increasing multi-drug resistance
• Spectre of dominating multi-drug resistance
  killing large numbers of people
• Treatment of TB
• No new drugs in over 40 years
• New treatments needed for malaria and other
  tropical diseases
• Global spread of AIDS

14
Innovation in Europe the picture today
?US spend on research as of GDP(2.4 risen to
2.8 in 20 years) ?EU spend on research as of
GDP (fallen to 1.9 from 2.4 in 20 years) The
Lisbon target for Europe?3 GDP spent on
research by 2010
Source EFPIA personal communication
15
Investment
US NIH Alone 27,000 million p.a. EU Framework
VI Euros 4,5000 million
over 5 years MRC 394 p.a. BBSRC 249
p.a Wellcome Trust 432 p.a.
16
Health RD in government budget (GBAORD)(1) as a
percentage of GDP, 2002
Sources OECD Science, Technology and Industry
Scoreboard 2003 - PICTF 2003 Indicator 9 From
OECD, RD and ANBERD databases Eurostat and
national publications June 2003.
17
Percentage of World Pharmaceutical RD Spend
60
US
Japan
UK
Germany
France
Switzerland
50
Others
40
30
20
10
0
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Source Data from national trade associations -
PICTF 2003 Indicator 35
18
Location of RD spending by EU pharma companies
(1990-1999)
Source EFPIA, Data from National Trade
Associations - 2000
19
New Molecular Entities 1988-2002
Source SCRIP Publications - EFPIA calculations
(according to nationality of mother company)
20
European research success is declining

• 8 out of the top 10 NCEs in 1980 were discovered
  in Europe
• 8 out of the top 10 NCEs today were discovered
  in the USA

21
Why are we losing ground?

• Underinvestment
• No reward for innovation
• Europe is not functioning
• Huge market distortions

22
Pharmaceutical sales as a percentage of GDP for
selected countries
US
Fr
1998
E
1999
J
2000
It
2001
Can
2002
D
S
Aus
UK
CH
NL
0.00
0.50
1.00
1.50
2.00
Sources ABPI calculations using IMS World Review
2003 market data and OECD data for GDP PICTF
2003 Indicator 18
23
Percentage (by value) of national pharmaceuticals
market accounted for by products launched within
the last 5 years (1998-2002)
J
UK
It
Fr
D
CH
Can
Aus
E
US
Source IMS World Review 2003 PICTF 2003
Indicator 19
24
UK uptake of 41 medicines launched in the UK
since 1997 compared to average for other PICTF
countries
250
200
150
UK uptake per head standard units
/country average uptake per head
100
50
0
YR1
YR2
YR3
YR4
YR5
Years from launch
Source PICTF 2003 Indicator 16
25
Delays From Pricing/ReimbursementApplication To
Reimbursement
Source EFPIA data
26
Breakdown of the world pharmaceutical market
(1990 2002)
2002
1990
Total pharmaceutical market value 1990 135,900
million Euros 173,000 million Dollars
Total pharmaceutical market value 2002 423,467
million Euros 400,600 million Dollars
Source IMS World Review 2003 IMS Consulting
27
Innovation Market penetration
Geographical breakdown (by main markets) of sales
of new medicines launched during the period 1998
- 2002
18 Europe
4 Japan
8 ROW
70 USA
Source IMS World Review, 2003
28
Europe is not functioning

• Fundamental dichotomy of responsibility in health
• No integrated strategy or priorities
• Underinvestment in education and training
• Regulations and laws
• EU clinical trial directive
• Chemicals directive
• Freedom of information
• Failure in dealing with animal activists
• Little facilitation of academic/industrial
  collaboration

29
Market distortions

• Innumerable controls on both supply and demand
• Parallel trade
• Enlargement

30
Import penetration 2001-2002
5 of the total European market
of drug sales
31
16
14
12
10
60
8
6
4
2
0
Total PI sales 2001
2000m
400m
100m
220m
50m
1300m
30m
Norway
Ireland
Sweden
Germany 2002
UK 2002
Netherlands
Denmark
5 year CAGR
3 year CAGR
Source IMS World Review, MIDAS and others
31
Opportunity provided by G10

• G10 Group formed to balance industry and
  healthcare policy interests in addressing the
  loss of competitiveness of the European-based
  pharmaceutical industry.
• The Group consists of Health and Industry
  Ministers from 5 Member States, representatives
  from different sectors of the industry, mutual
  health funds and a specialist in patient issues.
• A stronger competitive EU biomedical research
  base and innovative pharmaceutical industry will
  contribute to health (and wealth) for the EU
  citizens
• Lisbon agenda addressing competitiveness of
  pharmaceuticals can make a major contribution

32
G10 - Deliverables

• Balance between health and industrial policy
• Improve Access and Availability of medicines
  throughout Europe with more effective regulatory
  processes
• Stimulate innovation and strengthen the EU
  science base through Virtual Institutes of
  Health and incentives for research.
• Secure the development of a competitive market
  without inequitable distortions.
• Provide patients with good quality, objective
  information regarding their healthcare.

33
Conclusions

• The research-based pharmaceutical industry in
  Europe can make a major contribution towards
  acheiving the Lisbon and Barcelona agenda
• At stake
• The future of Europe as a site for life science
  research and for pharmaceutical RD activity
• Through practical recommendations of G10 we have
  an opportunity improve need action

34
Some positives

• Lisbon agenda
• EU recommendations including G10
• Improved funding of health and education
• Pharmaceutical Industry Competitiveness Task
  Force
• Government commitment to long term science plan
  (post Roberts, Lambert, Innovation etc Reports)
• Academy of Medical Sciences Forum, Bell Report

35
Remaining Questions

• Are these initiatives enough?
• Will action follow the words?
• Can we achieve effective cooperation across
  Europe and among academia, Health Services and
  industry?

Note The issue is not whether there is a future
for biomedical research or the pharmaceutical
industry. The issue is whether Europe wants to
be a part of its future.