Sustainable innovation and the need for a carefully balanced intellectual property incentives system

The importance of intellectual property (IP) awards and incentives cannot be overstated. They are the foundation upon which innovation is built. The extensive range of new medicines that is available today and in the pipeline for tomorrow would not be there without robust IP protection.
IP allows industry to take risk and invest in the long, complex, risky and costly process of R&D to bring new medicines to patients. The real results speak for themselves:
  • Since 1990’s, industry has brought over 1,100 new medicines to patients in Europe;
  • there are over 7000 medicines in development in spite of a high risk of failure;
  • Since the adoption of the Orphan Medicinal Products regulation in 2000, 136 orphan medicines have been approved by the EMA compared to 8 before the Regulation;
  • Since the adoption of the paediatric regulation the number of  authorized new paediatric indications has more than doubled (238) and 800 Paediatric investigation plans  are ongoing.
Over time, the EU pharmaceutical incentives and rewards system has been designed and policy makers have fine tuned them to take better account of what society and patients need as well as the realities of pharmaceutical innovation. These incentives work side by side and protect different aspects of innovations.
Changing any part of this framework risks undermining the innovation process that patients, healthcare systems and society are relying on. This can best be compared with the carefully constructed tower of building blocks in a Jenga® game, that requires coordination, precision and strategy.

We welcome the Commission’s initiative to analyse the system in order to ensure it is still fit for purpose and optimize where appropriate. However, this exercise should look at the whole tower with all the individual aspects and elements that are intrinsically connected. Taking out one block without careful consideration of any wider impact could cause the whole tower to collapse.

Destabilizing the IP incentives system in Europe would be detrimental to Europe’s ability to compete effectively for global R&D investment, affecting jobs and trade balance, competition in the market and patient access to innovative medicines. It would jeopardize the substantial investment of more than 35 billion that the pharmaceutical industry made in Europe last year and hat led to the development of many important advances in medical treatment.
Far from diminishing, the role of IP and incentives remains as important as ever in creating the conditions, which allow research into major health challenges like age-related and chronic diseases such as dementia or diabetes, as well as anti-microbial resistance (AMR) . While provisions for orphan and paediatric drugs have made a significant difference in the availability of new treatments, the reality is that only 5 % of rare diseases today have available treatment options and much work remains.

In building the right regulatory and IP framework to support this need, policy-makers must put an evidence-based front and centre. This requires the Commission to robustly analyse the full eco-system to ensure that future decisions allow the Jenga® tower to grow rather than toppling it over by ill-thought through removal of key supports. Future decisions must promote sustainable innovation, the best health outcomes, and a healthy, competitive and diverse pharmaceutical industry on a global stage , while creating opportunities for jobs & growth. As a by-product of such an approach, we will see a continued contibution of the EU pharmaceutical industry to a positive EU trade balance – all this will be in line with the Commission’s Industrial Policy Strategy. Furthermore, such an analysis needs to ensure policy outcomes that avoid or minimize any potential inconsistencies with existing EU legislation and policy.
I hope the Commission knows how to play Jenga®.

Kristine Peers

Kristine Peers is General Counsel at EFPIA.Kristine builds on a career combining legal expertise with public policy...
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