Investments in health research and development across Europe have stagnated since 2010, following decades of annual growth in spending, a new report warns.
In 2011 a total of €47 billion was invested in health R&D in the European Union, with 60% of that sum coming from the biopharmaceutical industry and 40% from member states and the European Commission, found the report commissioned by Janssen Pharmaceutica NV from Deloitte Health Economics group.
Biopharmaceutical companies across Europe put €29 billion into health R&D in 2011 (this does not include another €8 billion of investment by the medical devices industry).
According to the Deloitte/Janssen report, growth in private health-R&D has been slowing since the start of the global economic crisis in 200/8, although there were some signs of improvement in 2011.
Companies have faced “increased difficulties in marketing innovative products in the European markets, as well as reduced financial returns as a result of increasingly limiting reward mechanisms for innovative technologies”, the report says.
“At the same time, the price of most cost components driving total expenditure on health R&D has increased significantly over the last decade.”
Public investments
Public investments in health R&D were €18 billion, with the bulk of that figure provided through public R&D at national level.
There was a relatively small contribution at European level, most recently through the EU’s Seventh Framework Programme for Research and Technological Development (FP7).
These data included an absolute decline in public health-R&D investment for the first time in 2011, notes the Deloitte/Janssen report on Investing in European health R&D: A pathway to sustained innovation and stronger economies.
Government Budget Appropriations or Outlays on R&D (GBAORD) indicate that public health-R&D spending stagnated in 2010 and declined by 1% in 2011.
At country level, public investments in health R&D declined or stagnated in most European markets, the report adds.
They will be “further under pressure in the near future due to public budget deficits”, it warns.
“Investments at the European Union level account for only 2% of total public and private R&D and the current Horizon 2020 budget could lead to a stagnation in EU level funding for seven years.”
Worrying trends
These “worrying” trends come against the backdrop of an ageing population and a growing disease burden in Europe, Janssen points out.
According to the report, a large number of factors point to an unavoidable rise in healthcare expenditure of an estimated 5 percentage points to 12%-15% of Europe’s Gross Domestic Product by 2030, “even with policy interventions and/or budget caps that aim to counterbalance these pressures”.
The benefits of medical research “always outweigh the costs for society”, insisted Jane Griffiths, company group chairman, Janssen EMEA.
“The incredibly high risks of pharmaceutical innovation are only sustainable if the rewards are adequate and fair. Everybody benefits from this: the patient, society and the industry. We cannot afford not to innovate”.
Health Policy Centre
The company has also launched the Janssen Health Policy Centre, which will establish multi-stakeholder forums for “open” discussions with key groups in the debate over meeting the healthcare expectations of patients and society, such as public-health specialists, healthcare providers, caregivers, policy makers, health economists and patient advocacy groups.
A more detailed analysis of the Deloitte/Janssen report and the issues addressed in it will appear in PharmaTimes magazine.
