Strategy for healthcare industry by Bundesverband der Deutschen Industrie e.V.

POSITION | HEALTHCARE | STRATEGY

Strategy for healthcare industry Anchor in times of crisis and driver of future growth

1.March März 2021

Healthcare industry as a key industry The healthcare industry has been a key industry in the German economy for many years. The label “Made in Germany” means proven quality worldwide for diagnostics, medical products, pharmaceuticals, biotechnology and information and communication technology (ICT). Healthcare industry is internationally competitive and has long been making a positive contribution to the German trade balance. Recent months have shown how rapidly the theme of health can become the absolute focal point of our political and economic action. Healthcare industry is in a position unmatched by any other industry to chart a route for Germany out of the economic crisis. As a crucial driver of growth and engine for jobs, it is the key industry of the 21st century: with its offer of stability, it is critical for the success of Germany as a business location. It is now essential to create framework conditions which durably enhance the innovative strength of healthcare industry and enable it to play this role to the full. Hence, the health sector must be accorded the priority which corresponds to the de facto significance of this industrial sector. Whereas the value of progress in other sectors in Germany is also discussed in terms of economic and societal policy, this important discussion is only just beginning in the health sector. The understanding of health as a “cost driver” in welfare provision is outdated: rather, these costs must be regarded as investments in our health and accordingly not only an added value for individual wellbeing but also as the backbone of a stable economy and our social harmony. This change of perception is necessary in order for investments in health to continue to be made in Germany into the future, and not only against the background of increasingly fierce international competition on global markets outside Germany and Europe. A public and open assessment which is clearly flanked by concrete measures is indispensable so that healthcare industry can continue to develop its full innovative strength in Germany and in Europe. It is of decisive importance that European innovative strength and existing added value chains are protected and promoted. Because a stable economy and functioning healthcare also require an intact healthcare industry.

Michaela Hempel | Health Industry | T: +49 30 2028-1493 | m.hempel@bdi.eu | www.bdi.eu

Strategy for healthcare industry

List of contents Healthcare industry as a key industry .............................................................................................. 1 Status quo and vision of healthcare industry .................................................................................. 3 Healthcare industry in figures (situation in 2019) .................................................................................. 3 Status quo ............................................................................................................................................. 4 Vision ..................................................................................................................................................... 7 Analysis of locational factors .......................................................................................................... 12 Security of supply ............................................................................................................................. 13 Supply chains and production conditions ............................................................................................ 13 Market access and reimbursement ..................................................................................................... 18 EU in-vitro diagnostics regulation (IVDR) ............................................................................................ 23 Global health ....................................................................................................................................... 25 Research and innovation .................................................................................................................. 29 Clinical research .................................................................................................................................. 30 The system’s openness to innovation ................................................................................................. 33 Innovation promotion ........................................................................................................................... 37 Access to the capital market ............................................................................................................... 41 Cooperation in the area of research and development ....................................................................... 43 Protection of intellectual property ........................................................................................................ 49 Digitisation of healthcare sector ..................................................................................................... 52 Degree of digitisation ........................................................................................................................... 52 Use of health data ............................................................................................................................... 55 European health data space ............................................................................................................... 59 Ecological and economic framework conditions........................................................................... 60 Economic policy climate ...................................................................................................................... 60 Trade agreements ............................................................................................................................... 63 Level of taxes and expenditures ......................................................................................................... 65 Workers ............................................................................................................................................... 67 Energy costs ........................................................................................................................................ 69 Approval procedures ........................................................................................................................... 71 Ecological and economic sustainability ............................................................................................... 73 Conclusion ......................................................................................................................................... 74 Imprint ................................................................................................................................................ 76

Strategy for healthcare industry

Status quo and vision of healthcare industry Healthcare industry in figures (situation in 2019) Gross added value in 2019: 81.2 billion Euro Around one Euro in five of gross added value in the wider health sector is generated in healthcare industry In addition, gross added value of 53.8 billion Euro is created by demand for goods and services along supply chains in Germany

4.1% growth (reference period: 2007 to 2018) as compared with 3.3% growth in the wider economy

Around 1 million employees This makes healthcare industry one of the largest employers in Germany 210,000 new jobs since 2010 One job in healthcare industry is linked to one further employment relationship in the wider economy 55,000 employees in R&D (5.3% of all healthcare industry employees) Direct employment of two people in healthcare industry R&D underpins around three jobs in the wider economy By comparison: mechanical engineering 50,202 / electrical-electronics industry 23,849 15% R&D intensity1 Exceeds the “Europe 2020 strategy” objective of 3% of EU GDP for R&D by a factor of five By comparison: mechanical engineering 6.9% / electrical-electronics industry 6.0% At 48.4 billion Euro, the export volume of healthcare industry has increased by a factor of 1.7 times since 2010 More than 90% of the health sector’s exports are accounted for by healthcare industry 7.5% share of healthcare industry exports in the wider economy in Germany Sources: ▪ Federal Ministry for Economic Affairs and Energy (BMWi) (2020): Gesundheitswirtschaft – Fakten & Zahlen. Ergebnisse der Gesundheitswirtschaftlichen Gesamtrechnung, Ausgabe 2019. ▪ WifOR Institute: Bedeutung von Forschungs- & Entwicklungsinvestitionen der industriellen Gesundheitswirtschaft, Analyse des F&E-Fußabdrucks der industriellen Gesundheitswirtschaft im Auftrag des Bundesverbands der Deutschen Industrie e.V. (BDI), November 2020.

Definition of R&D intensity: describes research expenditure as a share of the sector’s gross added value. The greater the R&D intensity, the stronger the focus of the sector on securing its innovation capacity. 1

Strategy for healthcare industry

Status quo Four strengths of the healthcare industry

Underpinning the wider healthcare value creation chain

Improving the health of the population

Engine of growth and jobs

Driver of innovation

In light of its gross added value and job figures, the healthcare industry is unambiguously one of the largest German economic sectors. Around 14,380 medical technology firms 2, 670 biotechnology3 and 360 pharmaceutical businesses4 in Germany employ more than one million people and therefore now provide more jobs than any other industrial sector in Germany. Furthermore, in recent years undertakings in the healthcare industry have made a strong and regular contribution to Germany’s economy with investments measured in billions of Euros. Healthcare industry is a driving force in the German economy German healthcare industry undertakings are a driving force for research and production worldwide. They research, develop and produce global export successes in Germany such as pharmaceuticals, medical technology, diagnostic, biotechnology, disinfectant agents and information and communication technology for the world market. 7.5% of all exports are accounted for by the healthcare industry5. Yet good economic performances can only be achieved with innovative products which sustainably enable health and an independent life. Continuously high investments in research and development are necessary in order for quality of human life and life expectancy to increase further. Research expenditure is a fundamental precondition for a stable economy as well as for healthy growth. Investments in research and development by the healthcare industry are higher than in most other industrial sectors (see Figure 1).

Including 1,380 undertakings with more than 20 employees and around 13,000 microenterprises with fewer than 20 workers, <https://www.bvmed.de/de/branche/standort-deutschland/zusammenfassung-der-ergebnisse-der-bvmed-herbstumfrage2020>. 3 Ernst & Young: Deutscher Biotechnologie-Report 2020, Good Translational Practice - Welche Hebel senken das Risiko im Innovationsprozess? April 2020, <https://assets.ey.com/content/dam/ey-sites/ey-com/de_de/news/2020/04/ey-deutscherbiotech-report-2020.pdf>. 4 Statista – Anzahl der Unternehmen in der deutschen Pharmaindustrie in den Jahren 2009 bis 2019: <https://de.statista.com/statistik/daten/studie/255419/umfrage/anzahl-der-unternehmen-in-der-deutschen-pharmaindustrie/>. 5 Federal Ministry for Economic Affairs and Energy (BMWi) (2020): Gesundheitswirtschaft – Fakten & Zahlen. Ergebnisse der Gesundheitswirtschaftlichen Gesamtrechnung, Ausgabe 2019.

Strategy for healthcare industry

Figure 1: Healthcare industry R&D intensity on a sectoral comparison 6 A further important factor is the high quality and production excellence of German health products and the associated standing abroad. While other sectors of German industry enjoy high visibility and political support, the special importance of health exports “Made in Germany” does not receive adequate attention. The healthcare industry in Germany is characterised by the fact that the businesses it comprises currently maintain all stages of the value creation chain, from research and development through to production and distribution. A high degree of communicated and perceptible political – and societal – support is needed for the added value of the healthcare industry in Germany in order to retain all components of the sector and hence the entire added value in Germany into the future. What is missing today is a clear acknowledgement by German policy-makers of the key role played by the healthcare industry, for example as can be seen in the case of the shipbuilding industry with a Federal Government coordinator for the maritime industry or a coordinator for the aeronautical sector. The Federal Government recently wasted an important opportunity to take this significant sector into account in its Industrial Strategy 2030. For the Federation of German Industries (BDI), clear objectives and related measures are urgently needed in the Federal Government’s Industrial Strategy so that the healthcare industry continues to be a factor of stability for the German economy also in 2030, as well as an engine of progress and driver of added value. Dependable partner in the corona crisis Not only German but also European policymakers have hitherto been inclined to treat the healthcare industry as being of secondary importance, even though it has proved to be a dependable partner in the corona crisis. The health industry is still insufficiently recognised as a player whose framework conditions need to be strengthened so that it can keep up with developments and hold its own in competition. And this despite the fact that functioning healthcare as well as the successful rebooting of the economy in the corona crisis were conceivable only with the sector and with the production of personal protection equipment as well as in particular intensively used medical products such as ventilator or diagnostic systems, syringe pumps and disinfectant agents as well as pharmaceuticals, above all for intensive care. The crisis has demonstrated how important health is as a cornerstone of societal development and that healthcare industry makes an essential contribution in this regard.

WifOR Research Institute: Importance of research and development investments in the healthcare industry, analysis of the industrial health sector’s R&D footprint, commissioned by the Federation of German Industries (BDI), November 2020. Definition of R&D intensity: describes research expenditure as a share of the sector’s gross added value. The greater the R&D intensity, the stronger the focus of the sector on securing its innovation capacity.

Strategy for healthcare industry

Alongside the products mentioned, the excellent expertise of outstanding scientists and researchers in Germany and the sharing of knowledge through the intense interlinkage of healthcare industry and science has proved to be a decisive factor. With the first SARS-CoV-2 tests and the world’s first and completely new generation of vaccines based on mRNA, it is no coincidence that two of the central components for combating the pandemic come from Germany. The corona pandemic has shown that healthcare industry contributes to security of supply, has proved to be an indispensable partner in combating the pandemic and should therefore no longer be regarded merely as a cost factor. Instead, the healthcare industry should be seen as an integral part of both national and European security. The lessons from the pandemic must certainly be learnt at national level, but above all also collectively in Europe and at global level. Germany and the EU must now set the course for sustainable promotion of innovation, put in place a common European health data space and a digitised health sector in which access to and use of data for research purposes is also guaranteed for industrial research. Crisis-related consequences for the sector As engines for innovation and jobs, enterprises in the healthcare industry collectively build a bridge between benefit to society and economic recovery. This can take Europe out of crisis mode and enable it to remain competitive internationally. Nevertheless, we also already know that the consequences of the corona crisis do not stop at the health sector: this can be seen from the snap poll on the economic cost of covid-19 carried out in May 200 by the German Chamber of Industry and Commerce (DIHK). Only a few businesses have benefited directly from the sharp rise in demand for products used to combat the pandemic, for instance such as disinfectant agents, protective equipment, breathing machines and diagnostic tests. The just under 6% which expect to report a turnover increase for 2020 are set against more than 70% of businesses in the health sector which face turnover deficits. Worse, almost one undertaking in five fears a reduction of more than 50% in total turnover for 2020. This can be traced back to the negative consequences of the countrywide postponement of all scheduled operations, the decline in surgery visits and prescriptions as well as the collapse in export business7. The autumn 2020 survey by the German Medical Technology Association (BVMed) comes to a similar result. According to BVMed, the bottom line for businesses in the MedTech sector will be a turnover shortfall of 4.9% in 2020, and that despite the fact that some products have experienced a demand boom in the corona crisis 8 . Even so, a recovery is possible in the year ahead according to a forecast by the German Electrical and Electronic Manufacturers’ Association (ZVEI) for the world electromedical market in 2021 – with prospects for an increase in global demand in the order of 8% 9. The “world’s pharmacy” is losing ground It is true that in 2020 research and production of modern diagnostics, medical products, pharmaceuticals, biotechnology products and services as well as information and communication technology (ICT) still often bears the “Made in Germany” label. For the time being, this is bringing Germany through the crisis in reasonable shape. But a dangerous trend has been emerging for a number of years: the former “world’s pharmacy” is losing ever more ground to other countries, in particular vis-à-vis the USA and Asia. Clinical research as well as particularly promising biotech production are increasingly taking place outside Europe, although outstanding basic research is carried

Special analysis form 3rd DIHK snap poll, Corona: Gesundheitswirtschaft weiterhin stark betroffen, May 2020. BVMed autumn survey 2020, October 2020. 9 ZVEI MedTech Telegram, issue 53: Prognose Weltmarkt Elektromedizin 2021 – Silberstreif am Horizont, <https://www.zvei.org/themen/gesundheit/medtech-telegram>. 8

Strategy for healthcare industry

out in Germany and the EU. The number of new biotech businesses in Germany is falling sharply. Yet start-ups, new businesses and spin-offs are indispensable in order to strengthen the innovation ecosystem over the longer term. At the same time, it is necessary to create appropriate framework conditions for upscaling of technologies and their commercialisation, and for the formation and expansion of national production on an industrial scale. In biotechnology, the undertakings BioNTech SE and CureVac AG are current examples of successful German beacons in vaccine research and provision against SARS-CoV-2 which urgently need such an innovation boost. Financing based on venture capital is well below average in Germany. New investments, in particular in novel therapies such as gene and cell technology, take place almost exclusively in the USA and Asia10 11. It is therefore important to understand why the research and business environment there is more conducive to innovation and start-ups, to learn from the findings and to design our own innovation promotion biosphere. With appropriate support for venture capital and innovation funds, but also in targeted networking and support for research with and in excellent German and European scientific institutions. F10F

In parallel with the creeping relocation of research and production, an increasingly protectionist trade policy can be observed in a number of countries. As a result, supply chains which have been stable in the past are becoming ever more precarious. If these trends continue unchecked, Germany will surrender a large chunk of the health and economic future since the German and European health industry is heavily oriented on exports. Overseas sales markets secure important research, growth and jobs in the EU. Hence, Germany and the EU must continue to advocate for the route of open trade frontiers while taking a level playing field and reciprocal market access into account. Furthermore, they must reinforce their own innovation and digitisation. Appropriate policy and economic framework conditions also continue to constitute the basis for forward-looking innovations to the benefit of patients. In particular with regard to experience during the pandemic and the severe stress test for our health systems, many fundamentals will have to be renegotiated in the relationship between industry, policy-makers and society. The healthcare industry is prepared to assume this responsibility and to continue to play a leading role in supporting society. The core competences of enterprises in the healthcare industry, which form part of society and are partners of policy-makers, traditionally lie in health, innovation and prevention. Enterprises are prepared to feed their experiences into the necessary further development of the German health sector.

Vision Thanks to the corona crisis, we can define more clearly challenges such as infection and pandemic prevention, individualised healthcare, demography-related disease burden as well as across-the-board digitisation. That is a first important step towards making the health system more fit for the future. Already today, many technologies and products are available to us (e.g. artificial intelligence, big data, sensor technology, e-health, patient-specific medical technology and pharmaceuticals, biotechnological products and services, robotics and interconnected operation theatres) in order to meet these challenges. This diversity of ideas and the courage to innovate can flourish only in the fertile ground of acceptance by society. To achieve this, general reservations and fear of change between policy-makers, science, business and society need to be dismantled or defused in shared dialogue. The aim must be to hone the best ideas and solutions jointly and to accept responsibility for ensuring that these solutions are rapidly implemented with a view to improving our healthcare. In this regard, reservations in sections of society and among individual interest groups about protection of

PricewaterhouseCoopers GmbH (PwC), EFPIA, Economic and societal footprint of the pharmaceutical industry in Europe, June 2019. 11 vfa bio / Boston Consulting Group: Medizinische Biotechnologie in Deutschland 2020, June 2020.

