Biotechnology industry trade associations are key players in the global drug development ecosystem. They are advocates for an industry working to make sense of a complex science within the regulatory and ethical norms of their nations to meet the public’s demand for a longer and healthier life.
They also provide an essential public service, interpreting what may appear to be an esoteric industry, one that experiences more failures than successes and creates fresh controversies with each scientific advance, but also is recognized as the main driver of healthcare innovation worldwide.
In the development of the global biotechnology industry, there are more similarities than differences from country to country. One is the ongoing emergence of biotech startups leading the progress in developing new medicines.
As Jim Greenwood, president and CEO of the US-based Biotechnology Innovation Organization (BIO), observes, “One fact that many people may not be aware of is that more than 90% of drug companies are unprofitable. They take enormous risks every day to develop the next generation of breakthrough medicines and cures for the millions of patients suffering from diseases for which there are currently are no effective cures or treatments.”
BIOTECanada President and CEO Andrew Casey says the strength of his nation’s life sciences ecosystem “lies in its ability to connect” its startup companies with key partners, such as “investors and large multi-national corporations that often perform the dual role of investor and commercial partner.”
Another similarity for these associations is government oversight. Drug development, from laboratory discovery to delivery at the patient’s bedside, is among the most tightly regulated and costly commercial endeavors.
One of the most contentious regulatory challenges is reimbursement. BIO Deutschland CEO Viola Bronsema says simply, “Pricing in Germany can be an issue.” When the government two years ago tried to add restrictions onto the existing price limitations, BIO Deutschland led the effort to block the measure.
In the UK, patient access to new medicines recently became more complicated. As Bioindustry Association (BIA) CEO Steve Bates explains, since the Brexit referendum withdrawing the UK from the European Union, “the BIA has campaigned for regulatory alignment and cooperation with Europe to ensure patients on both sides of the channel do not face interruption to the supply of medicines.”
In this installment of WuXi’s exclusive series on the future of drug discovery and development, leaders of life sciences trade associations discuss the industry in their countries, the challenges companies face, the successes, and the role associations play in supporting their members. They include BIA’s Steve Bates, BIO Deutschland’s Viola Bronsema, BIOTECanada’s Andrew Casey, and BIO’s Jim Greenwood. Their complete interviews also are available on this website.
A Global Industry
The biotechnology industry is relatively young, having emerged in the last quarter of the 20th century and surging into prominence in the past two decades with the “Big Science” of genomics ushering in a new era in drug development with such advances as immunotherapy, CRISPR gene editing, gene and cell therapies, and digital therapeutics.
A 2018 biopharmaceutical industry profile from the Pharmaceutical Research and Manufacturers of America (PhRMA) reports there are “7,000 medicines in clinical development globally” and “74% have the potential to be first-in-class treatments.”
The US is considered the birthplace of the biotechnology industry and Greenwood notes the country is home to “thousands of biotechnology companies – large and small” – that have generated almost 60% of all new medicines.
But the US model of the biotech industry – university scientific discoveries transferred to entrepreneurial start-ups for commercial development in partnership with established biopharmaceutical companies – has been replicated successfully across the globe.
In the UK, the BIA’s Steve Bates observes, “UK scientists, companies and institutions are playing leading roles in the genomics-driven transformation of healthcare. The Wellcome Sanger Institute, a major contributor to the Human Genome Project and now to Genomics England’s 100,000 Genomes Project, houses the largest concentration of genomics scientists in the world.”
The UK industry, Bates says, has been “built up around our strong science base, attracting funding from across the globe” and “companies are maturing and moving through the financing life cycle, with company IPOs raising more than twice as much money in 2017 than in 2016.”
BIO Deutschland’s Viola Bronsema says Germany developed “a national research strategy for a bioeconomy, which set the stage for a lot of important research activities.” The country is home to world-class universities and research institutes, she adds, such as the Max Planck Society, Helmholtz Association of German Research Centres and the Leibniz Association.
“This excellent and solid research base is key to the success of the German biotech sector,” Bronsema says. “Technology transfer from the academic sector to biotech and pharma is a driving force of innovation.”
In Canada, the “biotechnology sector has been identified by the government as an economic asset and key priority for the economy,” says BIOTECanada’s Andrew Casey. “Canada is now home to a thriving biotech ecosystem, consisting of clusters in every province, which bring together world-class universities and research institutes, biotech entrepreneurs, large multi-national players and a highly educated workforce.”
The US, UK, Canada and Germany are among the leaders in the rapid development of the global biotechnology industry, but for all the successes, the industry still faces significant scientific, business and regulatory challenges.
As BIO’s Jim Greenwood states, “Drug discovery is an extremely expensive, time consuming and risky endeavor.”
