The biopharmaceutical industry is surging. But believing that the surge is permanent, or inevitable, would be a mistake. Like other industries, we are buffeted by international policy developments and geopolitical events. Although Ireland’s economy is strong now, the global outlook is uncertain, especially with inflation, war in Europe and the ongoing impact of Covid-19.
The industry’s local footprint is significant, with 45,000 direct jobs and corporation and payroll taxes helping the Government to respond to cost-of-living challenges and, before that, the pandemic. But product life cycles, industry consolidation patterns, the draw of emerging markets, skills readiness and sub-optimal speeds of adoption of new medicines in the health services are creating headwinds that could decelerate the pace at which the industry scales into the future.
The way to help avert future shocks is structured dialogue between policymakers, in Dublin and Brussels, and our industry. Together, we should identify how to yield growth opportunities for the country, as well as de-risking an environment that could make a loss of competitiveness or a diminution in standards of care entirely possible.
A new study by consultants Charles River Associates for EFPIA, the industry’s representative organisation in Europe, urges steps to boost competitiveness so that Europe is less likely to lose out to the US and Asia for new investments in biopharmaceutical research and in production. The study, called ‘Factors Affecting the Location of Biopharmaceutical Investments and Implications for European Policy Priorities’, illustrates our industry’s declining competitiveness in Europe, with the global share of research and development investments, clinical trials and manufacturing output all waning. The study finds that a key driver of most new investments is the location and performance of existing research and development or manufacturing footprint.
That much is positive for Ireland. Recent investments in production sites across the country are based, in part, on an already-established performance culture built over decades. This performance has been backed by sensible and stable Government policy, with IDA Ireland leading the effort to attract foreign direct investment.
But the study reveals trends all of us should heed. In 2002, the US spent $2 billion more than Europe on research and development. Today, that figure is $20 billion – a rise of 1000%. Of the total research and development investments made in the US, Europe, China and Japan, only 31% occurs in Europe. This has declined steadily from 41% in 2001. China has grown its share from 1% to 8%.
Clinical trial activity for advanced therapeutic medicinal products (ATMPs), which include cell and gene therapies, is twice as high in the US and almost three times as high in China than in Europe. Cell and gene therapies are usually one-time treatments that can add months, sometimes years, to a patient’s life, replacing a lifetime of treatment. In cancer, haemophilia, SMA Type 1 and ocular diseases, cell and gene therapies can be game-changers. The number of trials for these treatments conducted in the US and Asia-Pacific region grew by 70% and 67%, respectively, between 2014 and 2021 while Europe remained stagnant. Europe accounted for a 19.3% share of global clinical trials activity in 2020, a drop of 6.3%, compared with a 25.6% average over the past 10 years.
ATMPs are the therapies of the future, with 804 next-generation biotherapeutics, including cell and gene therapies and mRNA technology, in a global pipeline of over 8,000 new medicines. The US has half the world’s ATMP manufacturing facilities. Asia is fast becoming the most competitive region for attracting ATMP clinical trials (255 in 2021), with Europe in decline (89 in 2021). For Europe to compete more effectively, it must recognise the complexity of these new technologies and build the interconnected ecosystem needed to develop them. We have argued for Ireland to aspire to be a centre for ATMP supply chain and production, and to adopt a national policy for adopting ATMPs affordably and fast in the health system. The EU should take a more proactive role in fostering the growth of emerging ATMP clusters, providing support across the ecosystem of research and development, manufacturing and clinical trials. The old approach of siloed policymaking focused on innovation, manufacturing and healthcare sustainability does not work.
The study finds that global research and development is expected to grow at a rate of 4.2% annually to $233 billion in 2026. The problem is that it is moving out of the EU. While world-leading hubs like Boston, San Francisco and the UK’s ‘Golden Triangle’ get significant policy focus and strategic funding, European research funding is more uniform across countries. The countries with the highest EU research spend per population are not the centres of innovation. This is a weak strategy. The European Commission should consider more strategic allocation of resources to foster the growth of world-leading research centres.
The European Commission is reviewing the operating environment for medicines innovation as part of the EU Pharmaceutical Strategy. A legislative proposal is due to be published early next year. Our Government, and our MEPs, should adopt a position that backs innovation and supportive intellectual property rights. That means making Europe more competitive for jobs and investments in biopharmaceuticals, accelerating patients’ access to affordable medicines, investing in research for unmet medical needs and making regulatory pathways more agile and efficient. It does not mean curtailing intellectual property rights or linking them to medicines access.
Covid-19 has shown the value of partnership. It should not take a crisis for us to work together. Closer collaboration between industry and policy leaders, especially when healthcare outcomes and investments are at stake, makes sense. We should build a permanent bridge, through regular strategic dialogue, that cements the interdependency between citizens, policymakers and industry. It’s time to put the days of distance behind us.
Bernard Mallee is Director of Communications and Advocacy at the Irish Pharmaceutical Healthcare Association.