Urgent remedy needed for policy headache

Date: 25/10/01

By Richard Pilnik

Innovation is at the core of any successful business. From bricks-and-mortar companies to the most high-tech, every firm has the onus to improve and streamline processes to increase efficiency. The fruits of such efficiency for the pharmaceutical industry come in the form of life-enhancing and life-saving medicines. Not only is innovation the key driver of the business, it is the lifeblood of the European drug sector - and its patients.

Take the example of a young man recently diagnosed with schizophrenia. Despite suffering hallucinations and symptoms of depression, he was unable to get the very medication prescribed to him because it was not available in his country. Whereas another individual with the same disease in another EU member state can get on with his everyday life, this person is forced to go without the medicine he needs and suffer the psychological consequences.

Examples similar to this are not rare in Europe. Indeed, the uptake of new medicines can be slow, with the average delay in the EU (if you compare the first and the last member state to gain access to a new medicine) being more than two years and sometimes reaching more than four, as in the case above.

Current policy conditions mean many patients are being denied rapid access to medicines and a better quality of life. In some cases, having the medicine is a matter of life and death. This situation is not only due to delays in the process of medicine approval but in particular to the protracted and complex pricing and reimbursement negotiations with each one of the EU's 15 member states. Imagine going to your general practitioner to remedy your pain and, depending on which member state you are in, finding that you have to wait a year because of delays in marketing approval or product reimbursement.

This situation is a problem for patients and the companies producing the therapies for them. To rectify this, the Union must turn its attention to what is currently a patchwork of availability for pharmaceuticals. The disarray in which Europe finds itself in this sector not only makes a mockery of single market principles, but is also damaging to both the patient and the industry's progress. The need to innovate pharmaceutical policy-making should be as urgent as the need to innovate for a science, technology or other patient-centric sector. The drugs sector should not be held down by maladroit regulation, but rather boosted by a flexible policy environment which nurtures innovation.

Innovation, however, comes at a price. Pharmaceutical development costs are extremely high - and rising. The average R & D investment for one new product is now in excess of €500 million. And research costs are continuing to soar due to the complexity associated with genomic research. The accent placed on development within the pharmaceutical sector is perhaps best emphasised when compared to other industries. The pharmaceutical industry invests more than twice as much in research as the software sector and three times the rate of both the electronics and telecommunications sectors.

While supplying new drugs to patients is clearly a good thing, it is evident that the long-term debate on health care in Europe concerns who pays for it. In the meantime, making budgetary headroom for innovation needs to be a focus. Government must do its best to reduce obstacles to modernisation while keeping patients' interests a priority.

Companies must be able to operate in a flexible regulatory environment lest Europe pays the price of another brain drain and patients being unable to receive the prescriptions that they need. Over-regulation can often pose obstacles to the timely release of medicines and eventually have a detrimental effect on innovation. The mandatory criteria to make a medicine available include high standards of quality, safety and efficacy. Additional criteria in the form of health outcomes analysis can further distort availability and mean that potentially significant innovation may be discarded before it has had an opportunity to prove its value. Such hurdles would further hinder development, hurt companies in Europe and pose more barriers between patients and their medicines.

While health outcome studies are sometimes used as a part of responses to cost pressures, linked to ageing populations, they should not play a role in the marketing approval process at either member state or EU level.

Modelling techniques are not sufficient to predict the fate of a new medicine. They cannot foresee the preferences of patients and physicians, nor can they predict the full benefits a drug may deliver. These techniques can be helpful to make provisional assessments but use of these for marketing approval is neither practical nor realistic. The potential benefit of a new medicine would be at risk of never coming to light.

So why the urgent need to improve the availability of innovation? The pharmaceutical industry finds itself in a period where innovation is not just needed, but is absolutely crucial given the changes taking place in Europe. These include a dramatic shift in demographics that will affect the European Union before other parts of the world such as America. Currently, in Europe approximately 16 per cent of the population is over 60. This figure is expected to double by 2025. In other words, the clock is ticking.

Demographics aside, technology's rapid advance has meant that progress is moving at a velocity never before seen. The industry must be empowered to keep up with the pack. And one certainly cannot turn a deaf ear to the consumer who is better informed than ever and capable of voicing a position when policies are being made.

The changes occurring now translate into a need for review of the EU market and regulatory paradigm where pharmaceuticals are concerned. These must introduce more quickly new medicines across Europe and promote better-informed patients and a vibrant industry. The policy-making machine is struggling to keep up with advances in the private sector while the urgency for it to work with industry has never been greater.

In the sector's favour is the dizzying speed with which uptake of new technologies is spreading knowledge and innovation within firms and their labs. Information technology has certainly played a role in the rapid increase of the number of molecules being researched.

With the advent of development schemes such as the human genome project, firms are already moving quickly to sort through the avalanche of new genetic data. We must not forget, however, that an identified molecule and a finished medicine are two different things separated by hundreds of millions of euros of research, extensive testing and lengthy processes for marketing approval, pricing and reimbursement.

We are standing on the horizon of a revolution with the progress achieved in the mapping of the complete sequence of human DNA. This will offer the medical community a glimpse at the human Rosetta Stone while creating a tidal wave of research initiatives to offer pharmaceutical responses to disease targets. Similar to the stone found near Rosetta, Egypt in 1799, which provided scientists with ground-breaking clues to the inscription of ancient hieroglyphics, these various genomic discoveries are estimated to translate into a twenty-fold increase in biological targets - or to some 10,000 new targets for research.

New technologies hold the key for research to gain a better understanding of complex disease processes. The obvious potential for discovery in the domain of hereditary diseases such as cancers, heart disease, schizophrenia and depression give the industry great goals.

To reach such targets, the systems currently in place that oversee the industry need to be energised and streamlined while remaining flexible to keep up with high-speed changes that have become the signature of the medical, pharmaceutical and technological sectors in Europe.

• Richard Pilnik is president of European operations for Eli Lilly & Co.

Viewpoint article in which author says innovation is the lifeblood of the drug sector and its patients. Article forms part of a special report on pharmaceuticals.