Innovation Europe > News > Innovation EU Vol2-1 > Red biotech innovation in Europe

Ludovic Lacaine, Director of Healthcare Biotechnology at EuropaBio

Today, more than 350 million patients have benefited from approved medicines manufactured through healthcare biotechnology and gene technology to treat or prevent heart attacks, stroke, multiple sclerosis, cancer, diabetes and other diseases, including rare diseases. In addition, a further 650 new healthcare biotechnology medicines and vaccines are currently being tested for more than 100 diseases. By 2015, healthcare biotechnology knowledge, which is likely to be used in the development process for all new pharmaceuticals, will provide personalised, innovative, safe, and effective healthcare biotechnology products.

As healthcare biotechnology begins to play a larger role in the development of new medicinal products, recognising the innovative value of the sector – whether it be through a breakthrough, incremental or marginal innovation – and rewarding it, will be crucial. Indeed, the ability of the sector to continue delivering solutions to realise the potential of the healthcare biotechnology in order to improve quality of life, while supporting the budgetary efforts of national governments, depends upon it.

However, so far, designing EU policy to foster innovation in healthcare biotechnology has not been an easy task. There are several reasons for this including the high cost of innovation in this field, the long product development phases and the novelty of many of the products. This means that adequate legal frameworks first have to be put in place to ensure that emerging healthcare biotechnology solutions are supported and that they reach those that need and want them without delay.

Assessing the value of healthcare biotechnology

National healthcare systems are facing challenges that put them under unprecedented financial, economic and social strain. Investment in healthcare biotechnology innovation will be essential in securing the economic future of Europe, in part by helping to ensure an able population with a lower burden of disease. In addition, healthcare biotechnology will be key to maintaining a valuable, leading high-tech healthcare industry within European biotech that supports governments in the development of sustainable healthcare systems.

Many EU member states have already established health technology assessment (HTA) systems to systematically determine the relative “value for money” provided by new healthcare technologies and to support decision-makers in their coverage, pricing and reimbursement decisions. These HTA systems give providers and patients information with which to make treatment choices and have the positive effect of encouraging the efficient and effective use of health technologies by supporting innovation by identifying and rewarding high-value products.

However, HTA evaluations also potentially have a negative impact on patient access and on the rate of innovation by its misuse as a tool of cost-containment/rationing policies in healthcare. Awards for innovation should be appropriately and fairly granted based on holistic assessments of new and existing technologies. Such assessment should recognise key elements ,such as the value to society and the economy, ethical views of disease management and impact on productivity and quality of life. In addition, current EU efforts to provide a common methodological framework to HTA systems such as the Joint Action on HTA should be given due consideration and be further integrated into a wider EU innovation policy to ensure consistency of approach.

A need for policy coherence

Fundamentally, the EU’s innovation policies need to be supported by compatible policy decisions when research/innovation is finally brought to market. But, all too often, the results of innovation are thwarted by inappropriate and unnecessary regulatory road blocks.

In healthcare biotechnology, there is no real significance in defining the term innovation or in categorising the size of an innovation in terms of its size. Instead of asking whether the product represents an innovation, the real question is whether the new product offers any advantages compared to existing, available treatment options. A new product should be assessed on the value it adds for patients or to disease management, leading to improved cost-effectiveness in the treatment of a disease.

Another significant factor hampering healthcare biotechnology innovation in Europe is that the market for biotech medicines is highly fragmented. National demand for medicinal products is affected by the size of the country, per capita expenditure on pharmaceutical products and the public procurement regime. Strong commitments by governments to purchase innovative healthcare biotechnology can provide incentives for companies to continue and/or increase their innovation efforts. While recognising the competence of member states to manage their own healthcare system budget, the European Commission needs to further encourage the development and implementation of procurement practices that spur innovation on.

By being more demanding on the innovative nature of their healthcare purchases, national governments will not only get higher value for their investments, but will also indirectly foster innovation while greatly improving their patients’ outcomes through access to highly innovative therapeutic solutions.

Strong intellectual property protection

Basic research in industrial innovation and market implementation is both risky and expensive. Strong Intellectual Property Rights (IPR) is an essential guarantee to justify risk and future investments: no patent means no investment, which means no development, no product and no sales.

A strong and predictable intellectual property framework significantly enhances the chances that patients can benefit from healthcare biotechnology innovations. As such, the European institutions and member states should recognise and support a legal framework necessary to develop these (emerging) technologies, and under no circumstances should intellectual property rights be compromised.

As an example, in the EU, the development of new therapeutic indications for medicinal products requires the generation of a large amount of additional non-clinical and clinical data to support their development and approval. However, the current data exclusivity regime in the EU is insufficiently validated, and therefore does not take these substantial and growing efforts adequately into account.

In other countries, such as the US, each new indication requires significant newly developed clinical data for approval and therefore, it will require three to five years of data exclusivity for each approved indication.

In the EU, if data protection is granted, it is for no more than a non-cumulative period of one year of data exclusivity, despite the fact that important pre-clinical or clinical studies have to be carried out to make the use of the new indication approvable.

A fair reward system supporting healthcare biotechnology innovation would encourage more investments into research and development of new and existing medicines. Consequently, patients and society will greatly profit from such systems that would be conducive to the development of and earlier access to new and existing innovative medicines.

Supporting SMEs’ innovative efforts

In the EU, approximately 99% of all enterprises are SMEs employing around 75 million people and accounting for a significant amount of innovation in the healthcare biotechnology sector. However, although it is often said that SMEs are the lifeblood of innovation today, around 20% of Europe’s biotech companies – the overwhelming majority of which are SMEs – are at risk of disappearing because of their struggle and failure to find the investment they require to continue important R&D programmes. Healthcare biotechnology innovation involves high-cost and high-risk long-term investment. As a result, around 87% of biotech SMEs worldwide are in the pre-profit phase as a natural consequence of their business model. Many of these organisations are micro-enterprises consisting of 10 or fewer employees and the administrative burden of participation is therefore often beyond their capacity.

Therefore, it is vital to create a more attractive and less burdensome regulatory framework to support innovation, and SMEs innovation capacity in particular. Just as urgent is the need to attract more venture capital, working towards making the European Research Area a reality through SMEs, and for commitment of funding at an EU level.

The future in healthcare biotechnology innovation

In the quest to address unmet medical needs, the scientific community constantly seeks to innovate and apply new approaches. Researchers today are increasingly departing from the “old model” of “one disease – one medicine” and focusing on understanding the pathways and molecular mechanisms of a given disease. This shift to a new R&D paradigm which, by creating predictable outcomes based on diagnostic/therapeutic combinations – so-called personalised medicine, has profound policy implications that need to be explored, understood and addressed if promising innovations in healthcare biotechnology are to successfully make the transition from the lab to the market.

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