How to Foster Pharma Innovation: Symbiotic Solutions for the Belgian State and the Pharma Industry

In most regulated economies, thriving sectoral activity of any industry will provide employment. In particular to the pharma industry, it will provide therapeutic solutions. Belgium’s Pact for the Future, which we discussed in a previous blog post, was created with the acknowledgement that the Belgian pharma industry’s value reaches far beyond the immediate healthcare perspective.

A prospering pharma industry is a benefit to the nation’s strength as a whole. Both the Belgian state as well as the Belgian pharma industry wish Belgium to be a world leader in pharmaceutical innovation and distribution – and it has every potential to be.

Belgium is currently the number two world leader of clinical trials, ranks number one in Europe for running the highest number of product developments a year, and houses over 200 bio/pharmaceutical companies, providing over 32,000 jobs directly. To learn more about the pharma industry in Belgium, please read the Belgium Deep Dive Report.

With so much at stake, and so much potential to grow, it is only logical that state and industry seek profitable and mutually benefitting solutions in consideration of each other’s incentives, drivers, financial needs and limitations.

In the Ministry’s Pact for the Future with national Belgian pharma umbrella associations, a clear budgetary agreement was established that will last until 2019. Although the pharma industry will have to absorb a large chunk of these savings,, one of the Pact co-signers, has happily expressed that the agreement is aligned with the proposals they themselves made in their spring 2014 Memorandum to the State.

Both parties are satisfied; an ideal start for a prosperous future.

The Belgian pharmaceutical industry is convinced that the tax shift -the tax shelter- for the biotech sector and the continuation of the various fiscal measures will strengthen its European leadership position.

There are many ongoing debates on how to ameliorate the dynamic between public needs and the pharmaceutical industry. Several mechanisms for how to reward innovation, enable fair competitive practices and how improve access to medicine have been offered, presented by various interested parties ranging from the World Health Organization and UNITAID, to the Guardian and the Economist:

  • Differential or Tiered pricing – or more appropriately, Equity pricing or competitive pricing
  • Protect the industry against parallel trade and ensure tiered pricing is only advantageous for those who need it, and not for the trade benefit of a third party
  • Risk sharing
  • Separating R&D from manufacturing and marketing departments – The funding and rewarding of research should be based on practical results that the research achieves, rather than linking it directly to sales and pricing strategies
  • Patent Pools for Medicine- Similar to the existing Medicine Patent Pool that provides affordable HIV treatment to resource-poor regions, a Patent Pool for initially high-cost and high-demand medicine can be created through a licensing and royalties scheme
  • Adjust IP regulation to the life-span of the medicine – an antibiotics patent, for example, could expire after the antibiotic has already lost its effect due to bacterial resistance. Patents should incorporate calculations of the product’s utility period, when possible.
  • Foster trust and communication between regulator and regulated

Alternative frameworks for a world that is technologically more advanced and structurally more interconnected each day – smarter and more holistic approaches- have to be devised to nurture innovation, incentivize pharmaceuticals, and to find a middle ground between financial rewards and universal medicine accessibility.

About Laura Weynants

Performs primary and secondary market research to create country reports at TforG. Interviews KOLs and medical sector professionals to build on TforG’s healthcare market expertise and competence networks. Complementing five years of sustainability policy and CSR communication, she now focuses on grasping key medical market trends, structures and opportunities in medical sectors worldwide. Coming from an international background of living in Germany, Spain, USA, UK and Belgium, she has gained a keen insight in international organizations and language skills to perform first hand investigations. She graduated from Sussex University Brighton, UK with a BA English Literature and Sociology and achieved a Master Degree in Sustainability and Corporate Social Responsibility in EOI Business School in Madrid, Spain.