Strategy for healthcare industry

personal data should certainly be taken seriously. The outcome should be that solutions are formulated which give patients the best possible therapy incorporating digital applications and at the same time ensure that patients have control over their own personal data. The healthcare industry is ready to assume its responsibility here, now and in the future. Acceptance of digitisation across society Many digital applications which in the past have failed to make the grade due to reservations, lack of conviction and a shortage of digital enthusiasm as well as the absence of reimbursement possibilities have become the new normal thanks to the pandemic. Since the start of the pandemic, digitisation has no longer been merely a matter for the progressively minded but a necessary obligation for society generally as a condition for survival in this exceptional situation. Awareness of the importance of the digital transformation is now implanted on a broad societal base for the first time. Discussions no longer revolve around whether to digitise but around how we can accelerate this process. Among other things, the changed mindset in society has contributed to this. The mindset of policy-makers and economic decision-makers also needs to change and to recognise that healthcare industry is indispensable as a sector of the future for Germany and Europe. Locational advantages must be better exploited and locational disadvantages vis-à-vis other countries made good. Important steps for digitisation of the German health system have been taken with the laws on digital provision (DVG) and on patient data protection (PDSG). Similarly, in October 2020 the first two digital health applications (DiGAs) became eligible for reimbursement and hence the path has been smoothed for inclusion of DiGAs in the standard service offer. This path must be followed consistently and also extended to medical products in other classes and to inter-sectoral care provision. The situation of digitisation in the German health sector can be seen every day in health offices across the country. For instance, when the latest figures for corona infections are announced, this is not done digitally everywhere. All too often, employees communicate the data by fax. The Federal Government has now put in place the corona warning app for contact tracing, but a large proportion still takes place by telephone. It can already be assumed that medicine will be different in the post-corona era – also in Germany. Because consistent digitisation fundamentally improves the methodology and quality level of medical care. The corona crisis has shown that the German health system needs to catch up in many areas. Many resistances have been broken down in the pandemic. The figures for access to digital service offers have climbed sharply during the corona pandemic. App-based speech therapy, midwife counselling via chat, electronic sick notes or video consultations have clearly amassed users. Thus, the number of general practitioners offering the corresponding services increased from 1,500 in January 2020 to more than 100,000 in May 202012. According to the Central Institute for insurance-based healthcare (Zi), there were a total of around 1.2 million video consultations between 4 March and 30 June 2020 – as compared with just 583 video consultations in the comparable period of the previous year. Experience has been so positive that many medical specialists are broadly in favour of extending the current 20% limitation on the number and content of video consultations 13. Video consultations and sick notes via telephone have proved their worth in the outpatient sector. In the area of remote medical check-ups, e.g. for patients with heart implants, scepticism continues to have the upper hand among policy-makers and self-governing medical trusts, even though these would

Jörg Debatin: “Die neue digitale Normalität im deutschen Gesundheitswesen”, < https://www.faz.net/asv/leben-mit-covid/dieneue-digitale-normalitaet-im-deutschen-gesundheitswesen-16987297.html>. 13 Ärzte Zeitung: Fernbetreuung von Patienten boomt in der Corona-Pandemie, 5 November 2020, <https://www.aerztezeitung.de/Wirtschaft/Fernbetreuung-von-Patienten-boomt-in-der-Corona-Pandemie-414414.html>. 12

Strategy for healthcare industry

be a great benefit in particular for at-risk patients and for doctors. Conversely, the infrastructure urgently needed for digitisation is still largely absent in the inpatient sector. In the area of digitisation and automation of standard care procedures in hospitals, there is still considerable potential which can be realised rapidly. Notwithstanding, a further important step will be taken in the year ahead: even before corona, it was decided that the electronic patient file (ePA) would be introduced in 2021. But Germany is a latecomer with introduction of this digital document – for example, Denmark has had one since 2003. In addition, the law on the future of hospitals (KHZG) creates a structural fund which is explicitly designed to foster digitisation of the hospital landscape. Starting in 2021, the Federal Government will make 3 billion Euro available so that hospitals can invest in modern emergency capacities, digitisation and their IT security. Significance of health data If the path of digitisation is trodden consistently, many more applications can be found. The decisive element here is data. The more high-quality data can be used, the greater the benefit for research and development as well as diagnosis and therapy decisions. However, there are high hurdles to this in Europe. It is not only the different language and systems which make cooperation difficult. Data protection, too, in particular uniform implementation of existing rules, can create particular obstacles which mean that Germany and Europe are de facto at a disadvantage in digital competition with the USA and China. The EU is now trying to tackle this situation: EU Commission President Ursula von der Leyen and Federal Health Minister Jens Spahn are calling for a European health data space which interconnects existing systems in the Member States in a common structure. Alongside the “Research Data Action Plan” 14 published by the Federal Ministry of Education and Research (BMBF) in October 2020, the draft also makes clear the Federal Government’s data strategy whereby data availability should increasingly determine the competitiveness of a business location. In addition, it is clear from both papers that health data have a particular role not least because of their potential for saving lives. But this assessment and the announcements must also be followed by measures so that the potential of both public and private research can be realised to the full. For tomorrow’s medicine, we need to be more courageous with digitisation. We need more connectivity and functioning interfaces in order to be allow linkage of structured, high-quality datasets. This is a core condition not only for better care of covid-19 patients but also for patient care generally in Germany. But this requires acceptance of the use of health data independent of the pandemic. There is also a challenge for the healthcare industry here. As the foremost driving force behind medical research, the healthcare industry must make it clear that we handle these data responsibly, can apply learnings from these available collected data rapidly and hence benefit patients, and in this way contribute to significant improvements in healthcare. We in German industry are convinced that increasing numbers of people understand that medicine is limited if data are lacking – that was all too obvious for the development of a corona vaccine. The development of a corona vaccine is a good example of the primordial role that data play for the healthcare industry in speedy research and development. This shows clearly that only research in scientific institutions and industry can deliver the solution. Cooperation instead of compartmentalisation In the wake of the corona pandemic, there have been and are more cooperative ventures around the world than ever before. New tests, vaccines and therapies against covid-19 have been developed at

BMBF: Aktionsplan Forschungsdaten, <https://www.bmbf.de/de/aktionsplan-forschungsdaten-12553.html>.

Strategy for healthcare industry

an unprecedented tempo in Germany and worldwide. This has worked because enterprises in all branches of the healthcare industry have cooperated rapidly and straightforwardly with each other as well as with private and university research institutions, start-ups, authorities and policy-makers. In the battle against covid-19, enterprises publish research results without delay and make medicines, production capacities, equipment and laboratory capacities available. This is particularly important in research and development: in the case of rare diseases, cross-border cooperation as well as crossborder data exchange are even more crucial since only sufficient volumes of patient data can allow new findings, conclusions and research initiatives. In countries with small populations, this is difficult or impossible. Cooperation is the watchword not only in research but also in the production of pharmaceuticals and medical products. Today and in the future, no country in the world can look after itself completely. Thus, China acquires many pharmaceuticals, mostly patent-protected, from German and European production. For generics and the requisite raw materials, the situation is reversed: China and India are the export titans here15. In other words, there is a two-way exchange in the field of pharmaceuticals. Now as in the past, Germany is among the strongest production locations for patent-protected medicines and innovative medical products. Germany’s particular strength in pharmaceuticals, medical technology and biotechnology production lies in being able to guarantee quality, even with complicated processes. This explains why businesses in Germany occupy the leading position in Europe for the number of active substances produced for biopharmaceuticals, and why Germany lies in second place worldwide behind the USA in biotech production – for example for insulins, rheumatism and cancer treatments16. Medicine of the future “Made in Europe” Demands that all countries should recalibrate and produce everything themselves are hardly credible for a country that lives from exports. In healthcare industry, exports have almost doubled since 2007 to reach a volume of just short of 57 billion Euro in 201917. At best, a policy of national symbolism and mandatory repatriation of industry would stimulate employment in the EU in the short term but would jeopardise EU competitiveness in the long term. The opportunities lie in a smart industrial policy for Germany and Europe. This must consist in strengthening domestic industry through innovation, digitisation and business creation incentives as well as risk capital, keeping trade routes to our important export markets open, finding allies against a protectionist industrial policy there and at the same time pushing for a global playing field and equal market access in important health markets. Particularly critical care must also be supported at home and secured through diversification of supply chains as well as buffers or international public reserves which can be organised via a digital stock platform. A balanced approach to concentration of value chains is needed which uses objective resilience analyses to address the specific case and ensures generic basic care, reduces strategic dependencies in care-relevant products and at the same time supports exploration and production of innovative medicines and medical products. Available research development and production of medicines can be supported by the same token. Yet it is clear from the angles of competition and care: Our aim must be that the medicine of the future is literally made on our continent.

Michael Grömling / Jasmina Kirchhoff: Produktions- und Zulieferstrukturen der deutschen Pharmaindustrie, IW-Trends 4/2020. 16 vfa bio / Boston Consulting Group: Medizinische Biotechnologie in Deutschland 2020, June 2020. 17 Federal Ministry for Economic Affairs and Energy (BMWi) (2019): Gesundheitswirtschaft – Fakten & Zahlen. Sonderthema: Industrielle Gesundheitswirtschaft.

Strategy for healthcare industry

It is therefore important also to make the support for cell and gene technology which is recommended in the EU pharmaceutical strategy a reality with excellent framework conditions. It is questionable whether further regulatory measures (along the lines of the 15 th amendment to the foreign trade and payments decree, for example) are the outcome of an objective balance between national protection interests and those of an attractive innovation and investment location. How is it to be avoided that the urgently needed risk capital is not diverted to the USA or to Asia due to further state interference in the economy? How is it to be ensured that our talents in pharma, biotech and medical technology but also in digital innovation can continue to be successful commercially also in Germany? For German industry, greater isolationism is the wrong answer, because the healthcare industry acts globally in research and production. Furthermore, to strengthen the resilience of European health systems in pandemic situations, what is needed is a balanced debate which does not confuse supply issues with a dedicated EU business or industrial policy in such a way that this is to the detriment of tried and tested international supply chains and diversification. If debates are conducted on the development of healthcare industry value creation chains in Germany and Europe, this must take place unambiguously in the framework of a purely incentive policy and must not comprise compulsory relocation measures. Forced repatriations would send the wrong economic signal to an export-oriented sector, which raises trade barriers, unnecessarily dials down globalisation and increases the risk of economic recession and higher prices by fostering protectionism. Conversely, the wish for security of supply must be addressed carefully by moulding the ideas expressed about regional or international public reserves of medical products, protective equipment, disinfectant agents and medicines rationally and in a coordinated fashion at European level. To this end, it would be advisable to develop a digital reserve platform of care-critical and IVD products and components. Moreover, it is also of decisive importance for this process that supply chains are strengthened, in particular for care-relevant products while securing European production locations and diversification, in order to avoid or minimise the creation of strategic dependences. Among other things, this means that industrial expertise on supply chains is brought in and incorporated to ensure that planning does not lose sight of the current realities of global supply chains or that care bottlenecks for patients are not created elsewhere. Beyond this, the focus of the discussion must shift to the notion that a durable strengthening of the competitiveness of Europe as a business location for healthcare industry is ensured with regard to existing innovative products and the establishment of new production capacities. All measures for the promotion of research, development, production and sale of products meeting medical need must lead to structures being strengthened for aspects such as production, development and services which can hold their own in international competition in the long term. For this, competition factors should be promoted and developed in a targeted way in coordination with industry, e.g. robust protection of intellectual property, a dismantling of bureaucracy with a view to simplified authorisation and reimbursement procedures, rights similar to those of other actors regarding access to data as well as training of skilled workers. The strengthening of Europe as a business location should also contribute to a strengthening of local and regional structures and health systems through a proactive external health policy, for example in the form of trade agreements as well as joint European cooperation projects in developing and emerging countries, with healthcare industry enterprises delivering successful results in cooperation with state agencies. Alongside these important economic measures, what is needed more than ever is a strategic exchange between all societal and political stakeholders on further development of Europe as a location for research, science and production, and hence also on securing excellent patient care in Europe.

Strategy for healthcare industry

The issue for regulatory policy relates to attractiveness for investors – assessed against international competition. That means opening rather than isolationism, and attractive markets for innovative products. In addition, there need to be courageous investments in education and its institutions as well as in new technologies such as digitisation, in order to enable continuing broad participation of society. Germany is a country of innovation and, according to Federal Research Minister Anja Karliczek, also wants to remain a country of innovation 18. The three Federal Ministers for Education and Research (BMBF), Health (BMG) und and Economic Affairs and Energy (BMWi) together recently laid an important foundation stone for the digital medicine of the future with the roadmap for the “Data for Health” innovation initiative19. According to the Ministers, Germany should occupy a leading position worldwide in development and application of digital health innovations. Enterprises in the healthcare industry expressly welcome this step. But further enormous efforts will be needed in order to maintain the innovative strength of the healthcare industry in Germany over the long term.

Analysis of locational factors The healthcare industry has been a key industry for the German economy for many years. At the latest since the publication of the research project “Satellitenkonto für die Gesundheitswirtschaft in Deutschland” sponsored by BMWi in 2009 and the first BDI study “Ökonomischer Fußabdruck ausgewählter Unternehmen der industriellen Gesundheitswirtschaft für den deutschen Wirtschaftsstandort”20 in 2013 it has been clear that the sector is of enormous importance for Germany. Germany’s health industry has long enjoyed a reputation as “world’s pharmacy”. Today, Germany is still regarded as an important health sector location. In this context, the higher costs for highly qualified workers, the large number of approval procedures and strict requirements for production installations have been willingly accepted, since “Made in Germany” still means proven quality worldwide for diagnostics, medical products and pharmaceuticals. But scientific and technological progress, in particular the digital transformation with new cross-cutting technologies such as artificial intelligence, must also find a niche in Germany so that healthcare industry as a whole can continue to feel at home there. One thing is certain: the locations of the most globally active healthcare industry enterprises are in international competition for investments. Other countries attract with low taxes, research grants, better digital infrastructure, well educated workers as well as low labour costs and non-wage labour costs. Moreover, policy-makers in Germany all too often neglect to explain and argue in favour of industrial policy needs to society. That is a knock-out criterion, because the decisive condition for investments is confidence in the future viability of the location and the long-term dependability of the framework conditions. With investments in plant, personnel and specific research, development and production projects, decisions are taken which bind an enterprise for the years or even decades ahead. Uncertainties about the future framework conditions are poison for such investment decisions. In this section, we explore the following questions: what prompts enterprises to decide for other locations? What criteria do enterprises apply for investment decisions? What makes a location such

Press release (057/2020) BMBF on presentation of Bundesbericht Forschung und Innovation 20202020: <https://www.bmbf.de/de/karliczek-forschung-und-innovation-sind-unsere-staerke-11580.html> (13.05.2020). 19 BMBF, BMG, BMWi: “Daten für Gesundheit”: Roadmap für eine bessere Patientenversorgung durch Gesundheitsforschung und Digitalisierung: <https://www.bmbf.de/upload_filestore/pub/Daten_helfen_heilen.pdf>. 20 BDI study: Ökonomischer Fußabdruck ausgewählter Unternehmen der industriellen Gesundheitswirtschaft für den deutschen Wirtschaftsstandort, April 2013, <https://bdi.eu/publikation/news/oekonomischer-fussabdruck-fuer-den-deutschenwirtschaftsstandort/>.

Strategy for healthcare industry

as Germany attractive for business? In what direction should the healthcare industry develop and why? In order to address these questions, the various locational factors in the areas of security of supply, research and innovation, digitisation of the health sector as well as economic policy framework conditions are analysed in detail. On the basis of the area of tension between analysis of the status quo on the one hand and vision on the other hand, the following tentative solutions are developed for achieving the vision. The concrete proposals for solutions have been drafted in the BDI committee for health industry.

