Reclaiming medicines and health innovation for our health

Europe’s competitiveness, or rather its lagging behind the United States and China as highlighted in the Mario Draghi report[1], is at the heart of European Commission President Ursula von der Leyen’s ambition for the new Commission, with innovation heralded as the central driving force to boost economic growth and competitiveness, including in the health sector [2].

But competitive in what? Comparing indicators like the number of patents, research and development (R&D) investment levels, the number of clinical trials in Europe or the number of jobs or start-ups in the pharmaceutical sector are the wrong metrics for measuring competitiveness in the health sector; they say nothing about the public health improvements they are supposed to underpin. Technological innovation can lead to new products and revenue streams, but if these do not provide health benefits or are unavailable or unaffordable to individuals or health systems, they are worthless from a health perspective. A case in point is that although the U.S. may score better than Europe in the aforementioned economic metrics, it is at the bottom of OECD rankings for most health indicators, with extreme inequalities and frequent medical personal bankruptcies, despite spending more on healthcare as a percentage of GDP than any other high-income country [3]. Compared to the U.S. and most other regions of the world, Europe is very competitive for achieving good health outcomes- something we should be proud of and foster, rather than competing it away in the name of misguided economic success indicators.

Innovation and competitiveness in the health sector must be measured in terms of patient and public health benefits, including affordable and equitable access to health innovations, not in terms of economic competitiveness. Much can be done to improve Europe’s competitiveness and effectiveness from this perspective, which would additionally bring significant savings that can be invested into true health innovation and better healthcare.

For instance, more than half of new ‘innovative medicines’ today receive marketing authorisation without any evidence of therapeutic benefit compared to what already exists. Evidently in the current policy environment, competing for a share of lucrative markets with ‘me-too’ products is more profitable than investing in research that provides true patient benefits [4]. For ordinary commodities, consumer choice between competing products is expected to deliver the best quality for the lowest price but such market dynamics do not apply to medicines. Instead, the plethora of ‘me-too’ medicines is an expression of the inefficiency of the current R&D ecosystem. At the same time, many health needs remain unmet and understudied [5], including antimicrobial resistance and epidemic preparedness, because the research priorities of pharmaceutical companies are largely driven by financial market imperatives [6]. Companies spend more on marketing, stock buybacks and dividend payments than on R&D, which focuses solely on the most lucrative opportunities, including ‘me-too’ products [7]. For those new products that represent a therapeutic advance, companies are charging increasingly high prices that are putting unsustainable strains on European health systems, even those of the wealthiest countries [8]. Contrary to the claim that high prices finance future innovation, studies have shown that they mainly serve to maximise company revenues and financial returns for investors and shareholders, rather than reinvestment into R&D [9].

In order to increase the outputs and competitiveness of our health innovation ecosystem in delivering patient benefit, equity and public health impact, we must design and implement policies to increase public health outcomes at an affordable price, and direct financing accordingly.

For instance, regulatory authorities could demand evidence of meaningful patient or public health benefit as a condition towards obtaining marketing authorisation for new medicines, as was once the case in certain countries [10]. This would reduce the significant wastage of ‘me-too’ drugs that is currently tolerated, if not incentivised, while reorienting R&D priorities towards true medical needs.

In parallel, increased public funding should be allocated to efforts that address unmet health needs and generate evidence of patient benefit. To date, opportunities to deliver meaningful medical innovation are being missed or underexplored because we have left the supply of novel medicinal products to commercial companies who choose the disease or patient group in which to invest based on market prospects, while ignoring other health needs and patients. Rather than focusing industrial policy primarily on ‘de-risking’ the R&D value chain for commercial actors, public policies should be designed to empower non-profit actors to fully engage in needs-driven R&D and pursue marketing authorisation to improve clinical practice outside of the commercial realm [11]. In addition, to maximise health impact of medical innovation, investigational and newly-approved products must be available to the medical community for additional studies that could demonstrate patient benefit beyond the remits of original marketing authorisation [12].

A critical enabler towards increasing the efficiency and competitiveness of medical innovation for health purposes would be a large, publicly-supported, independent clinical trial network equipped and resourced to conduct public health-focused trials, including comparative studies of investigational drugs pursued by commercial companies [13]. In addition to the wastage of too many small, uncoordinated and often underpowered trials [14], there is a fundamental conflict of interest in letting companies that have a vested interest in the outcome of clinical trials design and conduct such trials, analyse the data and ultimately own the data. Independent clinical trials designed to seek patient benefit, prioritise unmet needs, adopt standardised methodologies, adaptive trial designs and head-to-head comparisons, and publicly share the (anonymised) data could ensure more efficient use of trial capacity and patients, and of financial resources.

