The government is too focused on encouraging "breakthrough drugs" at the expense of significant gains for patients from incremental innovation in medicines, the Association of the British Pharmaceutical Industry (ABPI)'s chief executive, Stephen Whitehead, has warned.
This approach threatens the future of pharmaceutical medical research in the UK, he says, speaking shortly before the industry and government are set to begin the next round of drug pricing negotiations.
These discussions "will decide the future of pharmaceutical research in the UK. If we minimise the reward for innovation in the UK, then our manufacturers will go abroad. Our industry, our economy and our healthcare system will suffer - UK patients will suffer," says Mr Whitehead.
"The government wants to target resources at big breakthroughs, but the science shows us that developments in medicine are made in small steps," he points out.
"We have to make sure that we recognise and reward the investment that goes into creating innovative new medicines. Manufacturers take a £1 billion gamble when they decide to create a medicine in the UK, and they won't take that plunge if there is no reward for success. The UK is a global leader in medical research and development, but we have to do all we can to prolong and build on this success - we have ensure that the huge risks discoverers and developers take are rewarded," says Mr Whitehead.
A newly-published report, commissioned from the Office of Health Economics (OHE) by the ABPI, highlights the different types of medical innovation, and places these within the current context of increasing pressure on the pharmaceutical industry to justify itself as innovative. There is also growing reluctance on the part of payers in Europe to recognise and reward innovation "beyond a very limited definition of the term," it says.
The study which is entitled The Many Faces of Innovation, points out that innovation is an uncertain activity; outcomes can only be poorly predicted, if at all. Experience effects are important, and successive improvements derive significant economic benefit through experience processes.
Therefore, innovation is a cumulative activity where small steps building on what has gone before are important.
Moreover, because innovation has many dimensions, it is misleading to attempt to categorise the degree of a medicine's innovativeness as either a "breakthrough" or not, the study warns.
"One of the main problems that arise from using a binary classification is the pejorative sense that is then attached to the term 'incremental.' Innovation in pharmaceuticals should not be classified using this dichotomy, given its complexity and multi-dimensionality and the importance of cumulative steps to overall innovation," it says.
"A broad perspective needs to be taken when evaluating innovation in medicines; otherwise, we run the risk of ignoring some, or all, of the advantages of follow-on products," the study cautions.