Security of supply Background: price war in pharmaceuticals market The manufacturer today receives on average 16 Eurocents and, after deduction of rebates resulting from contracts negotiated by health insurance funds, just 6 Eurocents per daily dose of a generic medicine. Taking the example of the universal antibiotic Cephalosporine and at the current price level eligible for reimbursement, a loss of 46 Eurocents would be generated if the active substance were to be produced locally. It is therefore unsurprising that many pharmaceutical manufacturers in Germany and Europe have gradually given up. Even the Indian pharmaceutical industry now sources 80% of its preliminary products from China 21.

Supply chains and production conditions

Status quo ▪ Pharmaceuticals: - Pharmaceutical production is a complex process with many individual steps, often at different geographical locations. Production of the active substance is just the first step in a long and often globalised manufacturing chain. - Active and auxiliary substances constitute the important input materials for the production of a pharmaceutical. If there are only a few sources of supply, the production process is vulnerable to disruptions due to supply difficulties . The solution lies in diversification of production chains. - In particular because of cost pressure, above all in the area of generic medicines, ever more partial production steps are no longer carried out in Germany or Europe. In this regard, it can be pointed out that the production of active substances in particular takes place primarily in Asia.

Morris Hosseini / Michael Baur: Marktversagen bei der Arzneimittelversorgung am Beispiel von Antibiotika, Covid-19 wirft Schlaglicht auf das Problem – ist aber nicht dessen Ursache, ifo-Schnelldienste, May 2020.

Strategy for healthcare industry

The important aspect of security of supply is very widely disregarded in the day to-day contract award practice of health insurance funds and state health authorities, even if there are some positive examples. The instrument of import promotion was originally created to build up profitability reserves which are generated when low prices obtain for pharmaceuticals abroad . This instrument has today been overtaken, inter alia through introduction of the law on reorganisation of the pharmaceutical market (AMNOG). Importers do not need any state subsidy because free movement of goods in the EU single market places them on an equal footing with competitors on the market. Neither can the import promotion clause be justified on economic grounds . For instance, for calendar 2017 AOK Baden-Württemberg (regional health insurance association) reported savings of 7 million Euro on pharmaceuticals whereas almost 230 million Euro was saved via pharmaceutical rebate contracts 22 . Inasmuch, health insurance funds themselves are increasingly asking questions about the relevance of the import promotion instrument for reducing pharmaceutical costs 23 24 . Moreover, the diversion of imports to Germany creates bottlenecks in poorer countries and/or encourages counterfeiting (e.g. as in the so-called “Lunapharm” scandal). 2

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Medical products: - In medical technology, it is often preliminary products from abroad which are then incorporated in German production facilities. Since these deliveries have to meet the high European regulatory requirements for medical products, there are fewer possibilities to switch to other partners when bottlenecks occur. - This aspect is exacerbated by the fact that the material quality of preliminary products or raw materials can easily fall outside the tolerance ranges. For instance, this can apply to the input substances of preliminary products which do not conform with EU environmental standards or surface quality requirements because they do not meet safety or hygiene standards.

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In the corona crisis, companies’ in-house risk management systems have reacted very well to disturbances in supply chains. Insofar as there have been temporary interruptions, these could overwhelmingly be traced to logistical challenges which have arisen through sudden and new border controls. It has proved possible to tackle these problems through new government rules (e.g. fast-track procedures or “green lanes” for foodstuffs and medicines). Accordingly, measures and improvements to global trade rules need to be an important part of the strategy for security of supply . These observations are also confirmed by the latest OECD investigations 25. It is certain: diversified production and supply chains with capacity reserves have demonstrated their crisis resistance even in the corona pandemic.

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AOK Baden-Württemberg: Pharmaceuticals: Arzneimittel: Importquote ist ein zahnloses Bürokratiemonster, July 2018, <https://aok-bw-presse.de/ressorts/lesen/arzneimittel-importquote-ist-ein-zahnloses-buerokratiemonster.html>. 23 Christine Hopfgarten: Rezepte gegen Arznei-Engpässe, Gesundheit und Gesellschaft, issue 11/2020. 24 Johann-Magnus von Stackelberg (GKV-Spitzenverband) in the public hearing of the Health Committee on GSAV, 10 April 2019: “But there is a very large and wide current in health insurance funds which says that promotion has been overtaken”, minutes of 45th meeting of Health Committee 2019. 25 OECD, Building resilience in global supply chains for all, November 2020.

Strategy for healthcare industry

Vision

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The globalised economy with diversified supply chains needs to be further reinforced . For a strong exporter such as Germany, it is the underpinning for prosperity . Stable international private health research and production networks are indispensable for progress. A strengthening along the entire value creation chain within Europe can make an important contribution to greater continuity of supply . Diversification increases security of supply: companies already take this into account in their risk management systems which they constantly adapt. If a location fails, it can be substituted by another. But the international division of labour needs to be pursued with even greater attention, supply chains need to be better secured and diversification must be enabled. Research and production must be developed in a targeted way in the countries which are dependable long-term trade partners. Alongside this, the focus must be placed on safeguarding supply and main taining the local infrastructure. For all regulatory interventions, it is important to take into account the position of globally active enterprises in Germany and not to weaken it in the competition between business locations through over-regulation. International supply chains are a lived reality which brings many advantages in its wake, in particular in diversified structures which ensure flexibility : the worldwide division of labour - secures and fosters supply structures also in other countries. In the age of the United Nations’ Sustainable Development Goals (SDGs) and global sustainability objectives, health should similarly be considered in local and global terms alike , - helps to build health systems worldwide and to promote innovative framework conditions worldwide, - helps to relay production know-how and skills to other countries, creates highquality jobs at home and abroad and contributes to a global exchange of knowledge, to economic growth and, given the right framework conditio ns, also to prosperity gains, - can itself benefit from cooperative ventures with a wide variety of scientific or economic networks worldwide, - secures substitution possibilities at production locations in other countries in local or regional crises, natural catastrophes and production outages, - leads to healthy competition for the most innovation-friendly business location policy in science, research, digitisation and business, - promotes production efficiencies and also encourages fair competition for better locational conditions between countries.

Proposed solutions ▪

Pharmaceuticals: - A repatriation of active substance production to Germany and Europe is desirable only to a limited degree and is scarcely feasible, not least because it would require

Strategy for healthcare industry

large investments. Nevertheless, broadly speaking, pharmaceutical production which is still located in Europe, in particular manufacture of active substances, should be supported through a competition-promoting EU strategy for improvement of framework conditions – consonant with basic free trade principles – pharmaceutical production should be secured against further relocation and hence make a contribution to the diversification of international supply chains, including the business location Europe. Political support, possibly also financial support in the form of investment incentives, is broadly possible and desirable in the framework of innovation and digitisation support as well as general start-up support and support for structurally very weak regions. Furthermore, political support and financial incentives can be envisaged, at least for a few active substances which are indispensable for security of supply. In this regard, it is important to ensure that measures are compatible with applicable WTO and EU competition rules. In addition, thought should be given to further development of international state aid rules and ensuring that the EU does not establish any practices here which it rightly criticises on third markets. Such practices as privilege local enterprises elsewhere and discriminate against foreign enterprises or even encourage predatory pricing, causing serious competition distortions and undermining the level playing field . Instead of protectionist tendencies, it is important to improve framework conditions in Germany and Europe in such a way that it is increasingly attractive for enterprises to relocate their production capacities to Europe or leave them here. According to the theory of comparative cost advantages, the only production processes that are likely to settle in Europe/Germany are those for whic h there are demonstrable comparative advantages over the rest of the world assuming comparable requirements, e.g. environmental and social standards . This mechanism should always be preferred over protectionist measures . In order to enhance security of supply in Germany and Europe, it may be necessary to modify existing tendering rules for rebate contracts to make them not protectionist but more competition-friendly. Active substances/pharmaceuticals which have exhibited a supply deficit on multiple occasions in the last two years should no longer be put out for tender for a period of two to three years. To prevent supply bottlenecks and/or counterfeiting incentives in poorer countries, quotas on European imports of pharmaceuticals need to be scrapped .

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Medical products: - Preliminary production in Germany or at least in Europe should be promoted if securing the supply chain for particularly sensitive products cannot be achieved through the milder and similarly suitable means of diversification and capacity reserves. - In addition, supply relationships with countries of origin must be strategically secured.

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Also needed is targeted support for European and German public-private partnerships (PPP). Whereas there are already PPPs in other economic areas, above all in the transport sector, and policy-makers can fall back on case studies, toolkits and knowledge databases on best practices for designing their programmes, the model has

Strategy for healthcare industry

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not yet established itself in the health sector. With an eye to limited government budgets, the expectation that downward pressure on costs and an improvement in healthcare can be achieved in the framework of PPPs has yet to be tested. Since health is a sensitive sector, it seems advisable that Germany too should explore the the me of PPP in the health sector in good time and determine the appropriate framework conditions in coordination with the healthcare industry. If international supply chains nevertheless have to be made more resilient, reserves of protective equipment and/or of particularly essential medicines appear to be a proven means of securing supply, alongside diversification in poorer countries . - It is important that these reserves are established by the public sector, reserves are organised plurilaterally or regionally to the extent possible and corresponding arrangements are elaborated in coordination and consultation with industry . Use of a digital stock platform can also be recommended. - To the extent possible, the focus of the reserve should be on raw materials and active pharmaceutical substances instead of finished pharmaceuticals so that there is a certain degree of flexibility (e.g. strict labelling rules) is maintained and the needs of different markets can be served. - This reserve under government responsibility could be constituted along similar lines to the area of food security. Some overflow into exports could serve as a safety valve, whereby a state off-take guarantee is indispensable for reserves under government responsibility so that this does not result in under-priced offers on the world market. - Instead of countries acting individually in supply, European solutions including digital possibilities must be created in particular in the EU. - In addition, exiting supply chains must be sufficiently appreciated and industrial know-how must be used to structure the development of such reserves realistically and so as not to cause delivery bottlenecks elsewhere. In the event of any new requirements on supply chains or supply obligations, industry’s expertise in the area of product supply and supply chains must be tapped, for instance via consultation of expert circles on supply chains (e.g. on issues such as refrigeration chains, perishability as well as information systems on emerging shortages of particularly essential medical products). In addition, alongside the criteria already mentioned, attention must be paid to enabling a continual stock turnover in order to avoid a throw-away mentality regarding resources which are valuable for patients . Industry must also be given sufficient time to prepare for a capacity increase so that enterprises are not suddenly obliged to breach contracts with other regions or contracting partners and to prevent bottlenecks arising elsewhere. This also calls for transitional arrangements and time to adjust and increase capacities . For this, industry needs stable framework conditions and, if necessary, off-take commitments for products which cannot otherwise be produced economically in Germany.

Strategy for healthcare industry

Market access and reimbursement

Status quo ▪ ▪

Regulation of pharmaceuticals as well as authorisation modalities for medical products are becoming increasingly demanding and complex. German supply structures today no longer always enable across-the-board availability of medical services at the most up-to-date state of medical/scientific knowledge.

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Pharmaceuticals: - A strength of Germany as a business location lies in providing direct market access for new pharmaceuticals following market authorisation. That is not always the case in other European countries. The advantage of this rapid access should not be given up carelessly. - Targeted research into areas of unmet medical need does not currently receive adequate support. The European orphan drug regulation has shown that targeted incentivisation can markedly increase the number of available therapies in an area of unmet medical need. These principles need to be safeguarded and further developed. Further development of proven active substances is also insufficiently recognised under the conditions of fixed amounts and the price moratorium . - Reimbursement of pharmaceuticals in the inpatient sector essentially takes place via the system of a flat rate per case (DRG system, DRG: Diagnosis Related Groups). In the case of innovative pharmaceuticals which are not (yet) sufficiently reflected in an existing DRG, there is a financing hiatus of at least two years (“new examination and treatment gap” – NUB-Lücke). This makes access to needsdriven innovative care solutions more difficult for hospital patients and generates an assessment difference as compared with the outpatient sector where pharmaceuticals are essentially available immediately. - The results of new developments in precision medicine are impressive. Under the current reimbursement system, they collide with the limits of the methods and assessment procedures conceived for classical pharmaceuticals. Markedly smaller and more specific patient groups – as also regularly occur in the case of rare diseases – in combination with the complex study designs they require call for further development of the present system for early benefit assessment. Broad reimbursement of so-called companion diagnostics (e.g. molecular analyses with therapy-relevant biomarkers) as an enabler for precision medicine has not been secured.

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Medical products: - Market access for medical products and in-vitro diagnostics as regulated at European level in MDR / IVDR (Medical Device Regulation / In-vitro Diagnostic Medical Devices Regulation) – as well as implementation of these rules in Germany and Europe – faces the risks of legal uncertainty through ambiguous

Strategy for healthcare industry

requirements and an excess of regulation. The challenges posed by EU IVDR are examined in a subsequent section. In addition, a capacity problem is apparent. There are currently 18 notified bodies under MDR (including six in Germany) 26 and four under IVDR (including two in Germany) 27 (situation as at 14 December 2020). By comparison: under the old law, in 2019 there were 58 notified bodies in Europe, including ten in Germany . However, it is not the number that is decisive but the capacity of the notified bodies. Hence, all bodies remaining on the market are already well developed. In fact, the largest bodies have doubled their capacity since 2013 28 . Despite development capacity, these bodies collectively are very probably insufficient . At the present time, it can be assumed that some of the existing notified bodies will not apply for accreditation because the new requirements under MDR / IVDR are too complex. The absent capacities could lead to medical products produced in Germany no longer being certified with implementation of the new rules in Germany and as a result would not be available for patients. For example, these also include the PCR, antibody and antigen tests developed in the framework of the pandemic . In this area, German supplies large parts of the world. At national level, more difficult framework conditions for reimbursement contribute to innovative medical technologies in Germany often reaching patients only with a considerable delay – in particular as compared with many other European countries. Long and opaque procedures as well as deficient deadline rules for reimbursement decisions in some areas on the one hand, and unworkable requirements for demonstrating the benefit of methods and their costs on the other hand, hold back strategic product development and distr ibution. Deficient rules for a transition between inpatient and outpatient sectors in both directions lead in part to untreated patients and to sub-optimal treatment along the care chain. The digital transformation of the health system is regarded as a central task with a view to sustainable and better care. However, further essential steps are necessary for implementation in the area of legislation and self-administered bodies. Hence, the three digital laws (DVG, PDSG and DVPMG) must be followed by a comprehensive extension to further risk classes and intersectoral reimbursement. F

Regulation (EU) 2017/745 on medical devices <https://ec.europa.eu/growth/toolsdatabases/nando/index.cfm?fuseaction=directive.notifiedbody&dir_id=34>. 27 Regulation (EU) 2017/746 on in vitro diagnostic medical devices<https://ec.europa.eu/growth/toolsdatabases/nando/index.cfm?fuseaction=directive.notifiedbody&dir_id=35>. 28 The European Association Medical devices Notified Bodies: Medical Device Survey 2019, page19 et seq., <https://www.team-nb.org/wp-content/uploads/2020/05/Survey-2019.pdf>.

Strategy for healthcare industry

Vision ▪

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For an attractive lead location of local providers with global competitiveness, innovative healthcare industry products and research services in the German market must be available rapidly to patients. To promote innovative technologies and medicines, such as highly developed imaging and surgery systems as well as cell and gene technology in Germany and the EU, health systems must dismantle obstacles in market access and reimbursement, be open to innovative reimbursement models and rapidly devise corresponding plans. In this regard, digital care solutions which meet data protection requirements should be assigned a high value so that patients can be treated on a more individual and autonomous basis. Generally speaking, healthcare industry enterprises have a considerable interest in voluntary European harmonisation of HTA (Health Technology Assessment). The current need to submit applications separately in different countries with distinct requirements on evidence offers scope for improvements. Nevertheless, the harmonisation possibilities are limited to systematic assessment of clinical evidence as well as central principles in the assessment process. Only if EU-wide use of clinical assessment supersedes the equivalent step will it be possible to achieve the core objectives of the HTA regulation, which are avoidance of fragmentation and double work.

