PUSHING AND PULLING
Most stakeholders in the Danish and Swedish life-sciences industry praise the outcome of concerted efforts to set up the right
pull-factors for innovation—the framework to enable pharmaceutical research to flourish. Finding consensus over the push-factors—government's
willingness to pay for new innovative products to be used by the healthcare system—is much more challenging.
Stepping out of the shadow, technically speaking
In Sweden Government spending on academic research has increased significantly even throughout the economic crisis, and in
October 2012, the government put forward its Research and Innovation bill, under which USD 600 million will be spent between
2013-2016 to boost Swedish research capabilities. One of the bill's six focus areas is the life sciences industry.
At the same time, Sweden may soon link its existing value-based pricing system with international reference pricing to cut
drug expenditures. The pharmaceutical industry warns this change would have an adverse effect on both the attractiveness of
Sweden as a market and as a location for R&D activities.
One for All, All for One
"The focus is solely on the push-part of the business," said Anders Blanck, director-general of Swedish pharma industry association
LiF. "The government wants to build the infrastructure for a well-functioning life-science sector in Sweden, but does not
want to talk about markets, about using new products and paying for them."
This is especially surprising for a country with GDP far exceeding EU average. "Even though the Nordic region is better off
than the south of Europe," IPSEN's Tommy Söderman, said, "it has still been tough for the pharmaceutical industry, especially
in terms of pricing for products that have been around for a number of years."
In some respects the Nordics even lag behind European peers. "In terms of market uptake and penetration, it takes a lot longer
compared to other European countries to get market acceptance for innovative products," Krumins of Boehringer Ingelheim said,
speaking of Sweden. "It is much tougher now than it used to be, because of the many stakeholders at national but also regional
and local levels. Whilst we can have products authorized and reimbursed, they might not be used by the healthcare system at
the regional level or local level."
Tommy Söderman, General Manager Nordics, IPSEN
Tom Rönnlund, General Manager Nordic & Baltic Region for IMS, agrees that the industry faces serious challenges. "Austerity
measures and efforts to reign in expenditures on pharmaceuticals are coupled to a longer-term trend of changing rules for
the way in which pharmaceutical companies are expected to interact with the healthcare system. This concerns rules for meeting
and interacting with care providers, how companies are able to arrange different kinds of activities for GPs, etc in the Nordics."
Tom Rönnlund, General Manager Nordic & Baltic Region, IMS
But this increased scrutiny also offers an opportunity to the international industry. "The change process, especially regarding
the evolving business models, has been going on in the Nordics for a little bit longer than in other markets," Rönnlund said.
"That allows the industry to be slightly ahead of the game. Many companies have also used the Nordic markets for piloting
innovative approaches to act in the best possible way in this environment."
Part of the key to success is realizing that traditional sales models no longer work. "The times are over that you have a
detailed aid and sell something—that does not fly anymore," said Markku Santonen, general manager Nordic & Baltic, Amgen.
"You need to understand the medicine and the value the medicine can add to a certain group of patients."
TOP 10 COMPANIES IN THE NORDICS BY REVENUE
Amgen adapted its organization and tactics in the region to meet the new environment. "It used to be more about demand generation;
this is no longer the case in Scandinavia. We need to combine the market access, health economics, and the commercial part.
It is not easy, but it is the way in which the Nordics as a group are moving," Santonen concluded.
Markku Santonen, General Manager Nordic & Baltic, Amgen
Is the 'Nordic model' really the key explanation behind the remarkable success of the Danish and Swedish life sciences industry?
In Denmark, cooperation between government and industry is praised by both sides, and it is safe to say that it supported
the industry's focus on the long-term and on niche areas such as diabetes, CNS or allergy.
In Sweden, the situation is more complex. Although the government has set up a solid framework for innovation to thrive and
to support the life sciences industry, satisfactory cooperation often seems to be lacking.
Morten Nielsen, CEO, NNE Pharmaplan
"There are good initiatives in Sweden," said Rönnlund. "But they sometimes feel a little bit like a late wake-up call. Only
when AstraZeneca shut down a big chuck of its research operations in Sweden the government hurried to drum up plans and policies
around innovation. The Danish government and their ambitions, working together with the pharmaceutical industry association
and other players, are slightly more concrete."
But the Nordic model is first and foremost cross-country partnerships like the Medicon Valley Alliance which facilitate the
convergence of technologies, clever networking and the consolidation of niches in which the Nordics display a strong heritage.
"That is the process we are in now—building up beacons, or areas with one shared headline in which we combine different strongholds
and disciplines," Jørgensen concludes. As the Swedish band ABBA would probably say, take a chance on the Nordics.