A prospective view on European pharmaceutical research and development. Policy options to reduce fragmentation and increase competitiveness.

Abstract

This article analyses 3 areas of policy that could reduce the fragmentation and improve the competitiveness of the European pharmaceutical sector. It argues that a potential solution to the issue of fragmentation of pharmaceutical research, development and innovation may be the development of policies at the European level, in those areas that European institutions have a competence. These areas may not necessarily rely exclusively on solving the issue of pricing and reimbursing pharmaceuticals as European Union (EU) Member States invoke the subsidiarity principle to claim policy exclusivity in this area. By contrast, policy areas where European institutions have a competence may include: i) a more intensified collaboration in science and technology policy (supporting the science base, identifying education needs for the future, collaborating in the development of new technologies and fostering university-industry collaboration); ii) support of research and development (R&D) by means of directly channelling funds into basic pharmaceutical research, avoiding duplication of the research effort, developing a set of research priorities, tackling the issue of technology transfer, promoting university-industry and cross-border collaborations or providing incentives that would induce private R&D activities in areas with large socioeconomic impact; and iii) an improvement in the environment for the financing of innovation in the EU, by means of selective use of tax policy at the national level (and where applicable, at the EU level), institutional reform in order to widen the pool of available funds for private investment, and the introduction of schemes that would encourage individuals and institutions to hold equity in innovative companies. The article identifies specific research, regulatory, medical and financing needs that require policy intervention, evaluates the possible dynamic implications of such interventions and highlights the benefits that may accrue from their implementation.