Richard Bergström — Europe's Medicine Man

Oct 01, 2012

He is an incongruity in the staid corridors of Brussels pharma policy. Bronzed, athletic, and—whenever possible—without a necktie, he's personable, articulate, almost hyperactive—and always ready to offer a sharp-edged view.

Richard Bergström, the new man at the head of Europe's lead pharmaceutical industry association, is going to need all of these characteristics—and a lot more besides—if he is to succeed in coaxing a fragmented and deeply conservative sector to face up to the multiple challenges of the 21st century.

His job as director-general of the European Federation of Pharmaceutical Industries and Associations (EFPIA) isn't made any easier by the speed at which the world is changing around the pharma sector. He took over in early 2011, at a time of unprecedented financial turbulence for the industry, and for Europe. And things have only got worse since then.

Crisis-induced austerity programs in many European countries are biting cruelly into everyday pharmaceutical industry operations, often intensifying existing competitive tensions within the sector. An internal EFPIA document estimates that price cuts introduced in 2010 have lopped more than €5.5 billion off company sales in the region.

The longer-term threat of a collapse of Europe's social security schemes looms ever closer, in a perfect storm where an aging population drives massive demand for increasingly expensive healthcare against a background of rising unemployment and diminishing tax revenues.

Prising open the still-unexplored potential of new and more highly targeted medicine depends on overcoming the instinctive caution of regulatory authorities, while assuring investors chastened by the high costs and rates of attrition in top-end research that their money is well spent. There is also uncertainty about long-term commercial strategies. The big companies are frankly nervous about abandoning an established business model focused on blockbuster drugs for mass markets. Yet hopes of winning support for coherent industrial policies designed around more efficient deployment of technology in healthcare are repeatedly dampened by resistance from cash-strapped finance ministers with a short-term vision.

While this is difficult enough to address at the national level, it is all the harder to deal with in the complex environment of the 27-country European Union (EU), with constant uncertainty over just which politicians and bureaucrats are driving policy, and in what direction. An added headache is the shifting dynamics of a world business environment that is tilting rapidly towards emerging economies, in which Europe's long-standing prominence in the pharma sector appears increasingly fragile.

With shadows over the future of the EU currency now darkening the political sphere and prompting fears of a collapse to outright depression, putting the very integrity of the EU under unprecedented strain, the question arises: Is Bergström that fresh face who has been handed a poisoned chalice?

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