Proposed solutions ▪

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Creation and expansion of low-threshold, well-staffed counselling offers which rank alongside such innovation agencies as PEI (Paul-Ehrlich-Institut) and BfArM (Federal Institute for Drugs and Medical Devices) for authorisation issues. In addition, counselling offers should be established at European level. Of central importance are transparent NUB procedures and procedures in the assessment committee as well as obligatory involvement of industry, for example by giving a right of petition. The theme of market access and reimbursement should also be addressed in bilateral relations with important markets and competitors. It would also be useful to advocate for innovation to be rewarded in foreign markets in line with national value creation . Prices which reflect purchasing power are the key to the best possible access to medical innovation around the world. Efforts to introduce supranational price-setting as well as further international price referencing in the field of pharmaceuticals and medical products are leading to a downward price spiral whic h continues to jeopardise necessary above-average investments in research and development and is detrimental to patient care.

Strategy for healthcare industry

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Pharmaceuticals: - AMNOG should be framed so as to be more innovation-friendly, inter alia in order to be able to keep up with ground-breaking innovations such as precision medicine. - In particular, it is important to establish solutions which are necessary for innovative, new forms of therapy and represent as a departure from the “one-sizefits-all” approach. This presupposes a general opening of the system to further scientifically accepted end points and study designs. - More room for new contractual models should also be created in the reimbursement system. These models offer more appropriate solutions precisely for novel therapies in individual cases. - Further development of proven active substances must be incentivised and use patents must be protected. In this regard, no indication area should be disadvantaged. - A transparent and more flexible NUB procedure should be introduced for inpatient reimbursement. Instead of bureaucratic evaluations of individual cases by health insurance funds, in order to create financial security, off-budget supplements should be organised for hospitals to make allowance for innovative pharmaceuticals entering the market. - A uniform, Europe-wide procedure for assessing evidence on pharmaceuticals, the so-called EU-HTA (EU Health Technology Assessment), has the potential to reduce double work at national level. To this end, an appropriate modification of national legislation is also necessary in order to minimise the ris k of duplication and competence disputes.

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Medical products: - Germany must strive for pragmatic and innovation-friendly enforcement of the EU medical products regulation (MDR) and the EU in-vitro diagnostics regulation (IVDR) and also advocate for this at European level. The questions which are still open with the postponed entry into force of MDR (May 2021) must be clarified promptly and the system of notified bodies rendered functional. The necessary legislative acts and implementing provisions must be adopted rapidly . Necessary testing capacities must be kept ready and remote audits must be enabled for as long as the pandemic lasts. In particular, the healthcare industry calls for: - The notification procedure for notified bodies under MDR and IVDR must be accelerated urgently. Because capacities for MDR are very meagre. - For medical technology enterprises, there must be no additional bureaucratic obstacles and rules during the MDR transition phase. - For the necessary MDR reports, it is important to enable access to care and routine data. - A harmonised Europe-wide EU-HTA should place the focus on particularly invasive medical products based on a new theoretical/scientific concept and create binding and objective assessment methods for medical products . In order to increase the use and acceptance of common European HTA reports in the Member States, the latter should therefore decide for themselves whether they want to take part in voluntary cooperation. Further aspects:

Strategy for healthcare industry

Healthcare industry enterprises encourage the EU bodies to concentrate on EU-HTA cooperation on selected transformative innovations and to define clear selection criteria in order to identify which technologies should be assigned the highest value. - The planned EU-HTA procedure should not impede timely access to innovations. The information that has to be collated in the EU-HTA report is clearly different from the information that has to be collated in the provisions on medical products and on in-vitro diagnostics (MDR / IVDR). Double work, inconsistencies and interference should be avoided. - Technology developers are involved as stakeholders as is provided for in the current EU-HTA cooperation and proven procedures. - For the reasons set out, medical products should be exempted from an obligatory EU-HTA procedure and rather be integrated in the framework of rules for voluntary cooperation. Germany must develop suitable instruments for method assessment (e.g. an assessment in the course of the product lifecycle) and support manufacturers in the production of the evidence required in SGB V. The necessary specialist knowledge must be communicated via targeted training offers and implementation of method assessments must be financially supported at least in the initial phase. Self-administration procedures for access to remuneration systems should be accelerated as much as possible, and rendered comprehensible and susceptible to planning. In particular, the healthcare industry calls for the following: - If a transition from one method or service from inpatient care to the outpatient sector or into outpatient operation is proposed, remuneration for patients’ inpatient care must continue to be paid in full throughout the decision-making procedure. - What are needed are clear and short deadlines laid down in law for assessment procedures concerning auxiliary products (§ 139 SGB V) and medical products (§ 135 SGB V, § 87 e SGB V) in the outpatient sector. Only in this way can delays and suspension of procedures and the associated planning uncertainty for enterprises, doctors and patients be avoided. - To ensure optimal patient care with innovative medical technologies, a general right for industry to petition the assessment committee for the inclusion of services in EBM pursuant to § 87 SGB V should be laid down in law if there is a guideline recommendation or another adequate basis for the method. The framework conditions for medical products should also keep up with the digital transformation. To this end, the legislator has already taken the first steps with DVG and the new procedure for digital medical products in classes I and IIa (digital health applications – DiGAs). It is problematic that this procedure is conceived primarily for apps. Medical products in higher classes, in-vitro diagnostics and combination products are not covered by this. In particular, the healthcare industry calls for the following: - For digital medical products in classes IIb and III as well as combination products, a system corresponding to the fast-track procedure must be developed so that these products are available rapidly for patient care .

Strategy for healthcare industry

Furthermore, for digital health applications, a possibility for protection of innovation must be driven forward at European level. Unlike in the area of pharmaceuticals, there is no data exclusivity for these apps.

Background: European in-vitro diagnostics regulation (IVDR) So-called in-vitro diagnostics are of enormous importance for diagnosing illnesses and steering therapies. For instance, they also include rapid corona tests, blood sugar monitoring and liquid biopsies in cancer diagnosis. According to the results of a DIHK survey on the consequences of EU-IVDR which enters into force in May 2022, almost half of the enterprises affected in Germany expect access to the EU market for their innovations to be more difficult (new approval procedures entailing additional bureaucracy as well as absent capacities in the notified bodies)29.

EU in-vitro diagnostics regulation (IVDR)

Status quo ▪

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As part of the healthcare industry, the diagnostics industry makes an important contribution together with medical laboratories in Germany to making the covid-19 crisis manageable. At the same time, the industry itself faces the enormous challenge of having to adapt to the requirements of the new European in-vitro diagnostics regulation (IVDR). The new rules also apply without exception for all companion diagnostic tests . The current deadline for entry into force of the new in-vitro diagnostics regulation has been set for 26 May 2022. The diagnostics industry, which is largely established in Germany, urgently needs the regulatory infrastructure specified in IVDR, in particular in the form of notified bodies. These must be up and running by the end of 2020 at the latest so that all tests meeting the new requirements can stay on the market and be brought back into circulation . Yet, around eighteen months before the new rules enter into force, the necessary new infrastructure is not yet in sight for a variety of reasons (e.g. resources are being used to combat the pandemic, MDR implementation has been deferred). Thanks to the extension of the MDR transition period and deferral of the introduction of the European databank for medical products (EUDAMED) to May 2022, the dates for entry into force

DIHK: Wird die Entwicklung von Innovationen wie Corona-Schnelltests zukünftig schwieriger? - Hersteller von In-vitroDiagnostika aufgrund neuer EU-Vorgaben vor großen Herausforderungen, November 2020.

Strategy for healthcare industry

of the medical devices regulation (MDR) and IVDR now coincide. This has led to increased demand for the absent notified bodies.

Vision ▪

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For example, companion diagnostics is central already today in the selection of pharmaceuticals for seriously ill patients. In future, highly innovative precision diagnostics will play an ever more important role in personalised medicine, in other words not only indication-related but also patient-individual determination of the best possible therapy. If the new regulatory framework is to meet its objective – ensuring the quality of the diagnostics deployed across the board – and not to become a bottleneck for the many new innovative diagnostics, what is needed first of all is implementation of an adequate infrastructure of notified bodies for certification. Only four of the twenty notified bodies in Europe have so far been recognised under IVDR rules, whereas in future around 90% of all in-vitro diagnostics will have to be certified by a notified body against 15% now. Specifically taking the example of the tests on the coronavirus SARS-Cov-2, which would have to undergo the comparatively complex IVD test procedure under the current legal situation, it is clear that there is a great public interest in making tests available to all as rapidly as possible. It would be difficult to explain and a massive step backwards in combating the pandemic if high-quality tests could not be deployed as rapidly as possible due to the new regulatory framework.

Proposed solutions

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In order for the described situation of a care bottleneck not to occur in day -to-day care practice, it is necessary first of all to secure the infrastructure across Europe – i.e. a sufficient number of notified bodies for certification of in-vitro diagnostics. For this reason, on behalf of the entire healthcare industry and medical laboratories, German business recommends an extension by one year of the transition period and hence the validity of the IVD regulation which has been in force since 2017. The transition period could then end in 2023 and the new IVDR alone come into force on the proviso that an adequate infrastructure of notified bodies has been created by that time.

Strategy for healthcare industry

Federal Health Minister Jens Spahn on the Federal Government’s strategy for global health30 “Viruses have never found it so easy to spread worldwide in the shortest period of time. Health risks do not stop at borders in the 21 st century. For that reason, we want to think about health protection more globally, that is one central lesson from the corona pandemic. Alongside national strategies, we need stronger international cooperation in health policy. Only in this way can we make health systems worldwide more resistant. This includes reforming WHO and making it more capable of action. We need a WHO which can prevent health risks and act rapidly when emergencies arise. In its own interest, Germany will engage internationally even more strongly here.”

Global health

Status quo ▪

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Basic healthcare is still available only for less than half of the world population. Agenda 2030 for sustainable development is intended to do something to change this poor state of affairs and was adopted by all Member States of the United Nations in 2015 . In particular, the target of the health-related SDG 3 (sustainable development goal) is to “ensure healthy lives and promote well-being for all at all ages”. The objectives of global health policy include the endeavour to improve the health of people worldwide and to dismantle inequalities (“leaving no one behind”). In addition, health should be considered and promoted in all policy areas such as innovation, digitisation, industrial and external policy “health in all policies” and protection against global health risks should be ensured. In this context, universal health coverage (UHC) and reinforcement of health systems have become key objectives. Health systems must be made more resistant, expanded and intensified. Recent studies by the European Parliament such as “EU Public Health Policies: State of play, current and future challenges” (September 2019) emphasise the areas for action in global health policy. The Union’s fourth health programme (EU4Health) also expressly focuses on cooperation with third countries on the theme of global health and underlines the importance of “health in all policies”. The role of the EU in health policy is currently being challenged by the covid-19 pandemic. Moreover, Brexit means that the EU internally has less money available for global health cooperation. In 2016 Great Britain provided around 12% of the EU budget for public development aid . In addition,

BMG press release, Spahn: “Setzen uns für handlungsfähige WHO ein”, 7 October 2020.

Strategy for healthcare industry

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London’s strength in negotiations on health policy has been removed and joint health research has to be renegotiated. As Eurostat, the database Global Health Expenditure and the recent European health report of the World Health Organisation (WHO) 31 show, there are considerable differences between EU countries in terms of the financing and quality of healthcare . Measured by state spending on the health of its population, Germany is in second place behind France at around 11% of gross domestic product; bringing up the rear is Romania at just over 5% (situation in 2018) – comparable with Kenya and Myanmar. Health inequalities within the EU contradict its credibility and capacity for action vis-àvis the outside world in this area 32. The fact that health is still not regarded as an excellence sector was underlined once more when the area of health was allocated by EU Member States far fewer resources than proposed by the European Commission in the EU’s multiannual financial framework and in the recovery programme, even in the midst of a pandemic 33. Only a few countries have already developed their own global health strategies . Great Britain took the lead here in 2008. In 2013, the Federal Government published a preliminary plan with “Globale Gesundheitspolitik gestalten – gemeinsam handeln – Verantwortung wahrnehmen”. In 2018, global health policy was highlighted as a political priority of the 19 th legislature period in the CDU/CSU and SPD coalition agreement. Also in 2018, GHA – German Health Alliance, a BDI initiative – was invited to coordinate the Federal Government’s preliminary plan for German business . In October 2020, the Federal Cabinet adopted the Federal Government’s global health strategy “Verantwortung – Innovation – Partnerschaft: Globale Gesundheit gemeinsam gestalten” 34 . In concrete terms, in future the Federal Government wants to combat cross-border health risks, strengthen health systems, develop intersectoral cooperation and support global health infrastructure. The strategy places a particular focus on WHO. The healthcare industry welcomes this initiative, even though it would have wished for more intensive involvement of industry in the Federal Government’s strategy-setting. Bilateral cooperation on the theme of health makes an essential contribution to the realisation of global health and enables early and intensive alliances, and also strengthens work in multilateral forums. It is a happy situation that this health diplomacy and cooperation is to be driven forward, also with the BRICS countries. However, what is still missing here is a commitment to a multifaceted structural dialogue which propels an ambitious market access policy and cooperation on health-relevant innovation and trade themes in G20, WTO and WHO as well as an approach of learning about each other, e.g. in the area of promoting digital technologies and innovation-friendly business support. In April 2020, former US President Donald Trump announced the suspension of membership dues to WHO. As a result, the organisation lost its largest contributor in the midst of the corona crisis. Previously, around 553 million US dollars flowed into WHO’s two-year 2020-2021 budget, which totals 4.8 billion dollars. The newly elected

WHO: European health report 2018 – More than numbers – evidence for all, 2018. SWP-Aktuell, Susan Bergner / Maike Voss, Globale Gesundheitspolitik der EU, March 2020. In May 2020 the European Commission proposed a health programme with a budget of 9.4 billion Euro, however, this was reduced to 1.7 billion Euro during negotiations with EU Member States in May 2020. 34 Federal Government’s strategy for global health, < https://www.bundesgesundheitsministerium.de/fileadmin/Dateien/5_Publikationen/Gesundheit/Broschueren/GlobaleGesundhei tsstrategie_Web.pdf>. 31 32 33

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Democratic US President Joe Biden effected an immediate return to WHO on taking office in January 2021. Germany is one of the largest donors among WHO Member States, in the form of both obligatory contributions and voluntary payments to the organisation. Germany’s role is important, but, as a responsible player at international level, the EU as a whole must also strengthen the position of WHO. The EU can do this in particular also through a strengthening of health policy strategies in its external policy relations – not only in international forums but also at bilateral level. The corona crisis shows that many needs cannot be covered with normal market mechanisms. Developing and emerging countries in particular face great challenges . In addition, the current corona pandemic shows clearly the interdependence between health and security. At the present time, other infectious and chronic diseases are being neglected with an increase in the number of cases (e.g. increase in hepatitis E in Namibia), massive social problems and attacks. The worldwide vaccination campaign currently being prepared will increasingly raise logistical and procedural security questions.

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Global health must be pushed more into the focus, the necessary framework conditions created and financial resources made available. The design of health policy must be understood worldwide as a cross-industry and cross-societal interest and hence be placed at the very top of the policy agenda. Since successes in global health policy can usually only be measured after the passage of time, continuity is of decisive importance. At both European and global level, expectations are increasing on Germany to make a contribution to maintaining and expanding global health infrastructure. This arises from the USA’s rejection of multilateralism and, to a certain extent, also from the departure of the United Kingdom from the EU, whose withdrawal leaves a financial and policy vacuum which can be filled by established players such as Germany or France but also upcoming players such as China. In future, international negotiations will be dominated by themes linked to prevention and management of heath crises. It will be Germany’s responsibility and task to bring access to and functionality of needs-based and resilient health systems to the negotiating table, because only in this way can health crises be managed and the standard care offer be maintained in the long term 35. The theme of resilient, global supply chains needs to be addressed energetically in bilateral and multilateral forums, more particularly now in this period of corona crisis and the threat of recession. It is important here to strike the right balance between care policy and the far-sighted economic policy which is essential to achieve innovation, jobs, prosperity and individual well-being. Germany and the EU must work against national and protectionist tendencies resolutely and jointly with the BRICS countries, important partners in the international alliance. Hence, the work of G20 must be aligned

Susan Bergner / Maike Voss: Deutschland als Akteur in der globalen Gesundheitspolitik, 6 November 2020, <https://www.bpb.de/apuz/weltgesundheit-2020/318308/deutschland-als-akteur-in-der-globalen-gesundheitspolitik>.

