Why Europe needs a strong industrial strategy


Sustainable Livelihoods

Picture of George Katzourakis
George Katzourakis

Senior Vice-President and Head of Europe at GlaxoSmithKilne (GSK)

A while ago, I read a letter from a lady suffering from severe asthma. The letter explained how the treatment she was taking made a difference to her life and her ability to look after her family. It gave her a reason to fight again. Patient testimonies like this one serve as a daily reminder of the impact our industry can have on the lives of people and the responsibility this brings. Pharmaceutical companies like GSK have a duty to innovate and to develop medicines that meet the needs of patients

Thanks to the progress that has been made in treating disease, people all over Europe are living longer, healthier and more productive lives. Since the 1980s, we have seen death rates from HIV fall by over 80%. Since the 1990s death from cancer has fallen by 20%. And more recently, people living with severe asthma are now able to self-administer treatments at home, instead of undertaking regular trips to hospitals. Innovative solutions are becoming even more important at a time where healthcare systems are facing unprecedented pressure. Europe needs to ensure the continued strength of this industry.

The COVID-19 crisis has re-emphasised the strategic importance of the healthcare sector for Europe’s future. Since the outbreak, industry has come together to commit resources, expertise and people to the fight against this pandemic. The health industry is working around the clock to find new vaccines, diagnostics and treatments. It is continuing to supply existing vaccines and medicines for patients who remain affected by other diseases. There has been extraordinary coordination with governments including on testing capability and to support continuity of supply. Regular dialogue and support from the European Commission, the European Medicines Agency and member states have been one of key enablers to make this possible.

The EU’s new Industrial Strategy is right to acknowledge the crucial importance of pharmaceuticals for its future and recognise the value of innovation. The innovative pharmaceutical sector has grown to be an important contributor not only to improving health, but also to the European economy, with over €105bn a year contributed to the balance of trade and employing over 765,000 people in Europe. At GSK alone, over 27,000 employees help develop, produce and distribute much-needed medicines and vaccines, through a network that spans 15 manufacturing sites and four R&D sites across the EU. Their impact is felt by patients, but also by European society.

The EU’s new Industrial Strategy, and the upcoming Pharmaceutical Strategy, can help reverse the decline

While these numbers sound impressive, we cannot look at Europe in isolation: we operate in a global environment. More needs to be done for Europe to regain its competitiveness in global medical innovation. Competition to attract global life-science investment has never been more intense and other world economies are moving fast.

Thirty years ago, the EU had the highest pharmaceutical R&D investments in the world (€7.8bn in 1990). Nowadays, while R&D investments in Europe have increased fivefold (€35.3bn in 2017), the US has seen its own multiplied by more than 800%. If this continues, Europe risks losing its attractiveness permanently, not only to the US, but also to key competitors like China.

China, for instance, has taken measures to put health at the centre of policymaking and implemented reforms to provide a framework that fosters innovation in healthcare. This contributes to creating a more attractive environment for pharmaceutical businesses to thrive, leading to greater innovation and access for patients.

Looking ahead, the good news is that the EU’s new Industrial Strategy, and the upcoming Pharmaceutical Strategy, can help reverse the decline. There are three key ingredients that can help Europe regain its competitiveness.

Europe continues to remain home to some of the world’s brightest minds, most innovative industries and best universities and research institutes

First, create a world-class framework for innovation. Europe has long boasted a stable regulatory framework which provides businesses with the certainty and predictability needed to invest in the long process of research and development. It is essential that this is not dismantled and that it is further improved to respond to the new paradigm of medicine development and the latest technological advances. Examples include incorporating real-world evidence and data in the decision-making process and accepting innovative clinical trial approaches. If innovation is the key ingredient for Europe’s success, as the Industrial Strategy makes clear, the role of the EU’s strong framework for intellectual property rights in promoting innovation cannot be underestimated and should be further supported.

Second, accelerate the digital transformation. The industry has undergone a profound transformation in the past 50 years, not least in the way it conducts research and development. The pharmaceutical industry should tap into cutting-edge technology such as artificial intelligence (AI) and our understanding of the human genome to foster the discovery of new treatments. This industry is not only potentially entering an era of unprecedented R&D productivity, with many benefits for both patients and the industrial basis, but it could also serve as a catalyst for the further development of AI and machine learning.

Third, lay strong foundations for strategic partnerships. In its Industrial Strategy, the EU has recognised the strategic importance of pharmaceuticals for its future. One of the linchpins for its success will be the new partnership approach proposed by the European Commission. If the ongoing events have taught us anything, it is that, faced with wide and complex challenges such as COVID-19, we need the contribution of all stakeholders in tackling issues and exploring solutions. Health professionals, volunteers, health systems, EU institutions, member states and industry are standing shoulder to shoulder in this fight. We won’t rest until we succeed.

At the end of the last century, Europe was the global powerhouse of innovation and medical breakthroughs. Today, Europe continues to remain home to some of the world’s brightest minds, most innovative industries and best universities and research institutes. But many are moving away from it. The new EU Industrial Strategy offers an opportunity to reverse this trend and create the right environment for innovation to come back home and for a bright, competitive future. We must seize it now before it is too late.

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