AIFA European Conference on Clinical Research for Decision Making

Sergio Dompé - Farmindustria

Rome, March 30th, 2007

Access to market by new medicines and pricing criteria

The discovery of new medicines

Higher investments, lower "productivity", and higher rates of failure.

Increased costs of clinical and general research to make new active ingredients available.

Considerable medical progress: the focus is now on more complex areas and Research requires time

Re-launch innovation is important. Pursuing projects and making the products accessible in Italy and in Europe is equally important.

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Specific new challenges facing researchIncrease in innovative -medicine research costs (up to € 1 billion)

Heightened complexity levels of R&D projects

Higher degree of specialisation and division of innovative work on a worldwide scale

The challenge is represented by the greater need for health. The tools to deal with it:

greater commitment by the Companies, the development of new technologies and synergies for the life sciences, the creation of a network of skills, dialogue and cooperation with the institutions for a win-win strategy

Source: ATA

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R&D agreementAssegnee (n° per patent)

BiologyMedicine

ChemistryPhysics

Engineering

BasicResearch

Clinical Research

AppliedResearch

Innovative technology

New medicines

New opportunities for interdisciplinary Research

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BIOLOGICALSRNAi

Genic therapyPharmacogenic-SNP

REWARD INNOVATIONHigher Research costs

Rewarding/incentivizing measuresAd-hoc legislation

INNOVATIONNew cutting-edge technologies

Interdisciplinary Research Competitiveness

Spill-over into other sectors

SOCIO-ECONOMIC IMPACTless hospitalisation (=savings)creating highly-qualified jobs

higher turnover and tax revenuegreater R&D investments generation of R&D clustersPrivate-Public Partnerships

The virtuous Research cycle

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Source: ATA

Highly interconnectednetwork

Strong presenceof the private sectorin the clusterin the coming years

OPPORTUNITIES

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2006

Milan: an example of a cluster of excellence in scientific Research

Source: ATA

The value of innovation includes

- Pharmacological and technological innovation

- greater efficacy and tolerability

- greater conformity to treatment

- better life quality

Breakthrough Innovation

Incremental Innovation

Apart from breakthroughs, innovation should be considered

a continuous and multi-dimensional process (not duplication but

evolution), an often cumulative development of many different

actions and incremental improvements, including small incremental steps

Innovation is not an absolute value(“black or white”, “it is or it isn't”)

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How many values for innovation

Therapeutic and clinical value

Quality of life

Social value

Innovation

Effective medicines for diseases not adequately treated or which, in terms of the therapeutic index, improve available treatments.

Clinical advantages, such as side effects reduction, higher efficacy vis à vis existing treatments, better compliance.

This means public health, measured in terms of economic benefits,

such as medicines that can guarantee improvements for society (e.g. avoiding

surgery, reducing hospitalization, slowing down the degenerative process of diseases)

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Incentives to generate innovation with social value

"Rewarding" reimbursement mechanisms:

• time to market

• price determination

• tax system and R&D incentives

A stable legislative and regulatory framework, at a national and community level, to allow faster access to innovationand the recognition of its added value.

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A pricing system to give leverage toResearch and Innovation

Multi-year agreement, that quantifies the commitment of companies, according to investments in preclinical and clinical research, production and exports, as well as the therapeutic value and growth in the portfolio of reimbursable products.

For innovative products prices, reimbursement and access times comparable with those of the main European countries

To enhance Research

While the reference price

should be avoided, as it penalises the patients, limits the physician's choice, only creates short-term savings, refers only to the commercial aspect of medicines and belittles their industrial and research aspects

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Tax system and research incentives

In the pharmaceutical sector, research is funded for more than 90% by companies (through their profits).

In Italy profitability is squeezed by price cuts, high costs and the differential taxation applied to the industry

The tax credit provided for by the Finance Act is a first positive signal important but still not sufficient to bridge the gap with other countries

It is necessary to work towards a competitive re-equilibrium of the industry in Italy

Reinforcing tax relief on R&D investments either private or those made to comply with public sector commissions (for which a 50% rate can be expected)

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Innovation must be placed at the centre

Innovation cannot ignore the European context in terms of price, reimbursement and access times.

The commitment of all the actors in the Innovation System must go in the same direction and the state’s medicine policy must constantly provide incentives for companies that invest, in order not to nullify the efforts made (and waste resources).

Innovation must be given leverage, and correct recognition and it should be able to count upon adequate resources. Its evaluation cannot be based on its financial compatibility with the Health System, that is, exclusively in terms of budgetary constraints and without a cost/benefit approach.

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