A BIO 2016 report, Clinical Development Success Rates, revealed that “the overall likelihood of approval from Phase I for all developmental (drug) candidates was 9.6%.” Despite a daunting 90% failure rate of drug candidates, few would argue the risks outweigh the benefits.
“While modern biotechnology in America is a young industry, in just a few decades, the entrepreneurs, scientists, researchers and investors working in this field have firmly established themselves at the forefront of medical innovation,” Greenwood says.
Trade associations, such as BIO, are positioned to assist companies in addressing their “risky endeavor” by facilitating business-to-business activities, but their main value arguably lies in advocating for a positive regulatory and public policy environment within their country’s drug development ecosystem.
For example, Greenwood says, the US government “has developed a public policy environment that incentivizes investment in innovation.” Some of the key programs, he says, are aggressive federal government funding of academic research through the National Institutes of Health; financial incentives for the transfer of patents from universities to biotech companies; government grants for start-up companies; and protection of intellectual property.
Casey says Canada’s government policies, which he refers to as “hosting conditions,” include supportive tax regimes; intellectual property protection and support; regulatory efficiency; and government programs such as the Industrial Research Assistance Program and Scientific Research and Experimental Development Tax incentives.”
All the programs, he says, “combine to establish the hosting conditions necessary to attract talent and investment needed to successfully commercialize innovation.”
Meanwhile, Germany’s biotech infrastructure, according to Bronsema, started with the federal BioRegio competition back in the 1990s. The government program, she says, developed industry clusters such as those in Munich, Heidelberg, Mainz and Berlin, which “provide laboratory space, professional networks and advice that are particularly important for newly founded companies.”
Over the next few years, Bronsema adds, the German government plans to roll out a major new program, called “From Biology to Innovation” aimed at boosting support of the nation’s bioeconomy.
In the UK, Bates says the government last year approved a £20 billion package to support investment in innovative companies over the next 10 years, and this year “UK pension funds will be nudged into backing life sciences.”
In addition, other programs include the Biomedical Catalyst, which Bates says provides 100 million “to support early stage projects to bridge the valley of death in early stage funding.”
Bates credits the government’s support of early stage and translational science with establishing the nation as the European leader in number of products in preclinical and clinical development.
As exemplified by the nations and biotech industries profiled here, public-private partnerships are an essential element of successful new drug development, and they are also major pressure-points for ongoing challenges.
The kinds of challenges may vary from country to country, but there are some common elements, such as access to talent and private sector capital, regulatory oversight of clinical development, and pricing of new medicines.
For example, in the US, the high cost of new drugs for patients continues to be a major challenge for government and the industry. Greenwood draws a direct connection between industry investment in new drug development and market pricing for patients and their insurers.
“Since drug development requires, and receives, the highest levels of R&D reinvestment of any industry,” he explains, “the pricing for new medicines must reflect the need to sustain this critical innovation ecosystem. Revenues from the few successes are needed to reward past investments and attract new investments.”
In Germany, the government has moved to limit the cost of new medicines by evaluating their benefit over existing therapies. “If it is not possible to show an additional benefit to the comparative therapy,” Bronsema explains, “the price is set in a reference price group with comparable active ingredients.”
If the new drug is an improvement over existing therapies, she says, the government negotiates with the drug maker to apply a “supplement on top of the price of the suitable comparative therapy,” and “during the first year after market access, the drug developer can set the price.”
Two years ago, Bronsema says, the government also tried to limit prices during the first year on the market, but her trade association successfully blocked the measure.
The challenges with respect to accessing private sector capital and talent, Casey says, involve the heated competition to secure both among countries with established and emerging biotechnology industries.
“The US has the most successful biotechnology clusters in the world,” Casey says, “while the UK, Belgium, Australia and Israel are among the countries with strategies in place to commercialize the fruits of their robust biotech industries.”
Investment and talent, he explains, “are inherently mobile.” If Canada cannot compete, he suggests, “We stand to lose not only investment and talent, but ultimately the innovations themselves.”
Regulatory oversight of new drugs is a multifaceted challenge. It ensures new drugs are safe and effective, requires regulators to keep pace with the rapidly advancing science, and directly affects the time and expense of development.
“A well-functioning and sound regulatory system can be a significant competitive advantage for the industry it regulates as it seeks to compete in the global space,” Casey says.
He also suggests the regulatory process and reimbursement policy should be coordinated. “All too often, governments tend to compartmentalize their regulatory and reimbursement policies,” he says.
The biotechnology industry is unlike other high-tech industries in that companies require significant amounts of capital to operate, remain unprofitable for years as they develop their products under the watchful eye of government regulators, and many times, fail to reach their goals.
Difficulties aside, Greenwood regularly reminds his audiences, “I’m proud to say that our industry has opened the doors to a new era of medicine. The therapies coming to the market and in clinical development today are unlike any we’ve seen in the history of medicine.”