Strategy for healthcare industry

accordingly such that protectionism and nationalism are identified as accelerators of the worldwide recession and instead: - 1. innovation and digital health economics are promoted, - 2. trade rules and technical standards are reviewed, further harmonised and generally strengthened in multilateral forums, and - 3. if international and regional public reserves are envisaged for particularly essential pharmaceuticals and medical products as a buffer for security of supply, they should be coordinated and developed in cooperation; in this context, business is willing to provide its expertise in supply chain management in order to increase the probability that these reserves are planned in a way which reflects the realities of supply chains.

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In the definition of criteria for the planned review of the objectives of the Federal Government’s global health strategy as well as in the 2025 mid-term evaluation of results, the healthcare industry must also be involved. Because only then can the perspective of industry be incorporated and the partnership approach described in SDG 17 be genuinely implemented. In this way, the objectives currently formulated in generally very abstract terms can define better intermediate targets, criteria and promotion measures geared to the needs of players which want to make a contribution to global health. To achieve the health-related objectives of the UN SDGs, national, multilateral and bilateral efforts must complement each other. Germany and the EU should assume a leading role by working for these objectives together in WHO, G20 and WTO. Moreover, health-policy themes should be given a high-ranking position in important bilateral relations. Central themes for the multilateral level are: strengthening of health systems and universal health coverage, pandemic prevention and reaction as well as coordinated research efforts, but also supply-chain and trade-related measures as well as digital health and development cooperation on health. Digitisation in the health sector should be driven forward at multilateral level: digital health solutions can improve patient care in terms of outcomes, access and costs . Furthermore, the covid-19 pandemic has shown that digital health measures can replace and enhance existing pandemic reaction measures. The BDI-GHA position paper “Sino-EU and Sino-German Cooperation in Health How to Unleash the Health Care Sector’s Full Potential for Health and Wealth” advocates ten central incentives for a joint digital agenda at global level 36. Effective pandemic prevention and reaction as well as containment strategy can only be planned and coordinated internationally. To this end, health-related measures must be strengthened in the framework of G20. G20 und WHO are the keys to the promotion

BDI/GHA position paper: Sino-EU and Sino-German Cooperation in Health How to Unleash the Health Care Sector’s Full Potential for Health and Wealth, August 2020. 36

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of coordinated pandemic control, bearing in mind all trade barriers affecting international supply chains such as customs, export restrictions and border checks which unintentionally lead to disruptions in trade and supply chains . Strengthen health as an area for cooperation in bilateral relations and in development cooperation: health is predestined for closer bilateral cooperation and – together with simultaneous development of the multilateral commitment – should in future be taken into much greater account as an area for cooperation with selected countries – in particular via a structural dialogue as well as high-level cross-sectoral discussion and work formats for the health economy and healthcare. It is therefore a happy circumstance that the Federal Government’s global health strategy also deems the BRICS countries to be particularly important alliance partners in the multilateral forums and for the shared goal of global health. For the important market, partner and competitor China, the recently published BDI-GHA position paper 37 formulates more than 60 recommendations for policy action in areas such as intellectual property, market authorisation, procurement and digitisation. In this regard, EU-Chinese relations are of particular geopolitical importance. In addition, the health-policy agenda in the EU-Africa strategy is important. Health should be highlighted in German development cooperation with a strong focus on strengthening health systems once more as a real priority: the current number of just ten countries with a health priority in development cooperation should be greatly increased. The Federal Government’s endeavours for stronger cooperation ventures in the area of health with priority countries in Africa are laudable and should also be further developed with public-private partnerships (PPP). The health industry is prepared to input its expertise and is available as a partner here .

Research and innovation Background: Germany is no longer European champion With the participation of 499 industry-initiated clinical pharmaceutical studies, in 2019 Germany was in fifth place behind the USA (2,352), China (600), Spain (519) and Great Britain (516), but ahead of Canada (463). Hence, Germany is once more a country that is highly valued as a location for studies for research enterprises in the health sector. But it is quite a distance from its position until a few years ago as European champion and second worldwide 38.

BDI/GHA position paper: Sino-EU and Sino-German Cooperation in Health - How to Unleash the Health Care Sector’s Full Potential for Health and Wealth, August 2020. 38 vfa on the basis of the study register, Clinicaltrials.gov, as at August 2019. 37

Strategy for healthcare industry

Clinical research

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In particular through BMBF promotion programmes such as the coordination centres for clinical studies (KKS), clinical study centres as well as health research centres, it has been possible to help strengthen the competitiveness of Germany as a study location. To this is added that timely, objective and scientifically substantiated authorisation of applications for clinical trials by the federal authorities has been taking place since 2004. And the system for evaluation of multicentre studies with a lead ethics committee, also in place since 2004, has very broadly proved its worth, even if improvements to the details are necessary. From 2007 to 2016, Germany occupied the leading position in Europe and second place worldwide behind the USA in the number of industry-initiated clinical trials as well as the number of clinical trial centres. International competition between study locations has now sharpened markedly: thus, Germany again fell back to third place behind Great Britain for industry-initiated clinical studies. In 2019, it slipped even further back to fifth place behind China and Spain 39. Despite some positive basic conditions in the study location Germany, there is a need for action with regard to international competitiveness. In the promising area of cell and gene therapies and pharmaceuticals for novel therapies, there are still obstacles to innovation promotion in the EU . Whereas market authorisation is organised EU-wide through the EU ATMP regulation (1394/2007), a regulatory disadvantage subsists in the area of clinical studies vis -à-vis third markets such as the USA and China in that it has still not been possible to approximate all necessary conditions linked to authorisation, ethics and data collection and use. And research can only succeed specifically in the area of gene therapies if the few available data can be used more efficiently EU-wide. An EU-wide data space together with uniform regulatory provisions is needed for this, and can be promoted . Particular challenges for cell and gene therapy research currently exist in the use of blood and cell material as well as in the evaluation of GMOs (genetically modified organisms): 1. The EU regulation on clinical studies has not yet entered into force. The clinical study portal and the associated EU database have not yet been fully created . 2. The European blood, tissue and cell directives (2002/98/EC and 2004/23/EC) do too little to harmonise, and lastly 3. GMO provisions are still regulated on a country-specific basis. A decisive element will be the extent to which the EU pharma strategy will in future harmonise this.

Vfa position paper: Forschungs- und Biotech-Standort Deutschland, August 2020.

Strategy for healthcare industry

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It must be the shared goal of policy-makers and business to make Germany once more the number one destination in Europe for studies and research . A range of locational factors determine where R&D facilities are developed or newly constituted. Alongside a good infrastructure, these also include excellent cooperation partners such as universities or other research institutions and highly qualified workers . Also essential is the possibility to access guidance discussions rapidly, prompt processing by authorities of the applications needed for animal tests, clinical studies and medicine authorisations. Acceptance of medical research and innovative medicines among policy-makers and the population also plays an important role. For some of these factors, countries such as the USA and Singapore score much better than Germany. Ground-breaking active substances in numerous areas of application have come out of research laboratories in Germany. Vaccines against covid-19 are also the result of local research. Innovations such as these have hitherto repeatedly strengthened medical research in Germany but also in other countries. Healthcare industry enterprises are in favour of Germany further developing its importance in the area of preclinical research and also in particular of clinical development.

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Germany is well placed for rapid and pragmatic adaptation of national rules for clinical trials to the EU regulation on clinical trials. This will probably be implemented from the end of 2021, will be directly applicable in all EU Member States and will hence create consistent harmonisation of requirements. The new procedure was tested in practice in a pilot phase by the Federal Institute for Drugs and Medical Devices (BfArM) and a number of ethics committees. This shows that Germany is broadly well prepared for the new system. It would be desirable if the Paul-Ehrlich-Institut were also to input more strongly into this pilot phase. It was problematic in Germany that for many years the Federal Office for Radiation Protection (BfS) had no procedural deadlines for the authorisation of clinical trials for which the German x-ray/radiation protection decree comes into play due to companion diagnostics. This has led to many firms no longer even applying for such studies in Germany – to the detriment of patients and doctors/hospitals. The revision of radiation protection rules in mid-2017 came into force in early 2019 and has effected fundamental improvements, e.g. deadline rules or a notification procedure. The practical consequences from the first year of application of these new rules broadly show a positive picture; deadlines are met, sometimes ahead of time. Nevertheless, it would be useful to incorporate the BfS procedure in the regular approval procedure for clinical trials by federal authorities and to scrap a disconnected procedure with BfS.

Strategy for healthcare industry

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Permitting authorities should be given more human resources so that waiting times for guidance appointments and study authorisations can be further reduced. The requirements of ethics committees in the evaluation procedure should be further harmonised. Against the background of the upcoming EU approval procedure for clinical trials, this is of particular importance. The continued existence of fragmented rules within Europe (EU GMO interpretation) impedes the performance of Europe-wide studies in both basic and clinical research: thus, in Germany the use as well as the import of embryonic stem cells has to be authorised by a central ethics committee in conjunction with the in Robert-Koch-Institut (RKI). The healthcare industry would welcome it if the Federal Government would work here with determination towards rapid publication of the rules within Europe in order to strengthen the continent vis-à-vis the USA and China. A problem area in Germany is the fragmentation of the requirements on data protection in the framework of clinical trials. Other countries have clear made stipulations and have regulated these issues in a uniform manner. In Germany, by contrast, the 16 regional authorities are creating difficulties and have not so far managed to define clear and uniform stipulations. This leads to problems among applicants for clinical trials, but also for ethics committees which are supposed to verify data protection cursorily on the basis of consent texts for patients. A clarification is urgently needed here or a uniform, country-wide law governing protection of medical data should be created. A locational disadvantage is the fragmentation into small study centres. Admittedly, this is an advantage for the patient thanks to the short distances, but creates problems for the implementation of clinical trials since this leads to a markedly higher effort, e.g. in setting up studies, monitoring/quality assurance or logistics. This is also a factor in the number of patients often being smaller per study centre on an international comparison. It should be explored here whether an improvement can be brought about through interlinkage of study centres without losing the advantages for patients. Drawing up contracts with many different study centres ahead of carrying out a study is also often long-winded and difficult, especially where the individual locations also make very different demands. Standard contract clauses for a number of fundamental substantive points have now been agreed between industry and the conference of medical faculties (MFT) and with the association of German university clinics (VUD). They were published in July 2019. The effect of their application remains to be seen. Nevertheless, it can be seen that not all academic centres are receptive to these standard contract clauses. It would therefore be important that these standard contract clauses are applied widely by all parties and, if necessary, even made obligatory by law as in France or Spain or that a nationally coordinated and uniform procedure for drafting contracts in introduced in the centres as in Great Britain (“one trial – one contract”; valid for all NHS centres). The readiness to participate in clinical trials should be further increased; this should be understood and jointly addressed as a shared task for policy-makers, patient associations and healthcare industry enterprises. Although most clinical trials in the EU initiated by firms are carried out in Germany, there is still potential in terms of the number of clinical trials per capita. Despite the high absolute number of clinical trials, Germany falls clearly behind other locations in the EU such as Poland, Belgium or Denmark in terms of patient numbers. One possibility would be information events in the framework of the International Clinical Trial Day, which is held annually on 20 May.

Strategy for healthcare industry

Figure 2: Society’s openness to innovation, in Innovationsindikator 2020

3 9F39F

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Openness to innovation describes the attitude to innovations, access to innovations as well as demand for innovations. Awareness and understanding of innovations and their importance characterises a country’s openness to innovation and innovation culture 41. Germany is the “country of ideas”, a high-tech country, and its economic strength is determined to a decisive extent by innovative capacity. On an international comparison, Germany takes a back seat in terms of openness to innovation and, according to Innovationsindikator, occupies a leading position in not one single category (see Figure 2)42.

Innovationsindikator 2020: <http://www.innovationsindikator.de/fileadmin/content/2020/pdf/Innovationsindikator_2020kompakt.pdf>. 41 Abstract concept of innovation, for other concepts of innovation see J. Hauschildt in: W. Hoffmann-Riem/J.-P. Schneider (Hrsg), Rechtswissenschaftliche Innovationsforschung, 1998, page 29 et seq. 42 BDI, Fraunhofer, ZEW: Innovationsindikator 2020, February 2020.

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Products of the healthcare industry offer scope for qualitative growth. For researchintensive products, it is important that they are not only developed in Germany but also produced through settlement of future production chains in Germany and Europe, and hence come into application more rapidly. For export success, successful application in the reference market of Germany is essential. The digital transformation as a megatrend of innovation targets individual, precise and preventive healthcare, the need for which is undisputed against the background of demography, health awareness and affordability. Implementation calls for defined subtargets in a strategic and health-policy context such as the discussion on access for company research to health data as well as promotion of providers of innovative (digital) health solutions.

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Innovations make contributions not only to qualitative improvement of care but also to cost saving in the health sector. This rationalisation potential must be realised urgently to the benefit of citizens. Research and innovations should be promoted in order to maintain and develop positions on the world market. Because Germany can assert its strong position in international competition only if it continues to create the necessary framework conditions as a “country of ideas” in order to be able to develop tomorrow’s products today.

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Structural, innovation-oriented improvements in healthcare, use of and access to diagnostics, interlinkage of lead technology centres with outpatient, conveniently situated care including coordination of complex patient pathways (see BDI Digital Health Initiative’s Digital Patient Journey Oncology 43 ), combating resistance to innovations caused by false economies in therapy management. Excellent basic research is essential for healthcare industry and in particular for the chemical/ pharmaceutical industry. Universities should therefore be given more financial resources. The possibilities for qualified training of active professionals must be expanded. Entrepreneurship is currently hardly present in school and university education. There is untapped potential here to improve the image of the entrepreneur in society. Create better conditions for attractive scientific education and for entrepreneurship; a systematic curriculum for sciences, technology and information technology should be

BDI Digital Health Initiative: Digital Patient Journey Oncology, October 2019, < https://bdi.eu/publikation/news/digital-patientjourney-oncology/>.

