Strategic Thinking for a Strategic Sector

  • by: |
  • 07/03/2014

A new European Commission working paper positions the pharmaceutical industry at the heart of the region’s economic growth prospects. 

Pharmaceutical Industry: A Strategic Sector for the European Economy (available here) marks a significant turning point towards an integrated life sciences strategy for Europe. The working paper takes stock of the sector’s current situation, focusing on developments made over the last years as the first step in preparation for a new strategic agenda.

The paper highlights several points for strategic focus including: 

  • The presence of a viable pharmaceutical industry contributes to the health and the quality of life of citizens by providing remedies to an increasing number of patients, through a more timely, widespread and equal access to pharmaceuticals.
  • Intellectual property rights related to pharmaceuticals have gained prominence in debates about intellectual property rights policy. They have been at the forefront in discussions about the impact of intellectual property rights in terms of the access to medicines, particularly in developing countries. In the light of these divergent views, European companies are often faced with significantly lower levels of intellectual property protection in third countries, particularly in emerging economies. The challenges range from a lack of or non-enforcement of patents to the disclosure or reliance on data submitted by the original manufacturer for obtaining a marketing authorization by regulatory authorities, thus depriving companies of the economic benefits of their investments.
  • Assessing pharmaceutical expenditure also requires taking into account the effects on other health-related costs (like hospitalization, sick leave, pensions, etc.) as well as the overall implications for industrial competitiveness and external trade.

The paper suggests a comprehensive approach to streamlining the policy formulation processes impacting the pharmaceutical industry at European and Member States level. Against this backdrop, the European Commission will organize an event bringing together relevant EU and national public and private stakeholders: decision-makers from public bodies in charge of industrial competitiveness, health, pricing and reimbursement, research and innovation at Member States level, and their Commission counterparts, patients, healthcare professionals, trade unions and industry representatives. 

The strengthening of the competitiveness of the European pharmaceutical industry requires actual implementation of innovation policies at EU and Member States level in order to create incentives and rewards for a sustainable, competitive pharmaceutical sector that addresses public heath needs.

On the intellectual property rights front, more than half of EU industries are considered IPR-intensive, providing for 35% of European jobs and 39% of total economic activity. It is crucial to ensure a strong and effective framework for IP protection and enforcement if we are to preserve the ability of EU industries to adequately grow and export. This also implies raising awareness as to the critical need for IP.  

In related news, the new EU Action Plan of DG MARKT addresses infringements of intellectual property rights in the EU, strengthens the enforcement policy framework against commercial scale IP infringements, by defining a set of 10 innovative actions and tools. This action plan notably embodies the "follow the money” approach, which deprives infringers of their revenues. 

The revised Strategy of DG TRADE for the protection and enforcement of IPRs in third countries rightly accounts for the current challenges which right-holders are faced with when trying to protect or enforce their intellectual property rights abroad. Addressing specifically the challenges of access to medicines worldwide, this new strategy recalls there are "many factors affecting access but mostly unrelated to IPRs". The Commission highlights the need to come up with a broad response to this complex and multifaceted problem, to ensure affordable access to medicines without undermining the incentives needed for continued pharmaceutical research.

The Commission documents are must-reads for all health and finance ministries from Pretoria to Beijing, to Delhi and elsewhere as they debate and consider the future roles of both IPR and strategic collegiality in the realm of pharmaceuticals and the public health.


Center for Medicine in the Public Interest is a nonprofit, non-partisan organization promoting innovative solutions that advance medical progress, reduce health disparities, extend life and make health care more affordable, preventive and patient-centered. CMPI also provides the public, policymakers and the media a reliable source of independent scientific analysis on issues ranging from personalized medicine, food and drug safety, health care reform and comparative effectiveness.

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