Encouraging pharmaceutical innovation in middle-income countries
| Author | Tim Wilsdon - Eva Fiz |
| Position | Vice President - Consulting Associate, at Charles River Associates |
| Pages | 30-33 |
p. 30 2013 | 2
ENCOURAGING
PHARMACEUTICAL
I N NOVAT ION
in middle-income countries
By Tim Wilsdon, Vice Presid ent,
and Eva Fiz, Consulting Associ ate,
at Charles River Associates
With each newspaper rep ort on new investments in China or
Brazil (and research center c losures in Europe), the chang-
ing landscape of pharm aceutical research and d evelopment
(R&D) is becoming ever more evide nt. However, the factors
driving these changes, the importance of intellectual prop-
erty (IP) and the impl ications for government policy rem ain
subjects of contention and debate. To better understan d the
dynamics of innovation within the pharmaceutical industry,
the International Federation of Pha rmaceutical Manufacturers
and Associations (IFPMA) as ked economic consultancy r m
Charles River Asso ciates (CRA) to analyze the conditions that
enable pharmaceu tical innovation to thrive and the potential
future implications for innovation p olicies, with a specic focus
on a selection of key middle-income countries.
Drawing on interviews wi th policymakers, international an d
domestic companies, an d academics, CRA asse ssed the in-
novative activities in middle-i ncome countries and the degree
to which these activities ca n be associated with public pol icy
in a range of case study countri es (Brazil, Colombia, Chi na,
India, Malaysia, South Afri ca, the Republic of Korea and the
Russian Federation).
Although there is increas ing innovative activity in all countr ies
considered, the opportunity to develop innovative activities
from basic research through to clinical development varies
from country to countr y. To be successful, a jigsaw of policies
is needed, including a coo rdinated industrial and health policy,
strong IP protection and an environme nt that encourages
partnerships among the different stakeholders.
RECENT TRENDS
To understand recent trends and policy c hallenges, it is im-
portant to differentiate between types of biopharmaceutical
innovation. Innovative activity is t ypically divided into bas ic
research (sometimes described as drug discovery), preclinical
research and clinica l trials (which themselves a re divided into
Phases I to III (registration), and Phase IV (post-registration) tria ls).
Biopharmaceutical innovative activities are primarily con-
centrated in high-income countr ies; however, there is a clear
growth trend in these activities in middle-income countries.
Between 2005 and 2010, industry R&D spendi ng increased
by 455 percent in Asia-Pacic (excluding Japa n), 112 percent
in Latin America, and 3 03 percent in India.
Early-stage research is un dertaken by international ph arma-
ceutical companies working closely with leading academic
centers in research hubs. Hi storically, these have focused
on regions such as Boston and Sa n Francisco in the US and
London and Cambridge (UK), Uppsala (Sweden) and Munich
(Germany) in Europe, and Singapore in Asia. Among middle-
income countries, however, China stands out as the ho me of
12 R&D centers. A few R&D hubs are also established in In dia,
Brazil, the Russian Federation and Indonesia.
The trend towards biopharmaceutical innovative activities in
middle-income countr ies is even clearer when looking at later
stages of the R&D process. For exampl e, clinical research is
undertaken in many lo cations with middle-incom e countries
now hosting 15 percent of global clinical tri al activity. China,
India, the Russian Fede ration and Brazil have captured the
largest number of trials w ithin those markets.
Ultimately, the success of the innovation strategies of mid dle-
income countries should be judged on their outputs. Although
it is difcult to tie medici nes developed by the international
industry to a particu lar market, there is evidence of incremental
innovation, where medicines are ta ilored to the local markets in
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