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introduced in primary school and continuous, high-quality and practical STEM learning (science, technology, electronics and mathematics) should be ensured at higher school levels. Thought should also be given to educational offers in the areas of programming and communication of promising technologies (e.g. AI, blockchain). The link between theory and practice or basic and applied research should be strengthened – starting with a positive mindset for entrepreneurship in schools and universities, which also requires stronger cooperation in education projects. Create a can-do culture, curiosity and risk-taking, in other words a culture of enterprise and ambition which makes business creation and successful development of businesses more attractive to society; failed entrepreneurs must be given a second chance. Enterprise personalities found start-ups, pass on innovation and value creation know-how and establish forward-looking work and business models. Infrastructure conditions must be created for this such as a functioning financial ecosystem which provides the necessary risk and growth capital. Technology-oriented business creations as well as technological developments of strategic industrial importance (e.g. bio-economics) are an important engine for renewal and growth in Germany. It is good that the federal and regional levels are developing their promotion for the pre-creation and business creation phase, and have implemented the overdue reform of corporation tax legislation. However, it has not yet been sufficiently successful in reinvigorating the market for growth capital. The ten-billion fund for the future must be pushed courageously forward to stem the tide of innovative pioneers turning their back on Germany. Alongside digital themes, the fund and the measures it comprises must also take into account the needs of young, innovative businesses, develop the materials and substances and meet the high capital needs associated with long lead times. Similarly, the fund should support upscaling of technologies and their commercialisation for the development and expansion of national production on an industrial scale. Universities need more support (financial and know-how) in building business creation assistance points – which must be networked with financial sponsors and industry if business creations are not to remain university start-ups in the long term. Strengthen the innovation culture in German industry: Healthcare industry evolves constantly like no other business sector due to new developments – that is simultaneously a driving force and selection procedure for our sector . For this, we need innovative knowledge-intensive business creations which create new markets as industrial start-ups, conquer their place in existing industrial value creation chains or develop them innovatively. But we also need established industry. It is ahead of start-ups in terms of experience, knows how to produce, asserts itself on markets, wins customers and grows successfully. The bottleneck in innovative capacity lies in rapid implementation, i.e. rapid translation into scale – this also applies in particular for the area of health. What is needed to intensify and accelerate the translation process is targeted promotion through a stimulative and supportive research environment and improvement of the innovation policy framework conditions along the entire value creation chain . Consistently pursue high-tech strategy: the Federal Government’s high-tech strategy should be linked into a cross-departmental innovation policy. To maintain the level of German research, adequately financed and broadly base promotion programmes are important – also in the framework of the European “green deal”. They should also take

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into account the specific interests of SMEs. Moreover, cross-departmental experimentation and innovation areas should be promoted. Introduce an innovation check in legislative impact assessment: political framework conditions should not make innovations more difficult or even prevent them (e.g. digital health applications in the context of MDR). Instead, existing and future rules should be verified against an innovation benchmark. In the national and European context, regulatory sandboxes play a great role. With their help, research findings can transit rapidly into application and adjustments to the regulatory framework can be tested and subsequently implemented. In future, this must also be enabled outside the tight straitjacket of state aid rules . Regulatory sandboxes and experimentation areas have great potential and should be continuously further developed. In the framework of the German Council Presidency, the 27 Member States agreed common Council conclusions on regulatory sandboxes and experimentation clauses with concrete steps for promotion in 2021. These conclusions should continue to fuel the political discussion targeting a more innovation- and test-friendly policy for Germany and Europe.

Strategy for healthcare industry

Figure 3: Expenditures by Federal institutions as % of GDP 44

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44 45

Research location Germany exhibits many strengths which are of great importance for healthcare industry. Nevertheless, investments are needed in order to keep up in international competition. Unlike in Anglo-American countries, largely missing in Europe is the financial ecosystem for innovation financing through private risk and growth capital or venture capital. Whereas R&D investments in the EU increased by 450% between 190 and 2017, they climbed by 800% in the USA over the same period . 25% of all new pharmaceuticals originate in Europe, but 47% originate in the USA. As recently as 25 years ago, the figures were the other way round 45. This trend can only be reversed with a targeted industrial policy coupled with innovation promotion .

Prepared in-house on the basis of OECD and VCI. vfa, Den Schutz geistigen Eigentums bewahren - Pharmastandort sichern, version 15 June 2020.

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Important development centres for technologies of the future such as cell and gene therapies are currently located primarily in the USA, China, Israel and the United Kingdom. In all these countries, interlinkage with excellent research institutions, funds and provision or promotion of venture capital is strongly supported. According to studies, the market for cell and gene therapy will be approaching 12 billion US dollars in the USA in 202546. The Chinese research environment is similarly promising: In 2018-2019, the Chinese Government extensively reviewed the regulatory environment for cell and gene technology and created the promotion environment. Hence, in mid-2020 a picture emerged in which more than 1,000 clinical studies were carried out, patent applications were lodged and more than 45 local enterprises had already notified development pipelines. Foreign, multinational enterprises are also investing in this highly promising development environment 47. Europe has fallen behind, but it is still possible to anchor Europe as an investment location in the international vanguard. In cancer research, which is so important for Germany and the EU, the deficit in innovation promotion is particularly clear: at European level, measured against the number and scope of publications and clinical studies, just two of the world’s 30 most important research institutions for cancer research are established in Europe (Karolinska Institute & Hospital/Sweden, 24th position and the German cancer research centre (DKFZ)/Germany, 28th position) 48 : On a similar ranking, while Germany has excellent clusters for basic research, it still lacks in particular access to venture capital, translation of results and interlinkage of research centres in Europe. With introduction of the research bonus, in 2020 Germany took a step which has long been under discussion with a view to moving closer to the practice of importance industrial countries in the area of R&D promotion (27 out of 34 OECD States already have promotion of this type). In the years ahead, a bonus of one million Euro will be collected. This time-limited doubling of a bonus previously limited to a maximum of 500,000 Euro was an important next step which we welcome. Yet this maximum total amount of one million Euro applies only for all enterprises which are regarded as associated businesses in accordance with § 15 German companies act (AktG). For larger companies especially, this R&D promotion through the tax system is therefore only marginal. In the area of spending on education, Germany is towards the back of the class on an international comparison (see Figure 3). But anyone wishing to play in the top league needs very highly trained scientists, engineers technicians and skilled workers.

Deloitte Insights: Winning in the cell and gene therapies market in China, May 2020, < https://www2.deloitte.com/us/en/insights/industry/life-sciences/cell-and-gene-therapy-and-chinas-precision-medicineinitiative.html>. 47 Deloitte Insights: Winning in the cell and gene therapies market in China, May 2020, < https://www2.deloitte.com/us/en/insights/industry/life-sciences/cell-and-gene-therapy-and-chinas-precision-medicineinitiative.html>. 48 FAS Research: Zentrum oder Peripherie? Europas Stellung in der globalen Forschungslandschaft – eine Netzwerkanalyse am Beispiel der Onkologie. Vienna, 2020.

Strategy for healthcare industry

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Public research and industry should work together even more intensively . A central and proven element of cooperation is the joint research project. These projects should be given targeted support and further developed, in particular through application-oriented and non-bureaucratic award procedures. The aim must be to generate a larger number of exploitable results. Germany and Europe must benefit as business locations from excellent basic research . It is important to establish local value creation and to strengthen technology transfer, as already set out in the coalition agreement.

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Increase expenditures and improve tax breaks for research: the political objective of increasing the share of R&D spending in GDP to 3.5% by 2025 is absolutely necessary . To this end, the Federal and regional levels must not only reach their share of one third but also improve the framework conditions for private research and innovation thr ough their research promotion instruments and the budget resources earmarked for this purpose such that enterprises also have an incentive to increase their investments in Germany. Alongside research promotion, it is important to highlight the effects of so-called “cost compression” laws for a location seeking to optimise its innovative strength (e.g. compulsory rebates and price moratorium for pharmaceuticals or tapered fixed-cost reductions for medical products). For example, financial resources for new innovations elsewhere are lacking due to reduced revenues as a result of compulsory pharma rebates 49. Enhancing the efficiency of promotion procedures: promotion processes can be longwinded and difficult to understand. Possible solutions: - Applicants must be better prepared in order to ensure that projects deserving support do not fail because of technicalities. - Harmonise promotion procedures of different government departments . - Create a possibility to propose promotion applications which are not accepted in a European procedure for national support with only minimal modifications . - The manner of awarding and administering European financial support must be structured more efficiently and supplemented by more innovative procedures . For many years, complaints from project applicants about costs and complexities when applying for European R&D resources have been addressed with only gradual changes. The current timeframe for application submission through to

Markus Schneider, Thomas Krauss, Aynur Köse: Die Entwicklung der Pharmazeutischen Industrie in Bayern – Standortanalyse 2015. BASYS-Beratungsgesellschaft für angewandte Systemforschung, Augsburg, 2017; published in: RPG, volume 23, issue 2/2017, pages 67-79. 49

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conclusion of contract as well as statistically poor prospects of a successful application contrasts with ever more rapid innovation cycles and the need to be flexible. A first step should be to shorten the route from application to approval to less than 50 days. New methods such as remote evaluation procedures should be brought in for the evaluation of all award procedures. Furthermore, more use should be made of digital technologies in order to accelerate decision -making – clearly, always ensuring proper use of public resources. Because a transparent and correct selection process of the best project proposals is and remains essential. The EU pharma strategy recognises the opportunities offered by forward-looking and novel therapies such as cell and gene therapies and sees the need to make the regulatory environment fit for the future accordingly 50 . But, alongside a uniform regulatory environment and development of EU-wide databases, these technologies also need to be supported financially. Investment funds but also the promotion of risk capital at German and European level are indispensable for this. Along the lines of DKFZ, an excellence institute and research centre should be established which promotes a comprehensive examination of medical, production and social issues linked to new forms of therapy such as gene and cell therapies and acts as a scouting agency/accelerator for start-ups in this area. The excellent German research landscape can in this way be enriched through leading institutes for cell and gene technology and existing institutes for cell therapies can be further developed accordingly. At the same time, a platform should be established on which start-ups, large clinical and scientific centres as well as industrial enterprises can interlink with each other. This will make the location even more attractive for excellent researchers. In addition, thought should be given to a European research excellenc e programme or centre in the framework of the EU pharma strategy. The financial strength of German hospitals must be extended in order to increase their contribution to innovation location Germany. Investments by Germany’s Länder, refinancing and financial rewards for “Scientific Physicians/Clinical Scientists” are too low. In this regard, the current stimulus programme (“future programme hospitals”) is just a first step. Not only must cross-sectoral care be mapped consistently in terms of organisation and remuneration but digitisation of hospitals and rapid and efficient data exchange must also become part of the basic structure for promotion of healthcare industry innovations in the inpatient sector. Reinforced promotion of spin-offs from universities and research institutions.

European Commission: Pharmaceutical Strategy for Europe, November 2020, < https://eur-lex.europa.eu/legalcontent/EN/TXT/PDF/?uri=CELEX:52020DC0761&from=EN>.

Strategy for healthcare industry

Access to the capital market

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Research and development in the healthcare industry is costly, not least because of high regulatory requirements. Research-intensive business models in healthcare industry often call for own capital investments (venture capital, corporate venture) because they have no access to outside capital (e.g. loans). Venture capital investments are an indicator for the availability of financial resources for young businesses in order to finance innovations and growth. Increasing and attracting venture capital is worthwhile: the example of Israel shows that a massive increase in venture capital (up to 85% in early financing rounds) pays off for strengthening and establishment of sectors of the future 51. Company creations transform research results into market applications. This applies for start-ups from universities and research institutions as well as for innovation -oriented business creations from existing enterprises (so-called “corporate spin-offs”). Start-ups often lack the human resources to deal with unwieldy grant applications. At the same time, approval of applications is made more difficult by requirements which start-ups find it hard to meet so that promotion programmes are sometimes not taken up in full.

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Successful innovation and industrial business creations require adequate financial resources. Public support programmes are important, but are not sufficient. Germany must become more attractive as an investment location for venture capital. For effective financing, tax, legal and regulatory obstacles need to be dismantled 52. Learning from other countries: in the USA, China or Israel, the availability of venture capital is more self-evident and is promoted more strongly. What strategies and political framework conditions does this call for? What are the success stories we want to learn from? Which cooperative ventures are profitable? Here, too, health should be placed higher and more comprehensively on the bilateral relations agenda as a theme for cooperation. Partnerships between cities and health, biotechnology and digitisation clusters are also an important area for thinking and learning .

Deloitte: The Israeli Technological Eco-system – A powerhouse of innovation, < https://www2.deloitte.com/il/en/pages/innovation/article/the_israeli_technological_eco-system.html>. 52 BDI position: Wachstumsfonds für Deutschland – Ein Modell zur Stärkung von Startups und Innovationen, December 2020. 51

Strategy for healthcare industry

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Ensuring an adequate share of start-ups in awards of promotion resources. Rapid commercial exploitation of research results constitutes an important pillar of a society’s innovative strength. “Breakthrough” innovations must be made market-capable within a globally competitive timeframe. Financial support for first projects in the market environment: in terms of customer acquisition and market establishment, financially intensive projects often constitute a great risk and a challenge for procurement of suitable prefinancing tools, not least for deep-tech start-ups (inter alia chemical and biological technology). These tools can be obtained via venture capital funds, but this has proved to be fairly long-term and complex due to the German mentality vis-à-vis venture capital. Prefinancing of customer acquisition and market introduction projects calls for a high level of financing expertise on the part of company directors and the involvement of various financial partners such as so-called business angels and venture capital (VC). In addition, business angels can make an essential contribution through their experience. They should be more closely involved in support programmes. A great deal of capital is available in Germany and in Europe and is looking for investment opportunities. Insurance companies, pension funds and private individuals can help to strengthen innovative strength by making capital available on a large scale . Possible strategies are: - Creation of suitable capital muster points (e.g. the planned future fund). - Introduction of advisory service offers to provide start-ups with a sustainable business model so that they do not disappear again once the priming finance comes to an end. - The core idea consists in to use the high cashflow in the economy generally to shape and hence secure the future. This is implemented to support young, innovative enterprises through the following models: Norwegian innovation fund (profits from natural gas and mineral oil 53, Australia’s Future Fund (collection of export surpluses) 54, US sickness insurance funds 55, Calpers (California Public Employees’ Retirement Scheme) with a volume of 300-400 billion US dollars 56, TIAA (Teachers Insurance and Annuity Association of America) 57 , Swiss Entrepreneurs Foundation (Stiftung für einzelne Jungunternehmen) 58 and the Danish fund model 59. - Incentives for investment in Venture Capital (VC) / risk capital – stimulation of the venture capital market by working up the long-term opportunities of investments in start-ups: the framework conditions for venture capital need to be further

Innovation Norway: <https://www.innovasjonnorge.no/en/start-page>. Australia’s sovereign wealth fund: <https://www.futurefund.gov.au/>. 55 Kaiser Permanente’s Division of Research: <https://divisionofresearch.kaiserpermanente.org/>, McKesson Ventures, BlueCross BlueShield Venture Partners: <https://medcitynews.com/2015/10/mckesson-blue-cross-top-digital-healths-mosttrusted-corporate-vcs/>. 56 CalPERS' Private Equity Program: <https://www.calpers.ca.gov/page/investments/asset-classes/private-equity>. 57 TIAA: <https://www.tiaa.org/public/>. 58 Swiss Entrepreneurs Foundation: <https://www.handelszeitung.ch/digital-switzerland/swiss-entrepreneurs-foundation-mitpromi-stiftungrat>. 59 Dansk Vækstkapital: <http://www.danskvaekstkapital.dk/>. 54

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improved so as to retain capital-intensive spin-offs and start-ups in life sciences in Germany also in the subsequent scale-up phase. - Enable investments: full depreciation of the labour costs for demo and pilot installations over the entire project lifetime, deductible from the tax base of commercial enterprises. In the case of commercial onward use of demo and pilot installations with a residual value after the project ends a pro-rata repayment could be foreseen. BDI argues in favour of a growth fund. Since market economy mechanisms alone have not led to a satisfactory outcome and smart investment activity by the State is one of the steering aspects of our social market economy model, we propose a new Germany growth fund. What Germany can advance here is a large fund which makes venture capital available in sufficient quantity 60.

Background: through cooperation to the Nobel prize Cooperation between science and research in particular is important to reach joint results. Of the last 50 Nobel prizes for physiology or medicine, 45 have been awarded to more than one researcher. That shows that medical research is networking worldwide in order to work on new methods and research results.

Cooperation in the area of research and development

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Research is the driving force for progress, innovative capacity and development in the health industry. In this regard, the spectrum of research disciplines (e.g. medical technology, pharmacy, biology, biotechnology, information technology, etc.) is greater than almost anywhere else and interdisciplinary cooperation is therefore ever more important. For this, new forms of interdisciplinary cooperation are needed. So that research and development can unfold more rapidly and more efficiently, and innovations can provide care and reach the patient promptly, a change in thinking is needed . Targeted transmission of knowledge from university and non-university research in the health sector is a precondition for a sustained increase in the growth and innovation potential of industrial location Germany. Cooperation between research and academia,

BDI position: Wachstumsfonds für Deutschland – Ein Modell zur Stärkung von Startups und Innovationen, Dezember 2020.

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also in the framework of PPPs, is indispensable to realise the application potential of academic ideas to the full. The involvement of clinical centres play a central role here. The multiple international and German support initiatives such as Coalition for Epidemic Preparedness Innovations (CEPI), Innovative Medicines Initiative (IMI) or the development of university medicine research networks are highly promising approaches. However, they are not sufficient on an international comparison. Because the interlinkage of the US as well as of the Asian research community is clearly higher than that of European research institutions. Considerably more financial and structural support for public and public-private research cooperation projects is needed here.