To increase competitive and sustainable pricing of pharmaceuticals, while also rewarding therapeutic advances, countries can adopt fair pricing calculators, such as that proposed by the International Association of Mutual Benefit Societies (IAM) [15], which will also increase equitable access throughout the European Union. Furthermore, in order to decrease the amount of money that gets extracted from the pharmaceutical innovation ecosystems into the financial markets, the use of stock buybacks [16] can be restricted, and minimum levels of reinvestments into R&D can be mandated as a condition to access tax and other benefits.

These policy proposals would reboot the European R&D ecosystem towards health benefits, unleash creativity and innovation to address unmet health needs and release much-needed public financing for a more efficient public interest-driven ecosystem that delivers therapeutic benefit, affordability and equitable access in a competitive way.

[1] Draghi M. The Future of European competitiveness. 2024 https://commission.europa.eu/topics/strengthening-european-competitiveness/eu-competitiveness-looking-ahead_en (accessed Oct 17, 2024). 

[2] Press Statement by President von der Leyen on the next College of Commissioners. European Commission – European Commission. https://ec.europa.eu/commission/presscorner/detail/en/ip_24_4723. 

[3] Gunja MZ, Gumas ED, Williams II. U.S. Health Care from a Global Perspective, 2022: Accelerating Spending, Worsening Outcomes. The Commonwealth Fund, 2023 DOI:10.26099/8ejy-yc74. 

[4] Wieseler B. Patients need better treatments, not just more of the same. BMJ 2023; : p1466.

[5] Cleemput I, de Noordhout CM, Goettsch W. Identifying disease-specific patient and societal needs to foster needs-driven healthcare and innovation policies in the EU. Eurohealth 2023; 29. 

[6] SiRM, L.E.K. Consulting, RAND Europe. The Financial Ecosystem of Pharmaceutical R&D: An evidence base to inform further dialogue. 2022 https://www.lek.com/insights/sr/financial-ecosystem-pharmaceutical-rd. 

[7] Torreele E. Why are our medicines so expensive? Spoiler: Not for the reasons you are being told…. Eur J Gen Pract 2024; 30: 2308006. 

[8] Eccles M. Drug prices in Europe are soaring — and are only expected to rise. POLITICO 2024; published online Oct 14. https://www.politico.eu/article/drug-medicine-price-europe-rising-big-pharma-europe/. 

[9] Angelis A, Polyakov R, Wouters OJ, Torreele E, McKee M. High drug prices are not justified by industry’s spending on research and development. BMJ 2023; 380: e071710. 

[10] Brooks E, Geyer R. Whatever happened to the Norwegian Medical Need Clause? Lessons for current debates in EU pharmaceutical regulation. Sociology of Health & Illness 2016; 38: 576–91. 

[11] Anticancer Fund. Our commitment to innovation in cancer treatment. Manifesto. 2024; published online June. https://www.anticancerfund.org/en/manifesto-2024/urgency-now. 

[12] Pantziarka P, Vandamme P, Bouche G, et al.On-patent drug repurposing. 2024 https://www.risingtide-foundation.org/wp-content/uploads/2024/02/On-patent-Drug-Repurposing-White-Paper-02-2024.pdf.

[13] Negrouk A, Lacombe D, Cardoso F, et al.Safeguarding the future of independent, academic clinical cancer research in Europe for the benefit of patients. ESMO Open 2017; 2: e000187. 

[14] Bonten M. Ecraid blog post: Is the clinical trials enterprise broken? https://www.ecraid.eu/news/blog-post-clinical-trials-enterprise-broken. 

[15] International Association of Mutual Benefit Societies. Fair Pricing Calculator. https://fairpricingcalculator.eu/.

[16] Lazonick W, Tulum Ö. Sick with “Shareholder Value”: US Pharma’s Financialized Business Model During the Pandemic. Institute for New Economic Thinking, 2022 https://www.ineteconomics.org/uploads/papers/LazonickTulum-Pharma.pdf.

The views expressed in this #CriticalThinking article reflect those of the author(s) and not of Friends of Europe.