Healthcare needs MORE innovation (not less)

Last year, I wrote about the concept of failing forward. I’ll repeat that mantra again. Although Lilly has invested 3 billion USD over 30 years to develop a potential treatment for Alzheimer’s with no approved medicine to date, we embrace and learn from these failures…because we’re failing forward. Indeed, learning from failure is required to succeed in medical innovation.  

We’ve come a long way (but there’s far to go)

A cure for Alzheimer’s remains elusive (although we haven’t given up). But elsewhere in biopharma, we’ve seen amazing progress in what’s been a great era for innovative medicines. Two out of every three people diagnosed with cancer today are still alive after five years.1 HIV has transformed from a death sentence in the 1990s to a manageable disease today.

These are just two examples, but since the 1990’s, our industry has brought over 1,100 new medicines to patients who need them.2

In some ways, we’re just getting started. There are currently 7,000 medicines in development globally.3 Many of these cover areas of high burden and limited treatment options where we are desperately looking for breakthroughs, like Alzheimer’s and cancer. 

But R&D is also a long, complex process, requiring endless experimentation. We’re keenly aware that only 1-2 of every 10,000 molecules discovered in a laboratory will become an actual medicine.4

And innovating is not getting any easier. As we exhaust many areas of science, we need to shift to more complex ones, like genomics, advanced therapies, and other innovative technologies.

Intellectual property incentives power investment 

The biopharma industry invests €35bn annually in research and development in Europe 5with over 4,000 industry-sponsored clinical trials currently underway.6

Maintaining this level of innovation is essential to keep research on track towards life-saving breakthroughs. 

One reason that our industry invests so heavily in Europe is the incentive offered by strong and predictable IP. It emboldens companies to conduct high-risk R&D by giving assurance that investments are protected for a certain period of time and will not be copied by others who have not undertaken any of the risk.

Without incentives for high-risk and costly medical R&D, cures for diseases like Alzheimer’s are less likely to be discovered. The risks will simply become too high. And that’s a risk that millions of patients, and their families, cannot afford to take.

What about rising costs?

Some people have suggested weakening IP incentives for medicines to address rising healthcare costs.

We agree that we need to curb costs. But weakening IP is not the solution. In the EU, hospitalisation and elderly care have been the main drivers of increasing costs, not the cost of medicines.7 So doing away with IP incentives - the lifeblood of medical innovation - is not the right way to go about reducing overall costs. Indeed, rising complexity in healthcare requires more innovation, not less, as new treatments are our best bet for containing health care costs at a time when healthcare systems are under pressure from an ageing population and a rise in chronic diseases.

Better solutions for Europe 

We all agree that healthcare costs need to be sustainable. But stifling innovation is not the answer.

So what is? For starters, moving towards a system that is value-based, so reimbursement across healthcare products and services reflects positive outcomes for patients, rather than the number of nights in a hospital bed or the number of drugs prescribed. Value-based reimbursement will also help to reduce waste. It is estimated that 20% of healthcare spending is wasted on ineffective interventions8. If we re-orient healthcare systems towards delivering value, rather than delivering interventions, this figure will fall.

This is merely a starting point. Success will require collaboration amongst stakeholders over many years. 

But now is the time to focus on solutions that can move medical research forward, not backward. There are no easy fixes. Working together and embracing innovation really is our best bet for reducing costs and making healthcare sustainable in the long-term.


[1] Centers for Disease Control and Prevention. March 12, 2015. Accessed March 2017.
[2] Evaluate Pharma database
[3] Adis R&D Insight Database
[4] EFPIA: The Pharmaceutical Industry in Figures Key Data 2017
[5]  EFPIA: The Pharmaceutical Industry in Figures Key Data 2017
[6] EFPIA Clinical Trials Key Facts
[7] OECD Health Statistics Database (2013); Eurostat Database (2013), as included in EFPIA’s Health & Growth. September 21, 2015. Accessed April 2017.
[8] OECD report: Tackling Wasteful Spending on Health (2017)