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Through targeted support for the network structure between research and health sector, in particular in the form of cluster formation, accelerator and incubator programmes as well as development of innovation ecosystems, research and industry location Germany can also be sustainably strengthened for life sciences. In the wake of digitisation and new authorisation provisions (e.g. MDR/IVDR or reimbursement of DiGAs), research in the health industry face change and new challenges. Through MDR/IVDR, requirements on the generation of clinical data and their evaluation for CE labelling are increasing. In addition, the significance of data in health research is changing. Hitherto, various diagnostic procedures, technical medical equipment and pharmaceutical substances have been in the foreground. The focus is increasingly on interlinkage, on the basis of large volumes of data. New cooperation projects between developers and users are indispensable, not least because of the changes described.

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Matching between different research disciplines from private and public spheres should receive stronger State support. In addition, such cooperation projects between academia and industry should be given targeted support and further developed, in particular through application-oriented and non-bureaucratic award procedures. Scientists in the health industry must no longer worry about whether the development of a product is possible, but also from the outset about how and whether it will be authorised. Because that is the basis for remuneration and is challenging in particular for SMEs and young enterprises with few employees with regulatory affairs expertise. Scientists must increasingly be well informed about different nuances in regulatory requirements and authorisation issues. Special contact points within authorisation authorities could provide a pragmatic response here.

Strategy for healthcare industry

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So that university and non-university research does not focus only on established enterprises, new support instruments and structures should be created to promote technology transfer and the entrepreneurial spirit in the research c ommunity and beyond. The goal should be robust international value creation which makes industry location Germany even more attractive. Furthermore, technology transfer and cooperation projects should be established locally with young and established enterprises alike as a success indicator for university locations and research organisations oriented on innovation. Alongside corporate commissions (third-party resources), cooperation projects between enterprises, academia and clinical institutions should also be given direct State support in order to support technology transfer as a precondition for a constant flow of innovations. Financial support for regional clusters and scientific excellence centres has already proved its worth in Germany and elsewhere. Review professional requirements on public researchers and their participation in public-private partnerships (PPP). Promotion and interlinkage of hubs as well as the corresponding communication flanking for the advantages of such cooperation. Internationalisation of cooperation enabling link-ups with large-scale research networks. Bilateral research dialogue should also be supplemented in order to achieve even stronger interlinkage and promotion of scientific institutions and companies . Thinking beyond national frontiers at an early stage and raising awareness of the excellence of certain support landscapes and clusters so that they can also be promoted in the domestic scientific environment. Concrete research objectives such as the struggle against cancer should also be driven forward in bilateral relations. Ageing societies are a phenomenon which encourages a convergence of interests. In both China and the EU, the struggle against cancer and against other non-infectious diseases has therefore been an important concern in recent political efforts. An exchange on concrete health objectives can help here.

Strategy for healthcare industry

Background: cancer research in Europe

Figure 4: Worldwide top cities for cancer research 61 The German cities of Heidelberg and Munich are among the most important locations for oncology science worldwide. This emerges from the study “Zentrum oder Peripherie? Europas Stellung in der globalen Forschungslandschaft – Netzwerkanalyse am Beispiel der Onkologie” by the Viennese research organisation FAS Research. This shows that, even if North America and China are leaders in cancer research, Europe holds great innovation potential. For their study, FAS Research experts looked closely at more than 88,000 scientific publications and clinical research projects in the period 2013 to 2018. Among other things, this showed that Heidelberg is involved in 2.9% and Munich in 2.3% of the scientific articles and clinical trials examined. They occupy 20th and 29th positions among the 30 most important oncology science locations worldwide. That means that they are flagships not only for Germany but also for

Research organisation FAS Research “Zentrum oder Peripherie? Europas Stellung in der globalen Forschungslandschaft – Netzwerkanalyse am Beispiel der Onkologie”, June 2019. 61

Strategy for healthcare industry

Europe – which is represented in the ranking with a total of eight “top cities for cancer research” (see Figure 4). North America (principally the USA) and China together account for 20 cities in the ranking; (Japan) and Seoul (South Korea) are also on the list.

Figure 5: Oncology research projects by region 62 The FAS Research study shows, taking oncology as an example, that the innovation potential in Europe is on a similar scale to that in Asia (mainly China) and North America (primarily the USA). According to the study, research locations in Europe are still involved in almost 40% of all cancer research projects examined in the years 2013 to 2018 (see Figure 5). In other words, Europe as a whole could achieve a great deal. And this despite the fact that only eight European cities are to be found among the 30 most important oncology research locations (see Figure 4). A particular role for Europe is played inter alia by the German cancer research centre (DKFZ) based in Heidelberg. With over 1,500 scientific publications and clinical studies (2013-2018), it is among the most productive oncology research institutions internationally – alongside prestigious locations such as the US Harvard University. Nevertheless: in the field of cancer research, there is still room for improvement in Germany and Europe. As can be seen from the FAS Research study, there are shortcomings, e.g. in cooperation projects in European networks. Above all, the European ecosystem is characterised by decentralised, national clusters without sufficient strategic intersections. The USA and China are markedly better interconnected – and not only within but also between these two countries. Europe’s potential in oncology has not yet been fully realised. It emerges clearly from the study:

Research organisation FAS Research “Zentrum oder Peripherie? Europas Stellung in der globalen Forschungslandschaft – Netzwerkanalyse am Beispiel der Onkologie”, June 2019. 62

Strategy for healthcare industry

the reciprocal exchange between England, France, Germany, Italy and so on is less intensive than the exchange which each of these countries enjoys individually with the USA. The consequence: good ideas and many new products “leak” from Europe into the USA – where they are exploited economically 63. The policy guidelines of Commission President Ursula von der Leyen show that the urgency of the theme is also recognised at EU level. She states that: “I will put forward a European plan to fight cancer, to support Member States in improving cancer control and care.”64 Cancer is now one of the European Commission’s most important priorities in the area of health. Europe’s Beating Cancer Plan is linked in with the new Commission’s other priorities and is supported by members of the European Parliament and interested parties working together with the Commission on cancer prevention and treatment in Europe. In the framework of the EU “cancer” mission, combating cancer is classified as a major challenge for society. According to the mission area summary, the mission, part of the Horizon Europe programme, seeks to improve prevention and treatment, to save more human lives and to enhance the quality of life for patients and their families during and after a cancer illness. In the eyes of the healthcare industry, digitisation and the use of health data as strategic pillars of innovation in combating cancer must play a greater role. Several initiatives intended to lift data medicine into the foreground in combating cancer are lined up at European level around the European Health Data Space (EHDS), the AI Strategy as well as promotion of supercomputing. .

The mission will start at the end of 2020 with a timeframe of ten years. Between now and 2030, it is intended to help save more than three million human lives through prevention and enable more people to live longer and better65. However, the concrete orientation and governance of the mission are currently still unclear. The mission board and mission assembly are supposed to communicate transparently and only, and hence to involve all relevant stakeholders. .

It is certain: cancer is complex and multifaceted. The struggle against tumour diseases is therefore something that can only be successful on the basis of networks working nationally and internationally.

Research organisation FAS Research “Zentrum oder Peripherie? Europas Stellung in der globalen Forschungslandschaft – Netzwerkanalyse am Beispiel der Onkologie”, June 2019. 64 Ursula von der Leyen: Political guidelines for the next European Commission 2019-2024, July 2019, <https://ec.europa.eu/commission/sites/beta-political/files/political-guidelines-next-commission_de.pdf>. 65 European Commission: Mission area summary – Cancer, September 2020, <https://ec.europa.eu/info/sites/info/files/research_and_innovation/funding/documents/ec_rtd_mission-cancersummary_de.pdf>. 63

Strategy for healthcare industry

Protection of intellectual property

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Intellectual property (IP) is the driver of innovation in Europe and the basis of the researching health sector’s success model. If innovative strength and competitiveness of the German and European healthcare industry are to stand at the centre of Germany’s and the EU’s political eff orts, effective patient protection is decisive. Without patient protection there will be no innovations . And without innovations there will be no new generic medicines. The development of an innovative medicament lasts from the idea through to the first authorisation, around 13 years as a rule. Costs are incurred at a level of around 2.6 billion US dollars on average – on a steeply upward trend in recent years. At the same time, the dropout rate of development projects from the start of clinical studies is almost 90%.66 Reasonable patent validity periods, the use of supplementary protection certificates and data exclusivity are decisive for high investments in development processes which often last years and an adequate return on investment. Restrictions on the protection of intellectual property do not led to better patient care, rather they impede the development of new pharmaceuticals and diagnostics which are needed to identify, prevent, slow down or cure diseases. It is certain that the basis for broad access to innovative therapies is not secure without comprehensive IP protection. IP is not a price driver – on the contrary, it stimulates competition and drives research into alternative therapies for patients. This in turn offers patients additional treatment options and hence increases the quality of healthcare. Simultaneously, the increase in treatment options and hence in the service offer lead to lower pharmaceutical prices . IP smooths the path for cooperation: researchers have an incentive to cooperate only if their intellectual property is protected, i.e. IP fosters research cooperation projects. Patent protection helps innovative enterprises to receive recompense for the high research and development costs during the relatively short amortisation period until the patent expires. Without the period of patent protection, it would be impossible for enterprises to invest further financial resources in research and development . After the patent expires and as soon as generic medicines flood into the market, innovative pharmaceuticals continue to have a long-term societal benefit. The average duration of procedures in boards of appeal examining complaints has increased sharply in recent years. From 2011 to 2017, the average duration of appeal procedures lengthened by ten months. For smaller enterprises, in particular newly established SMEs or institutional research institutions which are much harder hit by additional costs in the patenting phase than .

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DiMasi J. A., Grabowski H. G., Hansen R.W. (2016), Innovation in the pharmaceutical industry: New estimates of R&D costs, in: Journal of Health Economics 47 (2016) 20–33. The dropout rate of almost 90% is already included in calculation of R&D costs.

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larger enterprises, the fees payable to the European Patent Office (EPO) for appeal procedures constitute a heavy burden. An often neglected but essential component of innovation-friendly patent legislation is safeguarding the results of basic research for application.

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Maintenance of robust and dependable protection of intellectual property rights is essential in order to promote research, development and production in Germany and Europe, and to remain competitive worldwide. Only in this way can innovative therapy offers also continue to reach patients.

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All restrictions on data exclusivity (regulatory data protection, RDP) in the area of orphan drugs (pharmaceuticals against rare diseases) or pharmaceuticals authorised specially for children weaken location Europe and only lead to a further relocation of research to other countries. The concept of orphan drug must be future-proofed and the patentpromoting function must also be made accessible for precision-oncological, histologyindependent substances. In addition, the European legislative framework for intellectual property should be supplemented by a uniform Europe-wide SPC (uniform SPC). This would eliminate current uncertainties as well as reduce The bureaucratic effort and costs and resources needed for SPC applications in the different Member States . Furthermore, the creation of a uniform SPC is indispensable for the success of a European patent with uniform effect. Maintenance of the patentability of biotechnological innovations. Innovative improvement of medicines on the basis of proven substances is essential for patients. In light of the considerable advantages of these further developments (e.g. new indications, new patient groups) for both insured persons and sickness insurance funds, their data exclusivity (established at European level) must be increased to five years and stringently monitored in day-to-day implementation. Existing patent law infringements must be consistently prevented in Germany through regulatory measures. For example, the substitution provision in § 129 para.1 SGB V results in practice in existing use patents being hollowed out and drugs being substituted in patent-protected indications. The duration of procedures before the Federal patent court (BPatG) must be accelerated. It should be ensured in this regard that the substantive quality of procedures must not suffer, since enterprises need high-quality judgements which will then stand the test of time.

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Protection of intellectual property should have precedence over “open access” applications. Innovations in the health sector call for considerable investments for added benefits, and this is reflected in prices. Similarly, data from cooperation projects with public institutions should not automatically be “open access”. For such cases, contracts or agreements should be negotiated for each individual case. Further development of patent protection or a comparable level of protection for innovative health solutions which are not patentable per se, e.g. in the area of gene therapies or software. The bilateral IP dialogue must also have a central significance at European level . In addition, the Federal Government and the EU should advocate consiste ntly for protection of intellectual property in multilateral forums such as WTO and WIPO (World Intellectual Property Organisation). The proposal on introduction of a proportionality test formulated in October 2020 in the government draft for a second law on simplification and modernisation of patent law (2nd PatMoG) amending § 139 of the patent law jeopardises protection of intellectual property and is rejected by healthcare industry enterprises. Instead, they continue to favour a further development of enforcement legislation specifically tailored to patent law (“solution based on enforcement legislation”). However, if amendment of § 139 PatG were to remain on the table, the healthcare industry suggests a more legally dogmatic and clear-cut solution rather than a “toleration” variant. As a country of inventors, Germany must deploy at European level for complete maintenance of the current IP protection rules.

Strategy for healthcare industry

Digitisation of healthcare sector

Figure 6: Bertelsmann Stiftung’s digital health index67

Degree of digitisation

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Germany’s health sector could be more digital: in a 2018 international comparative study by Bertelsmann Stiftung, Germany comes out badly and finishes in 16 th out of 17 countries studied (see Figure 6).68 Digitisation holds major opportunities: better, more rapid, individual, flexible and at the same time affordable care. New innovation potential through digitisation can be discerned in particular in the fields of precision medicine (e.g. biomarker screening of routine data for more targeted pharmacotherapy), personalised healthcare taking account of all of a patient’s data from different stages of the patient journey, use of artificial intelligence and digital assistance systems in diagnostics, therapy and

Bertelsmann Stiftung, Spotlight Gesundheit, #SmartHealthSystems – Digitalisierung braucht effektive Strategie, politische Führung und eine koordinierende nationale Institution, November 2018. 68 Bertelsmann Stiftung, Spotlight Gesundheit, #SmartHealthSystems – Digitalisierung braucht effektive Strategie, politische Führung und eine koordinierende nationale Institution, November 2018. 67

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research, as well as increasing efficiency through innovations . In addition, it also offers the possibility of coming to grips with shortages of skilled workers and doctors in rural areas. Digital health solutions enable sustainable and cross-sectoral care. The value added by the use of digital applications for monitoring and combating a pandemic is clear. For a successful digital transformation, above all investments in a digital health infrastructure as well as rapid interlinkage of all health sector players in a telematics infrastructure are of decisive importance. Digitisation allows different branches of the health sector to come together more strongly: pharmaceutical industry, medical technology, biotechnology, diagnostics, information technology, insurance companies as well as hospital and health service providers become more interdependent. At the same time, this greatly increases the challenges, for instance technical integration and interoperability. Hitherto there has been only very limited across-the-board digitisation of sectors and individual institutions or interlinkage of these institutions among themselves. The necessary change in healthcare structures can only be understood as an ongoing process which absorbs the dynamics of the digital transformation in technologies and society in wave after wave of new steps and is translated into concrete measures . This process must not be held up at the frontiers of legislature periods. The greatest challenges of the digital transformation in the health sector are seen above all in protection of particularly sensitive data, high investment costs, and legislative framework conditions and technical standards which struggle to keep up with rapid technological progress. There have already been numerous legislative initiatives which German industry welcomes: telematics infrastructure, remote medicine, digital health applications for patients (e.g. “app on prescription”) research data centre, electronic patient file, electronic prescription. Core elements of the digital transformation are: data protection (use of personal data), cybersecurity (trust in applications), benefit evaluation (access to new forms of care), standardisation (user participation in standardisation work), European harmonisation (ability to cooperate and market viability), adaptation of vocational profile (continuing training and interdisciplinarity) as well as ethics (data sovereignty). Statutory rules such as the patient data protection law (PDSG) which guarantees the patient individual access to his health data or development of a European code of conduct for the use of health data in the European context are important components for a higher degree of confidence and hence acceptance.

