BRUSSELS, Nov 26 (APM) - Europe’s biopharmaceutical industry faces greater business risks than five other leading industry sectors, according to a comparative study by Deloitte and Janssen.
The study, released on Tuesday, said that the biopharmaceutical industry has by far the longest time-to-market, at 10-15 years, compared to the four years required to bring a new car to market, and 6-8 years to design and launch a new commercial aircraft.
The research-based drug industry also scores well in the study's assessment of R&D intensity - calculated by averaging the percentage of revenue reinvested in R&D.
It said that the R&D intensity of the biopharmaceutical industry is at 14.7%, almost three times higher than its closest comparator, the consumer electronics industry, which achieves 5.3% - and which is way ahead of the generics, commercial aircraft, automotive and food industries.
The investment in bringing a research-based pharmaceutical product to market is also high, a cost exceeded only by the commercial aircraft sector.
The study calculated an average of $1.25 bn per new product - less than half of the recent figure from Tufts, but excluding the costs of failures. For an airliner it puts the cost at $3.75 bn.
By contrast, it estimated the cost of launching a generic medicine at $2 million.
On patents, it said that while the commercial aircraft, automotive and consumer electronics sectors all benefit, patents are "critical to the biopharmaceutical in order to achieve returns on investment".
The study claimed that the value of a new drug will increase by 96% if protected by a patent, which is twice as much as for a consumer electronics product.
The risk of failure is also very much higher for drug firms than for manufacturers of products that are more modular in nature - such as commercial aircraft, cars, and consumer electronics.
"The biopharmaceutical industry faces the risk of complete failure at all stages of the R&D process", said the study, with nearly a third of molecules that make it to phase III trials failing to achieve market access.
Particular challenges face the industry in market access, fragmented and increasingly complex regulation, and in the costs and challenges of scientific progress.
On regulatory risk, the study said regulators are becoming more risk-averse and demanding safety evidence based on real-world data - leading to failures to obtain market approval as a result of new requirements introduced during a product's development phase.
Fragmentation adds to the uncertainty, as the scientific evidence presented by companies remains open to interpretation by each regulator, resulting in divergent decisions.
The value of the sector to Europe can be sustained only if risks to innovation are adequately rewarded, the study concluded.
"For the biopharmaceutical sector, increasing uncertainty as a result of increasing innovation costs, complex and fragmented regulations, and challenges in obtaining market access could lead to sub-optimal patient care and increased pressure on health systems,” said a statement from Dr Omer Saka, lead author of the report and head of life sciences & healthcare at in Deloitte Belgium.
"All parties involved in the health debate must work together more closely to find ways to reduce uncertainty and ensure that the risks taken by the sector are appropriately rewarded,” said Béatrice Tardieu, director at the Janssen Health Policy Centre, in a statement.
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