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Business and Markets

The Impact of Various Countries on Biopharma – Or Not

Here’s a report looking at biopharma by country, and ranking countries based on how good an environment they provide for the industry. The three big criteria are how much their governments spend on R&D, specifically life sciences and medical R&D, how closely they regulate pharmaceutical prices, and how strong their intellectual property protections are.

By these standards, the top countries that contribute to life sciences innovation rank as the US, Switzerland, Taiwan, Singapore, and Sweden. Those are all reasonable choices, but there are some surprisingly low rankings that are specifically addressed in the report. The UK, for example, comes in at #24, almost entirely because of its price controls, and Germany’s #12 finish is strongly influenced by that as well. (In case you’re wondering, the bottom countries are Australia, Phillipines, Thailand, South Africa and India. Price controls and lack of biologic data exclusivity account for some of those rankings, but government spending is in there, too.

I find this list interest, but clearly flawed. It’s been prepared from an economic perspective, and it’s worth seeing things that way, but it does completely miss scientific impact and several other factors. India, for example, would not be at the bottom of the list considering the country’s huge generic drug industry for the impact that it has globally. (That impact is not always what everyone hopes it is, when you take into account some of the scandals, but still). And having the UK outranked by Colombia is just silly. Colombia has (and I hope I’m not offending any readers there) very little worldwide impact on the life sciences at all, while the UK has a very large amount indeed. Its drug companies, its universities, and its other research institutions are often world-class, and it actually has a very large profile indeed. If you’re ranking countries by how they “impact global biopharma innovation”, something has gone wrong when the UK finishes 24th.

Similarly, it’s hard to see how Portugal comes in 6th, while Germany is 15th (and also lags Estonia and Mexico). All of these countries make real contributions, but if you walked up to anyone who works in any aspect of the biopharma business and asked them to rank those four countries in terms of global impact, I feel certain that Germany would be the unanimous first choice. I understand that the Information Technology and Innovation Foundation was probably trying to come up with just these sorts of provocative comparisons, but they’re provocative enough to damage the credibility of the entire effort.


18 comments on “The Impact of Various Countries on Biopharma – Or Not”

  1. Hap says:

    The rankings are all about what benefits pharma companies (whether they can get the prices they want for what they make, and how much money the governments give the industry, roughly) but unless those rankings correlate to something that matters to the countries, there’s not much reason why they should care. I wonder if pharma companies would actually care about those rankings, either – would they site research in Portugal over the UK on that basis, for example?

  2. Anon says:

    UK is behind Greece, Colombia, Mexico, Estonia, etc, etc?

    Clearly somebody has just discovered the capabilities of Big Data.

    1. Anon says:

      … as a substitute for thinking.

      1. Phil says:

        Anyone who thinks you can turn your brain off and let “big data” solve all your problems is an idiot. I don’t think the authors of this study fall into that category. Studies like these are valuable for provoking questions, not providing answers.

        The hypothesis is reasonable (science funding + favorable pricing environment + strong IP protection = good for pharma). It was tested, and the data don’t bear it out. So, the model is wrong. Guess what, all models are wrong!

        So, what’s missing? Why has Germany been successful despite scoring lower for these factors that a reasonable person would expect should matter? Or would German companies have been more successful if they were located in Estonia?

        VC has been mentioned in comments below, that probably needs to be added to the equation. But again, even with that added, it’s not going to be perfect. To continue to paraphrase George E. P. Box, the practical question is will it be useful?

        1. Phil says:

          This is what I get for replying before opening the link.

          The authors of this study may actually fall into the “let’s turn our brains off and see what the data tell us because there couldn’t be any flaws in our model” category. They take this list and declare victory, that is a disgrace. And I get the feeling it’s to further an agenda on top of that. Even worse than turning your brain off is deciding you know the answer ahead of time.

          Still, I think an unbiased treatment of the same data could be useful.

          1. Vader says:

            I think the point of Big Data is to give respectability to turning out papers that are unencumbered by the thought process.

          2. Phil says:

            Like any tool, Big Data can be used correctly or incorrectly. Like most tools, it is used incorrectly more often than correctly.

  3. Anon says:

    Why does restricting drug prices in line with their actual benefits hurt innovation? Perhaps innovation should be about delivering more with less, not charging more for less!

  4. CMCguy says:

    Canada which used to be much stronger but has suffered much from consolidation and layoff ranks 27 which does seem low but as mentioned with many of the other unexpected ones has “Price Controls” that weighs it down. Indirectly I would also project the “Regulatory Agencies” of most countries do influence the ranking where in some places there are tougher hurdles to deal with and even though FDA might actually be over burdensome at times they generally provide a good environment for biopharma.

  5. Curious Wavefunction says:

    “how much their governments spend on R&D”

    No mention of VC funding? I would think that’s what really distinguished the U.S.

    1. Thomas says:

      Nonono…. it is about the government adding to the VC money, for the VC to be taken. I suppose.

  6. watcher says:

    Does not seem the country of origin should really matter since every biotech’s products, if from Boznia or S. Korea or China or England, would be working toward approval in the US to get free market pricing and no need for applying to get approval for government pharmaceutical lists. The key is getting funding for the biotech, from the government like NIH or DOD in the US or VCs or your rich aunt and uncle. This is where the US excels….throwing money at good and bad ideas alike!

  7. Bernard Munos says:

    Having Taiwan, Portugal, Estonia, Slovenia, Iceland and Mexico in the top 12, and well ahead of Germany, the UK, Canada, and Japan seem to demonstrate the opposite of what perhaps the authors intended. That is the three criteria used for the ranking (how much governments spend on life sciences and medical R&D; how much they regulate drug prices, and how strong IP is) don’t seem to be that critical in fostering a world-class drug industry.

  8. myma says:

    I don’t really understand the purpose of that report. It seems to be “governments spend the most here, therefore it is better.”

  9. Morten G says:

    Mostly this list seems to tell you in what countries you are more likely to turn a profit on your pharma product. It might be more useful if they took out the stuff about government spending on R&D. Even though I don’t like that they put price controls into three bins rather than some numerical estimate.

  10. E.T. says:

    The rankings are dubious at best but the raw data is interesting and can be surely analyzed in better ways.

  11. Kaleberg says:

    This reminds me of those reports back in the 1960s arguing that Pakistan was going to be the next great business center in the region, and India was going to be left in the dust. There’s still plenty of dust, but Pakistan has yet to break out as predicted based on the ideological biases of the time.

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