Today's guest blog comes from Dave Ricks, Senior Vice President and President of Lilly Bio-Medicines, ahead of his participation in the German Marshall Fund's Brussels Forum on 21-23 March.
This week I am in the heart of Europe, Brussels, to attend a series of meetings to discuss the progress of the Transatlantic Trade and Investment Partnership (TTIP).
In this post I want to look at the strength of pharmaceuticals as a European industry sector, creating jobs and exports for the EU, as well as the potential we have to transform the lives of patients.
Pharmaceuticals are the high technology industry sector with the strongest positive trade balance in the EU. In 2012 the pharmaceutical industry generated a positive trade balance of more than €54.4bn, far ahead of other high technology industries like power generating machinery, IT or telecommunications.
Employment productivity is also highest in the pharmaceutical sector. This means our sector outperforms all other leading industries in two key measures: value added per employee and turnover generated per employee. Members of the European pharmaceutical trade body EFPIA directly employ 700,000 people, 20% of whom are involved in R&D.
Despite the long period of economic contraction in Europe, our industry has held on to its employees, and maintained high levels of R&D investment – to the tune of €30 billion annually.
According to EFPIA, every European lives over 18 years on average with a disability or illness. This not only has a devastating impact on individuals, their families and carers, but a major bearing on European economies and labour markets.
Chronic diseases account for 75% (over €700bn) of Europe’s healthcare bill and are responsible for up to a 7% GDP loss in some EU countries.
As an industry, we are very much aware that we cannot rest on our past and current achievements, and we need to ensure a stable environment to continue developing new and better treatments for patients. This process continues getting tougher every year. It is estimated that developing a new medicine takes 10-15 years on average, costing approximately €1.2 billion.
TTIP represents a key opportunity to remain competitive and to strengthen transatlantic pharmaceutical
discovery. Europe and the US account for more than 75% of
global R&D in life-sciences, 1.4 million jobs in the sector, and 80% of global sales of new medicines.
TTIP must tackle issues that hinder the true potential of the transatlantic pharmaceutical market. In order to unlock this potential, we need an ambitious, comprehensive agreement that addresses regulatory compatibility; upholds intellectual property protection and enforcement; and seeks greater market access and transparency.
Pursuing regulatory convergence is the cornerstone of TTIP – we fully support this goal.
We expect that TTIP can contribute to reconcile divergences between the systems and reduce bureaucratic barriers to trade while ensuring consumers’ greater access to safe, high-quality medicines. We are not talking about de-regulating or about lowering standards; on the contrary, our industry seeks harmonization towards the highest standards to facilitate and spur innovation in the pharmaceutical sector.
Building on the long-standing cooperation between FDA and EMA, further alignment of regulatory processes and procedures can reduce redundant testing and optimize deployment of limited regulatory agency resources.
But advancing on regulatory convergence is not enough: trade agreements like TTIP must uphold the highest IP standards to protect and promote innovation and the economic growth it supports. The value that IP industries bring to the EU economy is unquestionable: 39% of EU GDP, one third of EU jobs and 90% of EU exports, according to the latest EPO-OHIM report.
TTIP can provide the opportunity to underscore the need to promote high-level standards in trade agreements; encourage cooperation of patent offices towards a grace period; provide for effective paediatric incentives and enhanced patent enforcement; and seek alignment on regulatory data protection across the Atlantic. To foster future competitiveness, both EU and US IP systems should be open to further adaptation and alignment in order to incentivise research into unmet needs.
Finally, we believe TTIP can help underscore the importance of pricing and reimbursement systems that reflect the full value that biopharmaceutical medicines can bring to patients and society at large. This includes the value of allowing patients or caregivers to return to work, and impacts on wider health care system efficiency. An annex on market access principles is critical for ensuring patients rapidly gain access to new treatments, and to allow the industry to maintain and grow direct and indirect employment.
We welcome the efforts by TTIP negotiators in bringing our markets closer in these still challenging economic times. We encourage them to continue to aim high and translate their unwavering political support into ambitious, tangible outcomes in all three areas I have highlighted today. If done right, TTIP can greatly benefit patients and help the industry in Europe to continue to be a driver for scientific progress and improved health outcomes.