Call to Action for Medical Innovation in Europe

Collaboration between public and private sectors is needed to spur innovation.

Drivers of medical innovation in Europe have called for a policy change: to avoid stifling economic growth, European legislators should consider a more collaborative approach that puts patients first.

In 2009, the Europe Union (EU) spent 1.91 percent of its GDP—the value of all products and services that it produces—on research and development (R&D) in 2009, according to the Organization for Economic Co-operation and Development (OECD). This value falls far short of spends by the United States (2.82 percent) and Japan (3.36 percent) that year.

The European Commission responded in 2010 by launching an ambitious growth strategy—Europe 2020—to drive R&D investments up to 3 percent of the GDP by 2020. The commission estimated the plan would create 3.7 million jobs and increase annual GDP by €795 billion.

So far, the results have been mixed. Although the trend is headed in the right direction, the EU only increased its investment to 1.96 percent. Meanwhile, China jumped from 1.70 percent to 1.99 percent during that same time period, overtaking the EU in this measure for the first time.


“The European Commission has long warned that China is catching up in terms of R&D intensity,” Michael Jennings, a spokesman for research at the commission, told Nature News. “The EU needs a real push now to increase R&D spending in the public sector, but especially in the private sector.”

Red tape, however, stands in the way. The Clinical Trials Directive of 2001, for example, has increased the time and expense needed to conduct a clinical trial. This policy has contributed to a 25 percent drop in clinical trial applications in Europe from 2007 to 2011, according to a proposal to improve the directive.

In some cases, even when innovation has been achieved, price control mechanisms are denying patients access to the new medicines. Marion Kroneabel, managing director of the European Association of Pharma Biotechnology, warned readers of Nature BioTechnology, “This could impact innovation, because cutting the price of drugs will reduce the incentives for biopharma companies to invest in R&D.” Indeed, as a result of this policy change, several companies have decided not to launch products in some countries.

“There really isn’t as efficient of a process from moving from the bench to the bedside in EU as there is United States and Japan,” Constance Bagley, professor at Yale School of Management, said. “In particular, the restrictions on taking publicly funded research from universities and allowing scientists to branch off to start new companies or to sell or license that research is much less developed than in the United States.”

Policies that support collaboration between public and private sectors could help, according to a report by consulting firm Pugatch Consilium. For instance, incorporating public and private funding sources for health care would provide patients with more treatment options while supporting innovation and competition, according to the report. And more investments should be made in programs like the Innovative Medicines Initiative, a public-private research program aim at developing new treatments.

Technology transfer policies must also be clear. One country that understands this need is Sweden, one of the biggest investors in R&D in the EU, at 3.40 percent of its GDP. Realizing the importance of commercializing research findings, the Swedish government established technology transfer offices at eight universities in 2008 to promote innovation and to facilitate the transfer of academic knowledge to the private sector.

Meanwhile, universities and policy makers in other EU member states are still debating whether commercializing technology developed in publicly funded programs is appropriate. Bagley thinks it is. “What’s worse than the idea of subsidizing industry,” she said, “is having research developments that could be saving lives just sitting in labs because there isn’t enough funding to commercialize them.”