A supportive policy environment is what makes the difference to investors, say local executives of multinational companies
WASHINGTON, D.C. (June 11, 2015) – – In a new study from Pugatch Consilium consultancy, the U.S. and European economies continue to top the global charts in terms of attractiveness for biopharmaceutical investment. Notwithstanding low costs and considerable potential, emerging markets still come in at the bottom. Canada is also found to be surprisingly low on the list compared to developed economies, mainly due to challenging intellectual property policies.
The study, Measuring the Global Biomedical Pulse: The Biopharmaceutical Investment & Competitiveness (BCI) Survey (commissioned by PhRMA), finds that economies with policy environments that support investment and innovation rank as the most attractive in the eyes of top level executives operating on the ground, while economies with weak biopharmaceutical policies are considered to be much less competitive.
“The study reaffirms that the policy environment matters,” said John Castellani, president and CEO, PhRMA. “It shows that economies could be much better equipped to attract a portion of the billions of dollars invested globally by the biopharmaceutical industry each year if policy conditions improve and become more supportive.”
The BCI, a global survey-based index of economies’ biomedical competiveness, polls 350 biopharmaceutical executives of top-ranking multinational companies operating in 16 economies – who serve as ambassadors to their companies of the investment attractiveness of each market. By gauging their confidence in a given market and translating it into a quantitative score, the BCI enables a unique and highly relevant snapshot of economies’ biomedical competitiveness.
Top performers in the BCI – the U.S., UK, Switzerland and Ireland – all score above 80% of the total possible score and place at the top of the sample in most of the seven major categories of the survey, which range from the ability to leverage R&D and manufacturing capabilities to the regulatory, IP and market environment. All four boast excellent and effective scientific research systems, regulatory and intellectual property (IP) frameworks that meet the highest international standards and relatively supportive market access environments.
Markets falling into the bottom 25% of the sample – the BRIC economies plus Turkey – score less than 60 out of 100, with their biomedical investment environments characterized as “struggling to compete” relative to the other sampled economies. Though each market has its own specific challenges, common threads exist across all five, particularly in the areas of regulatory quality and efficiency, ability to secure a fair price and protection of biopharmaceutical IP rights.
The study also uncovers surprising challenges in certain developed markets. Canada has the least attractive environment among the developed economies. Most notably, in the area of intellectual property protection Canada is considered an outlier among developed economies, ranked by local executives as the least attractive of the group and scoring a full 20% below the top developed market. Local executives classified both Canada and Japan’s pricing and reimbursement systems as being particularly stringent, rating the market access environments in both economies more on par with emerging economies than developed ones.
“Whether a high- or middle-income economy, the message is the same,” said Prof. Meir Pugatch, Managing Director at Pugatch Consilium. “In economies where policies affecting the biopharmaceutical environment present substantial challenges, local executives also rank these economies as having a lower ability to compete for investment from their companies. Nevertheless, in markets that have taken major steps to improve elements of the policy environment – such as Singapore and Israel, which have made significant strides in IP and regulatory standards in recent years – executives display much greater confidence, with these economies averaging at least 75% of the total possible BCI score.”
The study is available for download on Pugatch Consilium’s website here.
The Pharmaceutical Research and Manufacturers of America (PhRMA) represents the country’s leading innovative biopharmaceutical research and biotechnology companies, which are devoted to discovering and developing medicines that enable patients to live longer, healthier, and more productive lives. Since 2000, PhRMA member companies have invested more than $600 billion in the search for new treatments and cures, including an estimated $51.2 billion in 2014 alone.
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