The pharmaceutical industry complains of structural deficits in…

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Written By Kampretz Bianca

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Berlin – The innovative strength of the German pharmaceutical industry suffers from structural deficits in financing start-ups translating research and development into new products. This was explained today by industry representatives at the Association of Research-Based Medicines Manufacturers’ Healthcare Industry Innovative Day (vfa) in Berlin.

Germany needs more innovation centers to better promote research, warned Eicke Latz, scientific director of the German Rheumatism Research Center (DRFZ). There are “good feeding mechanisms” for basic research in this country, but none for building companies.

“We are a third world country in this area,” Latz said. Translating research into business models works significantly better in other European countries, but especially in the USA.

There is a lack of venture capital investors and too much risk aversion among German investors. Furthermore, the framework conditions for allocating risk capital in this country are not attractive enough. Better depreciation options would have to be created and tax structures revised. “In fact, we should see how Switzerland does it and then do it even better,” he explained.

The result is that spin-offs with innovative products, especially in the biotechnology sector, would transform basic research in Germany into business models in the USA. For example, he himself has founded nine companies, all registered in the US state of Delaware and headquartered on the east or west coast.

He received approval from Fridtjof Traulsen, CEO of Boehringer Ingelheim Germany. In this country, for example, it is difficult to create funds to support companies in the biotechnology sector. Furthermore, market access takes too long: it would be too long before companies could actually make money from their innovations.

Another problem is that German federalism means that the structure of funding funds is too fragmented, explained Mario Brandenburg, Parliamentary State Secretary at the Federal Ministry of Education and Research (BMBF). In centralized countries like France there is greater concentration and therefore more direct access to sufficient financing.

After all, start-ups in the biotechnology sector are characterized by above-average success. At 73 percent, the survival rate of spin-offs is very high, especially compared to the digital sector.

Ten percent of all investments in research and development in Germany come from the pharmaceutical industry, with a total volume of 121.4 billion euros. There is also a positive trend in the facilities of companies such as Eli Lilly in Alzey, Rhineland-Palatinate. “This can be a starting point, but more is needed,” Brandenburg said.

The pharmaceutical industry is fulfilling its responsibility for location and the healthcare system, the president of the vfa, Han Steutel, had previously highlighted, in view of recent investments from companies such as Eli Lilly, Roche and Merck. “Even Minister Lauterbach knows the companies’ order by heart,” he said.

However, given growing geopolitical rivalries, more support is needed in Germany and Europe. “We are experiencing an increasingly rival industrial policy”, emphasized Steutel. This is no longer a “sporting competition”, but rather a race for industrial resources, sales markets and qualified workers.

China alone is injecting 1.6 billion US dollars in industrial support, in the USA it is 900 billion US dollars and in South Korea 700 billion US dollars. In the pharmaceutical sector, China has already registered as many patents as the USA and twice as many as Europe.

The fact that there is a need for action and investment is a perception shared equally in politics and business, explained Janina Mütze, general director of market research institute Civey.

According to a survey carried out on behalf of the VFA among policymakers and the private sector, they consider it by far the most important to bring production facilities back to Europe, followed by the creation of modern production networks and minimizing risks of suppliers. The fact that the respective values ​​of politics and the private sector are always close shows once again that there is not a problem of knowledge, but rather a problem of implementation, explained Mütze. © lau/aerzteblatt.de

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