It is a real pleasure to have you here with us today, and we look forward to sharing with you the thoughts of all of our eminent speakers on how innovation can and must be applied to our challenging and evolving world.
The subject of today’s conference is innovation. And what a fitting place to have a conference on innovation this is. The Royal Society’s motto ‘nullius in verba’ means ‘take nobody’s word for it’ – question everything. Questions lead to creativity then invention and then innovation.
The five innovation questions
Now I’d like to start the day by asking five questions:
What is innovation?
Where is innovation going next?
What is the industry’s role?
How do we square the circle of cost and affordability?
And how do we work with the NHS to ensure the most innovative and best medicines are made available quickly to all UK patients?
Before I answer these questions, let’s consider the wider context. We cannot consider our next steps until we understand those we have already taken. The industry has, to date, underpinned the success of modern healthcare. Our sole driver is to address unmet clinical need. That driver has produced incredible improvements in healthcare.
Over the course of the past 50 years alone we’ve seen:
the closure of TB hospitals
effective treatments for heart disease
almost total eradications of costly surgery in certain areas – such as ulcer disease
great strides in cancer care, and effective anti-psychotics which have enabled the rehabilitation of many people who have serious mental illness.
But, despite all this, despite all the millions of lives saved and improved. This industry is under appreciated and under-valued.
The ‘big pharma’ reputation
A BBC broadcaster – who is actually a friend of mine – called me ‘the chief apologist for industry’. My response to him was to ask “What do we have to apologise for?”
Without this industry the world would be a very different place. Modern healthcare for all would not have been possible. And day in, day out, I’m struck by just how hard people in our industry work, in every part of the chain, with a single-minded focus on fulfilling unmet medical need.
We have proven time and again that we are critical to the future of the healthcare ecosystem and all the problems it faces. Without our innovative capabilities and our underpinning of the system, the future burdens – such as economic austerity and an aging population – will be too great to bear.
Industry is part of the solution to these potentially crushing problems.
Now I realise I’ve talked for five minutes and haven’t answered any of my own questions. So, what is innovation?
Innovation is “the search for, and the discovery, experimentation, development, imitation, and adoption of new products, new process and new organisational set-ups.”
An important consideration here is that innovation means different things to different stakeholders.
What innovation means
We need to understand what innovation means to:
Let’s start with the most important group, patients. What do patients want? Well, ideally they don’t want to get ill in the first place. None of us do.
I was in Wales on Tuesday for the ABPI Welsh annual lecture, which this year was given by Lord Winston, and he – conveniently – explained this point very well: In the UK we have a National Health Service. We don’t have a National Sickness Service.
The intention is to keep people healthy, not just help them when they are sick. We want to prevent illness. As we have done with statins, HIV medicines and PPIs, to name but a few. However, we cannot always stop people getting ill. And when a patient does become ill, the last thing they want is to be ‘patient’ about the solutions. They want a responsive service. They want individual treatment and support. And they want understanding.
For a patient innovation means not going into hospital at all and in terms of their medication, they want minimal side effects, easy compliance and rapid access to the most effective available treatment.
What does innovation mean to the healthcare system?
As I mentioned earlier, the system is battling with austerity. This is a reality for all of us. Our industry is trying to help. Just last week one of our members announced that they will pay for gene tests for patients after colorectal cancer diagnosis. This alone could save the NHS £50 million per year.
The system must be able to treat more with less. And in my view the huge emphasis placed on primary care and healthcare reforms are a big part of this. But there are differences between how industry and the healthcare system view innovation. And it is vital that we have a shared understanding of what it means to all of those involved. The realignment of care and services from hospital to the community – that is innovation.
As an aside I also want to say that it has been incredibly rewarding for the industry to be involved in the Nicholson Innovation Review. The conversation has been open and at times candid but it is clear to all of us how important a role innovation will play going forward.
So what does innovation mean to the healthcare professional?
Innovation should create more time with – and listening to – their patients. It means less testing, more patient focus – more personal. Medicines that work first time and minimal side effects. And cost effectiveness is becoming a concern among healthcare professionals now too.
Characterising innovation in pharmaceuticals
But before we look at industry, let me reiterate how important innovation is to patients, healthcare professionals and the system:
health gains – such as the ability to treat new diseases
patient and carer convenience
other societal gain – such as the economic benefit and cost saving elements.
So now to industry – what does innovation mean to us?
Innovation is dictated by science and the process of innovation is incredibly expensive.
The cost of innovation
It costs over £1 billion to develop a medicine. And by its nature, it is an incredibly slow, difficult and complex process. But this is unavoidable because whatever we do, we must put safety before all other considerations. Biopharmaceutical innovation is also – usually – iterative. With each discovery building on the last, remember even research failures are part of the innovation process.
As former President of the Royal Society Sir Isaac Newton said:
“If I have seen further, it is by standing on the shoulders of giants.”
Innovation in medicine is no different – we build upon the work of our predecessors. And indeed, the very nature of clinical trials is to compare the potential medicine with the available one, and the tracking of Real World data will make this even more effective in future.
Another relevant point regarding innovative medicine the ‘Me-too’ issue. Innovative new medicines are commonly referred to as either ‘breakthrough’ or ‘Me-too’, where a ‘Me-too’ – or incremental innovation – is defined as a follow-on medicine that is similar, but not identical to, the first to market.
There are a number of myths surrounding ‘Me-toos’:
Me-toos and iterative innovation provide little value.
