Pharma Outlook: Don’t Yield On IP, Work On Trust-Building, Call For Global Cooperation

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The International Federation of Pharmaceutical Manufacturers and Associations (IFPMA) held its 26th assembly this week and elected its new president. He presented the future orientation of the industry group, saying will work on trust-building and needs predictability in the regulatory process, policies that sustain and encourage innovation, and a strong intellectual property system, he said.

The new president’s presentation of these priorities followed a closed-door meeting of the association on 30 October.

The industry group also launched a study [pdf] presenting enabling factors for biopharmaceutical innovation in middle-income countries.

The newly elected president of IFPMA is John Lechleiter, chairman, president and CEO of Eli Lilly.

In his address on 31 October during a biennial conference hosted by IFPMA, Lechleiter said he would “help ensure all the companies and organisations represented here today can carry on the heroic work of healing and saving lives well into the future, with more and more patients getting access to the medicine they need.”

Noncommunicable diseases (NCDs) are the leading cause of premature death in the world, he said, and medical innovation must be sustained. Today, he said, the biopharmaceutical industry has “in some stage of clinical development” nearly 900 potential medicines for cancer, more than 200 potential medicines for cardiovascular conditions, nearly the same amount for diabetes, 80 for HIV/AIDS and about 300 for rare diseases.

However, development costs per drug have skyrocketed, he said, and the industry is in the midst of a five-year period where some US$150 billion of branded pharmaceutical products will lose patent protection. Although this might be great news for consumers, it translates into that much less annual revenue to reinvest in research and development (R&D) for industry (under the current business model).

Industry Adamant on IP, Needs Trust-Building

“When it comes to healthcare policy, we need to speak up for policies that sustain and encourage innovation and against those which will undermine it,” said Lechleiter. Sound intellectual property protection and regulatory systems that keep pace with 21st century science are key to creating ecosystems for innovation, he added.

The work of innovation is not possible and cannot be sustained without IPR protection, he said. “It is the lifeblood of any enterprise in our industry or any industry that seeks to create value from ideas.” On average, he said, it takes about 14 years and €1 billion euros (US$1.2 billion) to bring a new medicine from the drawing board to the pharmacy. Without the ability to protect IP, medical innovation will not be sustainable, he said.

According to Lechleiter, the benefits of IP protection include not only breakthrough medicines but over time a broad range of low-price generic medicines, which he said he believes are an important legacy of the innovative research industry.

Among priorities, Lechleiter said “it is more important than ever that we rebuild trust, and a good place to start” is the IFPMA code of practice developed in interaction with healthcare professionals, medical institutions and patient organisations around promotional activities, disclosure of clinical trial information, continuing medical education, and employee training. He called on members of IFPMA to commit to the “highest ethical standards,” to provide useful information about the benefits and the risks of the industry’s products, to remain vigilant about product safety and remain transparent in all business practices.

Building trust and creating enabling environments for innovation will not be enough, however, he said, and called for an “unprecedented degree of global cooperation.” IFPMA members have many programmes and partnerships, and “spend billions of dollars to provide medicines to the underserved around the world,” he said, adding “we have a long way to go to be a trusted welcome solution partner to governments, non-governmental organisations, and others in developing and implementing systemic reforms which will allow much broader access to quality healthcare.”

The biennial conference focused on the theme of innovation for global health, and gathered some 200 “public and private sector health leaders,” according to an IFPMA press release [pdf].

New Study Describes Innovation Enabling Factors

The new study commissioned by IFPMA on policies that encourage innovation in middle-income countries was conducted by Charles River Associates, a global consulting firm, and was launched on 31 October. The study examined biopharmaceutical innovation sectors in Brazil, China, Colombia, India, Malaysia, Russia, South Africa, and South Korea.

Interviewed by Intellectual Property Watch, Tim Wilsdon, six conclusions were drawn out of the study. In order to encourage innovation, countries need to have a consistent long-term innovative policy that builds progressively overtime and is targeted toward the capacities of those countries.

They also need to get their industrial and health policy “to act together,” he said, in particular for domestic and indigenous innovation, as it is important that they have a market into which to sell their innovations. Countries also need to focus on the types of innovation they are trying to develop. For example, what needs to be done to develop trial activities is different from what is needed for early stage research. Countries need to have a consistent aim and a set of policies to encourage the right kind of environment.

It is not possible to do innovation just through public sector investment, and academia cannot develop medicines, Wilsdon said. Partnerships between public, private and academic institutions are necessary. Also intellectual property is clearly important, not only in the early stages of research, but for the localisation of clinical trials, he said.

Finally, in terms of globalisation, the fragmentation of value chain, the growing markets in middle income countries and the stagnation in some of the pharmaceutical markets in some developed countries “have certainly been acting to help middle income countries to undertake innovative activities,” he added.

China More Attractive than India

Looking at the report, it appears that “you need a consistent innovation strategy to attract investments,” Andrew Jenner, director of intellectual property and trade at IFPMA, told Intellectual Property Watch, adding that China was at the moment a much more attractive environment than India. For example, he said the National Innovation Act of India was drafted in 2008 but not implemented.

“From our perspective every country has a right to chose which IP regime they want and which way they want to go,” but when the industry starts to make investment decisions, that is such elements that it will look at. “If the risk and investment come primarily from our industry, we need to make sure that this investment can be recuperated at the end of the process.”

“What we see more,” he said, is sharing of the risks and investment. “There is a move from profit alone, to profit together,” he said. China is an interesting example of a country providing an enabling environment for innovation, he said, noting that while there always will be challenges, “we know the kind of playing field we are entering.”

India has made some improvements, according to Wilsdon, but “the weakness of the IP regime is one of the concerns about investing in early stage research.” “You need to have confidence in the rules, but mostly confidence in the enforcement of those rules in order to make investments decisions,” he said.

India, one of the largest manufacturers of generic medicines, has been the target of critics from the research-based pharmaceutical industry about its IP regime, and in particular for a provision of its 2005 patent law, called Section 3(d), which creates a high standard for what is patentable. The country’s law has been challenged in court by several pharmaceutical industries (IPW, IP Law, 18 September 2012).

Developing countries are markets of the future, Jenner said, and as such “it is easier to do R&D in the markets that are going to be of interest to us, which is not to say we will ever neglect developed countries, but we need to evolve and we need to adapt,” he said. A more flexible approach to innovation, the sharing of risks and investment will have a direct impact on access and on prices.

“We share the risks and investment,” he said, “but at the end of the process we will share the rewards.”

The IFPMA Assembly held a number of panels where health leaders discussed the role of innovation in improving global health. Among the speakers, World Intellectual Property Organization (WIPO) Director General, Francis Gurry, said innovation required platforms rather than treaties and mentioned WIPO Re:Search, a consortium sponsored by WIPO and BIO Ventures for Global Health, aiming at facilitating research in neglected diseases, which celebrated its first anniversary this week.

Catherine Saez may be reached at

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