Biotech industry welcomes EU's "Innovation Union"
This article was originally published in SRA
The biotech industry has welcomed the European Commission's announcement of plans to establish an "Innovation Union" in the EU by 2020 that will focus on areas such as health, the ageing population and climate change1.
Biotech industry executives said that the move, which among other things will help to improve innovative companies' access to finance and remove barriers to new products reaching the market, was a positive step forward that should help to foster the growth of key innovative sectors. But at least one executive felt that there could have been more of a focus on the specific needs of small and medium sized biotech firms.
The Innovation Union is a key component of the "Europe 2020" target of increasing R&D investment to 3% of GDP. The commission says this could create 3.7 million new jobs and push annual GDP up to €795 billion by 2025.
Led by Maire Geoghegan-Quinn, commissioner for research, innovation and science, and commission vice-president Antonio Tajani, responsible for industry and entrepreneurship, the Innovation Union is intended to address structural problems such as under-investment in the knowledge economy, fragmentation and duplication of research, and poor access to finance. The commission also hopes that putting more public funding into innovation will help to attract matching investments from the private sector.
Building on moves that have been under discussion for some time, the initiative proposes a holistic approach to strengthening the EU innovation base, encompassing investment in education and innovation, improving intra-EU researcher mobility, simplifying access to funding and to EU research programmes, nurturing fast-growing small and medium-sized enterprises, and enhancing co-operation among science and business.
Finance and mobility
Gaining access to finance is a key part of the initiative. The commission says it will propose a cross-border venture capital regime to allow the freer movement of finance, take steps to strengthen cross-border matching of investors and innovative firms, and work with the European Investment Bank to scale up EU schemes like the risk-sharing finance facility.
It will also propose measures to complete the European Research Area, as required under the Lisbon Treaty, by 2014. This means more coherence among national and European research policies, removing obstacles to the mobility of researchers, and maximising open access to the results of publicly funded research.
In a move that could have implications for the funding of newly approved drugs, governments will be called upon to set aside dedicated budgets for the public procurement of innovative products and services, which is expected to create a procurement market "worth at least €10 billion a year", the commission says.
One part of the initiative that will be of particular interest to the biotech industry is the proposal for "European Innovation Partnerships" aimed at bringing together stakeholders in the public and private sectors to step up R&D and co-ordinate investment. The first of these partnerships will involve "active and health ageing" and will be launched by early 2011.
Linked in with the whole enterprise are plans to modernise Europe's intellectual property regime, including the proposed single EU patent (see below), as well as plans for what the commission calls a "European knowledge market for patents and licensing" that will be put forward before the end of 2011. This knowledge market would include matching supply to demand and promoting ideas for "breathing new life into neglected intellectual property, such as patent pools and innovation brokering".
Industry reaction
EuropaBio, representing biotech firms in Europe, said it welcomed the commission's moves to tackle internal market fragmentation and improve access to finance for small firms. "Europe also needs supportive and coherent policies that foster the growth of key innovative sectors such as biotechnology and that allow us to take the lead on the international scene," said EuropaBio chair Andrea Rappagliosi.
Emmanuel Chantelot, executive director of the EBE, which represents small biotech firms within the European industry federation EFPIA, also welcomed the move, saying that it was "very positive" and that commissioner Geoghegan-Quinn should be given credit for putting the initiative together.
However, Mr Chantelot had a few caveats. While he said the first "innovation partnership" on healthy ageing would be of interest to both the EBE and EFPIA companies, he added it was not clear exactly how the partnership would be implemented in practice2. "A lot will depend on the detail and on whether it really gets policymakers and the private sector to work together," he said.
He would also have liked to see a closer focus on improving access to finance for small biotechnology firms, whereas the commission appears to be trying to satisfy all kinds of SMEs. "For two years we have been making the point that biotech SMEs have a specific business model and need a great deal of finance, although such investments are risky and here I see no mention of biotech SMEs."
Patent issues
As for the EU patent, Mr Chantelot said both the EBE and EFPIA strongly supported the idea, which the commission believes could save business some €250 million a year by reducing the costs of filing and litigating patents.
However, the patent, part of a wider proposal for an EU patent court, is mired in disagreements among the member states over translation issues, an issue that the commission tried to address earlier this year with a draft Regulation on translations3. Moreover, an opinion is awaited later this year from the Court of Justice of the European Union, whose advocates general recently said that the proposal is not compatible with the EU treaties4.
Ministers have been holding behind-the-scenes talks in an effort to break the translations deadlock and on October 11th, meeting as the EU Competitiveness Council, they will discuss the draft translation regulation.
There is a great deal of political pressure on ministers to come to an agreement. During his presentation of the Innovation Union on 6 October, Mr Tajani called on the council to back the commission's proposals for breaking the patent deadlock. And the commission said in a 6 October communication on the Innovation Union that "as an immediate step, agreement should be reached on the EU patent before the end of the year".
On 12 October, the council will look at the Innovation Union proposals from both the industry and researcher perspectives. The subject will also be the centrepiece of the European Council to be held on 16-17 December.
References
1. European Commission announcement on Innovation Union, 6 October 2010, http://ec.europa.eu/research/innovation-union/index_en.cfm?pg=press
2. Personal communication, 7 October 2010
3. Commission proposal opens the way to a single EU patent, Regulatory Affairs Pharma online, 5 July 2010
4. EU advocate general deals heavy blow to European patent plans, Regulatory Affairs Pharma online, 25 August 2010