We have unnecessary multiple versions of medicines because companies copy proven success.
Drug research and development is predictable and programmable.
Only breakthrough, not iterative innovation is useful.
But these are myths; the reality is very different:
Competition in research and development is desirable as are therapeutic alternatives.
Each drug in a class has a different purpose.
The healthcare professional needs choice and alternatives.
And ‘Me-toos’ bring price competition.
It is also worth remembering too that biopharmaceutical innovation increasingly results in combination therapies. As with the recent advances in colorectal cancer and HIV, the most difficult diseases often require combination therapies – ‘combinations of innovation’. This is patient focused and personalised.
The next question is where is innovation going next? Where is the science taking us?
Fundamentally science is taking us to personalised and stratified medicines. We already have examples in the system. So, how do we do we afford innovation? How do we square the circle of cost and affordability?
As I mentioned before, innovation is an expensive and risky process and it is industry and its investors that carries these risks. And yes, profit is a reward for that risk. And it is the fuel that runs the research and development motor.
So, is it affordable? I want to start by saying that we cannot afford not to innovate. But then, innovation is the foundation of my industry, so I would say that to reiterate a point I made earlier the effective and successful use of medicines frees up money and resources in the system.
The effective use of medicines can free cash in secondary care and demonstrate broader societal value. We have to consider value, not price. Remember that innovation can change everything.
Let’s look at the internet for example. The internet creates ripples of benefit that could not be predicted. It has revolutionised the world. It was another Fellow of the Royal Society – Tim Berners-Lee – who gave us the internet – but he didn’t charge for it. Let’s say he had done – how much could he rightfully have charged? It is impossible to quantify. With hindsight we can see that its value is immeasurable.
The same is true of pharmaceutical innovation. The wider impacts of an innovative new medicine can be huge. And it is impossible to discern the true value of a medicine at product launch. The point I’m making here is that we only have a short time to recover our investments, but the healthcare system continues to benefit from medical innovation long after the medicine’s patent has expired – look at Tamoxifen, where the innovations – and the benefits – continued long after patent expiry.
And did you know that between 2009 and 2015 alone the NHS will save over £3 billion due to pharmaceutical products coming off patent? But of course, at the ABPI we are fortunate that we only represent the innovative industry. We are fighting at the forefront of science and the value chain.
On the theme of affordability, I was recently struck by the criticism of a number of new cancer medicines and the resistance to using them due to their cost. Cancer remains the most serious health concern in the western world. It was 40 years ago that Nixon started his war on cancer. And although we have won many battles, the war is still far from over. If we do not use the cancer medicines we have then we are letting down today’s patients and the patients of the future.
We cannot understand how medicines work in patients if they are not prescribed. Now, let’s look at the hardest issue we confront, price. How do we ensure fair price for the innovation, while maximising patient access and maximising the opportunity to remove costs elsewhere in the system?
The Government and the industry are currently wrestling – some would say with each other – with the difficult issue of pricing.
As many of you will know, the current Pharmaceutical Price Regulation Scheme (PPRS) system caps profits and many of you will have heard about the introduction of a parallel system in 2014 called value-based pricing.
Rather than dwell on this, as I’m sure it is more interesting to me than it is to those of you who aren’t in the industry, I simply want to say the industry does require incentive in pricing access to continue to drive research and development. And to make the UK a favourable location for investment.
The innovative industry in the UK
We do need to encourage this investment – as you will see from the slide behind me, the industry is critical to the UK economy.
So, innovation means different things to different people. Medical innovation is becoming more personalised. And critically, innovation is expensive, but it is affordable because the alternatives are not just look at Alzheimer's. If we are unable to develop a treatment for Alzheimer's, our healthcare system will implode under the additional burden.
So how do we bring all this together? How do we work with the NHS to ensure the most innovative and effective medicines are made available to patients as quickly as possible? Partnerships.
Partnerships offer a win, win, win situation. Patients win. The healthcare system wins. And industry wins. But these wins are only possible if we work collaboratively with common and shared goals and mutual trust.
One thing that sits in the way of trust is reputation. This sits on both sides. The industry is seen by healthcare professionals as being over aggressive and at times unethical. And the industry sometimes sees NHS as slow, ponderous, resistant to innovation and driven by special interests. But I would say that in the modern world, neither of these reputations are deserved. They are based on myth, not the reality.
On my return to the industry after eight years out I was struck by just how collaborative the industry and the NHS has become. This is epitomised by the Nicholson Review, the joint working frameworks and of course, true partnerships are key to the tracking and sharing of Real World data. We are moving toward a time of stratified and personal medicines. We will not just treat the disease – we will treat the individual.
Of course, as with all relationships in healthcare provision, there needs to be tight governance and a strong ethical framework. And the ABPI has made great strides in this area.
So to conclude, innovation is key to the survival of our healthcare system and its practitioners – our industry, our economy and most importantly it is key to fulfilling the unmet medical need of the future.
Finally, I would like us to remember that innovation is a journey, not a destination. Innovation is a shared process for new medicines to work effectively the healthcare system has to respond appropriately. This can only be done through effective and collaborative partnerships.
And of course, one of the strongest partners in the NHS is Mike Farrar, whose work in the NHS has dramatically demonstrated the value of leadership in delivering change and his reinvigoration of the NHS Confederation is already apparent.
So, thank you everyone and over to you Mike.