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The intensification of digitisation triggered by the corona crisis must be consolidated : digital applications such as the DIVI intensive care register or DEMIS (German electronic notification and information system for infection protection) and SORMAS (surveillance outbreak response management and analysis system) for ÖGD (public

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health service) show that the corona crisis has breathed fresh life into the previously sluggish digitisation process in the German health sector. All those involved in the German health system are invited to make an active contribution to successfully implementing the digitisation process in the near future . Only on a joint basis can the potential of new technologies be fully realised and the German health sector continue to be fit for the future. The healthcare industry is prepared to play its part.

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Digital transformation needs trust, acceptance and a widely shared objective . Policymakers should understand and address communication towards citizens, doctors and other health professionals as well as dialogue on necessary and desirable digital developments as a strategic task 69. Thought could be given here to a campaign with the Federal central office for health education (BZgA) as well as further roadshow formats along the lines of the “DVG Startup Roadshow” of the Health Innovation Hub (hih). 70 With the Federal Health Ministry (BMG) as a new managing partner of health telematics alliance gematik, board decisions should be accelerated. This also seems to be working successfully so far. However, we call for the governance structures for management of digitisation to be further reformed. Self-governing bodies alone cannot assume the responsibility for technical solutions. Patients and doctors should be systematically involved as users: end users such as patients and doctors should be involved in the development of partial strategies as well as digital applications and processes. With a view to fostering acceptance, the benefit of applications should be made visible from an early stage and policy -makers working with industry vis-à-vis users should enhance understanding. Creation of adequate reimbursement options for digital diagnosis support within the outpatient and inpatient standard service package. The European Commission’s recovery plan, the EU budget 2021–2027 and the EU4Health programme are welcome initiatives which must now be incorporated in existing strategies. In particular, the European Commission’s AI strategy must place greater emphasis on the health sector. Remuneration structures should be reviewed to verify whether they need to be ad apted regarding the profile of digital and intersectoral processes. In the international forums of WHO, WTO and G20, the following themes should be moved forward: important objectives are promotion of digitisation, interoperability, agreement on common language through the digitisation lexicon as a precondition for enabling clarity in global guidelines or rules. Furthermore, the international organisations should make greater use of the expertise of industry in the area of digital health research and development, and involve it in their deliberations. Academic and 59F68F

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Bertelsmann Stiftung, Spotlight Gesundheit, #SmartHealthSystems – Digitalisierung braucht effektive Strategie, politische Führung und eine koordinierende nationale Institution, November 2018. 70 Health Innovation Hub (hih), DVG Startup Roadshow, <https://hih-2025.de/dvg-startup-roadshow-folien-infos-naechstetermine/>. 69

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industrial forums should also have the right to submit proposals in order to allow technology-related themes to be discussed in greater detail in the international organisations. An undervalued and largely unused possibility is the use of digital solutions for full endto-end transparency in the supply chain, e.g. pilot projects which could be successfully carried out at global level in the area of blockchain applications show great potential. Here, the transparency which such innovations display can lead to a clear increase in compliance as well as security of supply and at the same time improve the efficiency of the system. Unfortunately, the high obstacles in the area of open exchange of dat a in Germany mean that many of these solutions are not possible. In bilateral relations, cross-sectoral dialogues and cooperation projects on digital health should be encouraged. Public authorities, science, enterprises and civil society groups should be able to input themes which promote better health, well-being and prosperity in a society through digital health projects.

Report by data ethics committee (DEK), page 124, October 2019 “Insofar as research activity is oriented largely on use of data for the common good (for example preventive healthcare, development of sustainable mobility concepts or a general improvement in living conditions), DEK recommends that the available privileged situations under data protection law are utilised to the full and research is deemed to be a particularly serious interest in the framework of a balance of considerations. As a complement, the Federal Länder should exercise available regulatory powers in an innovation-friendly way and in the spirit of the aforesaid research privilege, for example in the context of university legislation or also in the framework of data protection law. In this regard, the concept of scientific research – including findings in the case law of the Federal constitutional court – should be broadly interpreted. Whether or not the research activity in question is carried out by public or private bodies is not of decisive importance.”

Use of health data

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Research with health data can bring about great progress in the discovery of links between diseases and further development of treatment methods, and hence markedly improve care for the patients in question. Taking the example of the corona pandemic, it has been shown that collection of health data is essential for tracking disease

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transmission, epidemiological research as well as discovery and identification of treatment options. Technological possibilities are generated by progress in digitisation including AI and robotics, for whose effective use a large number of high-quality datasets must be available. An example for AI in practice is the corona prognosis algorithm developed in Germany which predicts disease progression safely and reliably on the basis of CT scans. Data protection has been much discussed in Germany and Europe in recent years . In this area, legal uncertainty constitutes a major obstacle to practical use of data in connection with innovative technologies. This starts with the fact that, due to an unclear legal situation, many enterprises do not know exactly whether or not the data they process are personal. Uniform standards must be created for the processing of data by public authorities, since low-quality data cannot be used for research or only with great difficulty. The State must initiate targeted reforms (e.g. modernisation of the public administration) and itself become the first mover in processing and using data. In addition, a thriving data ecosystem with a range of players has necessary prerequisites: availability of an operational, secure and sovereign telecommunications infrastructure and at the same time a safe and interoperable data infrastructure which ensures the nece ssary trust among players. The Federal Government recently provided the first stimulus with the “data for health” innovation initiative as well as in the framework of the high-tech strategy 2025 with incorporation of the “better digital connectivity of research and care” mission and the “Miteinander durch Innovation” (together through innovation) research programme 71. The two stimulus papers of the high-tech forums “Offene Wissenschaft und Innovation” (Open science and innovation) 72 as well as “Bio-IT-Innovationen – Konvergenz von Biowissenschaften und Informationstechnologien” (Bio-IT innovations – convergence of bioscience and information technologies)73 make it clear how important access to data in conjunction with international and open R&D cooperation is for society . The use of health data for research and development purposes is currently possible in Germany only through cooperation project. To date industry has no direct access under DVG to aggregate health data via research data centres, even though private research can be regarded as the driving force in Germany with an 87% share in research activities 74.

BMBF press release: Karliczek: Neue Technologien für Gesundheit und Pflege, 7 December 2020, <https://www.bmbf.de/de/karliczek-neue-technologien-fuer-gesundheit-und-pflege-13310.html>. 72 High-tech forum, Offene Wissenschaft und Innovation, September 2020, < https://www.hightech-forum.de/wpcontent/uploads/htf_impulspapier_offene_wissenschaft.pdf>. 73 High-tech forum, Bio-IT-Innovationen – Konvergenz von Biowissenschaften und Informationstechnologien, September 2020, < https://www.hightech-forum.de/wp-content/uploads/htf_impulspapier_bio_it_innovationen.pdf>. 74 vfa position: Referentenentwurf eines Gesetzes zum Schutz elektronischer Patientendaten in der Telematikinfrastruktur (Patientendaten-Schutz-Gesetz – PDSG), February 2020.

Strategy for healthcare industry

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Data protection must not act as a brake on innovations in the area of medical care . An orientation paper for a health system of the future published November 2020, whose authors include the chair of the advisory council for assessment of development in the health sector, Prof. Dr. med. Ferdinand M. Gerlach, makes the following argument for more consistent data use, which also supports healthcare industry enterprises: “Poorly understood data protection must not be deed protection and cost human lives. The opportunities opened up by the use of digital health data for the protection of human life and health far outweigh the risks. It would be negligent and ethically suspect not to use these opportunities. Sharing data responsibly – through more targeted research and optimally connected healthcare – means being better able to cure” 75. With its position paper “Wie Daten die Gesundheitsversorgung verbessern können – Real World Data in Versorgung, Forschung und Entwicklung”, the BDI Digital Health initiative submits the following concrete recommendation for action to the Federal Government: “The Federal Government must create a uniform countrywide legislative framework for the use of health data for scientific purposes – with access for private research to anonymised or pseudonymised health and treatment data in order to realise the potential of digitisation for medical progress. Of decisive importance is the development of decentralised databases and structures for the use of real world data taking European standards into account”76. The underlying premise for the entire discussion around data use and data protection is that the individual has sovereignty over his data as the central entity . What is important is comprehensive information and transparency about how data are used , flanked by protection against abuse - blanket exclusions of private research as currently foreseen are wide of the mark.

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Data availability must be understood as a potential solution for better healthcare . For this, private research needs equal access to research data via the research data centre (§ 303 d SGB V). All in all, access to aggregate health data for industry must be improved through a further development of the legislative framework conditions . This demand is also supported by the data ethics committee: In this regard, the concept of scientific research – including findings in the case law of the Federal constitutional court – should be broadly interpreted. Whether or not the research activity in question is carried out by public or private bodies is not of decisive importance.” 77

Boris Augurzky / Reinhard Busse / Ferdinand Gerlach / Gabriele Meyer: Zwischenbilanz nach der ersten Welle der CoronaKrise 2020 – Richtungspapier zu mittel- und langfristigen Lehren, November 2020. 76 BDI Digital Health initiative: Wie Daten die Gesundheitsversorgung verbessern können – Real World Data in Versorgung, Forschung und Entwicklung, page 1, October 2020. 77 Data ethics committee report, page 124, October 2019.

Strategy for healthcare industry

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Establishment of a countrywide coordination concept bringing together all state data protection authorities and involving supervisory authorities and the ethics committees’ working group. Harmonisation of currently 16 Länder hospital and data protection laws is absolutely essential. This needs consistent, countrywide uniform implementation of § 287a SGB V in Länder legislation. Examination of the portability of other European models to Germany : it is in society’s interests to work on the assumption of broadly equal access possibilities and data use as also set out in GDPR. To this end, existing best practice models for data access and data use in other European countries (e.g. Finland, Denmark, Estonia) can be consulted and analysed. Strengthening of skills development for working with data, for instance in schools, apprenticeships, vocational education and other forms of training. Holistic data management: guidelines and procedures are needed to ensure quality, protection and security of data. High data quality and the possibility to exchange data: to achieve legal and technical objectives (e.g. standardisation and interoperability), comprehensive data management approaches must be a given. Standards for storage and transmission of medical data must be introduced. It must be ensured through rules and standards that high-quality research data are available (SNOMED CT and application of an electronic health record exchange format). Infrastructure and technical precondition: a shared or networked data infrastructure is necessary in Germany. Especially for implementation, the various players such as small businesses from the health craft sector, service providers, registration organisations and cost centres must be better supported. Only through the involvement of industry can globally competitive software tools be generated which can extract, structure, aggregate, correlate, protection and evaluate data optimally in order to allow knowledge obtained jointly with clinical research to be passed on in the form of better products in standard care to the benefit of patients . Necessary for this is a code of conduct for the use of health data flanked by certification with the corresponding audits. Not least, a legislative framework to enable an across-the-board sharing of data by patients, also for the purposes of industrial research and development, must be created under the political motto of patient centricity, in the framework of SGB V. This calls for the development of innovative consent models. In this connection, a comprehensible explanation of health data sharing to the population is necessary. In addition to the desired right to make applications to the research data centre, this would enable the health sector to develop separate databases and still make a contribution to the central database and hence to the common good with the flexib ly generated data and knowledge obtained from evaluation of the data . Common procedures between policy-makers, science and industry on data protection legislation challenges for genome databases.

Strategy for healthcare industry

European health data space

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Only with the participation of all European Member States and their central players can the full potential of the common data space be realised, including use of data for research, development and applications for important innovations (e.g. covid -19 vaccine). Europe must make better use of its locational advantages. Data in the EU currently often lack semantic interoperability. Uniform procedures as well as clarity on anonymisation processes are lacking. Beyond this, the central problems are: fragmented national data protection rules and uneven implementation of GDPR, a lack of acceptance for data sharing among policy makers and in society, incomplete data infrastructure, an unclear legal basis for data sharing by patients for purposes of industrial R&D as well as an absence of legal certainty in relation to anonymisation/pseudonymisation.

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To guarantee the best possible healthcare, all EU Member States must be linked into the common European health data space. In addition, it must be possible to collate and analyse the data (semantic interoperability). For this, we need international standards, a common European procedure for collection and storage of data and not, as at present, many different federal and regional rules which stand in the way of data collation . Available information should therefore also be used across borders within a Europ ean data space: the successful example if the DIVI intensive care register shows that earlier and more targeted reciprocal assistance in the case of overstretched intensive care units would in future be possible across German regions and even across European borders. This would create essentially better conditions for fine-tuning of healthcare and minimise illnesses which are not treated or treated late.

Proposed solutions ▪

The joint action group on development of a code of conduct for the European health data space called into existence during the German EU Presidency must ensure synchronisation of heterogeneous data protection rules at national level with the

Strategy for healthcare industry

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involvement of all players policy-makers, health sector and industry) and make GDPR reliably operational. What are needed are politically promoted flagship projects such as the EU-wide Beyond 1+Mio Genome Project, the initiatives in the EU Beating Cancer Plan and the development of data registers (tumour register, spinal column register, etc.). To be able to apply GDPR in the cloud systems which are becoming ever more important in data collection and storage, these systems must be decoupled from the current non European private providers. An alternative model could be the European GAIA-X initiative, where the aim is to develop a federalised cloud system which corresponds to the principles of GDPR. With a view to patient data protection, selective adjustments to GDPPR are necessary. Thus, EU citizens can make their data available for research purposes more simply (so called broad consent). Also important are a standardised, multilayer and patient-centred consent procedure for data release in order to create legal certainty. Alongside the technical infrastructure (e.g. on the basis of the planned European data infrastructure GAIA-X), a European health data space also needs an economic infrastructure which supports the development of data-driven business models, but is still regulated such that fair and broad access to data is created under economically reasonable conditions. In the last analysis, a successful digital transformation in the health sector is a question not only of technology and legislation but a cultural issue and a question of trust supported by technology and legislation. Citizens must be supported in gaining trust through the acquisition of digital skills (e.g. in training courses covering all areas of education) and the palpable benefit that digitisation can generate, in order to flank to cultural transition.

Ecological and economic framework conditions

Economic policy climate

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Decisions by enterprises in Germany or Europe to invest or even to produce is linked to the still intact value creation chain and a highly promising innovation ecosystem which makes the location attractive. However, conversely, in digitisation European enterprises are not drivers of innovation, which is to the detriment of new cooperation projects and innovations. Increasingly data-based research and innovation runs the risk of being carried out elsewhere. Global economic pressure to maximise profits through risky business with a high investment requirement on the one hand, and growing price pressure and/or profit

Strategy for healthcare industry

uncertainties in reimbursement systems on the other hand plot out the framework for corporate decision-making. Healthcare industry is perceived primarily as a cost driver in policy-making circles. Because of this, the healthcare industry has hitherto been undervalued among policymakers and in public opinion in relation to its direct economic contribution (inter alia GDP and secure, highly skilled and well paid jobs) and safeguarding public health and hence as an essential underpinning for a healthy population and a growing economy . Further central problems: increasing State intervention in private sector activities (e.g. emergency corona legislation, debate on patent restrictions in pharmaceutical and vaccine development), overregulation of the health system, high bureaucratic hurdles and sometimes years of delays through evaluation procedures in self-governing bodies. What is currently missing is active development of healthcare industry in economic policy as a highly innovative branch based in leading technologies and with enormous export potential.

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Vision ▪

Healthcare industry calls for concrete support in which innovative strength is underpinned by reliable framework conditions. But above all, it needs a high regard for value creation. This applies in particular in competition with other providers in a globalised world market and taking the framework conditions of a united Europe into account. This high regard must be a public and visible political consensus so that healthcare industry can also continue to make its full innovative strength available in Germany.

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Recognise the importance of the health sector, linked to political priority and concomitant budget resources (health as backbone of the economy and society, recognition of health as “high politics). Establishment of a healthcare industry expert group, along the lines of the expert group for assessment of development in the health sector, which looks especially at themes such a legislation affecting healthcare industry and whose findings are taken into account, and which evaluates both German and European framework conditions . Thought could also be given to a report on the entire health sector prepared every two years by the healthcare industry expert group. Ideally, an analogous expert group should also be set up at EU level and advise DG Competition which is instrumental in setting the min direction of European industrial policy. Consistent implementation of a “health-in-all-policies” approach, e.g. through - an obligatory impact assessment in the area of public health in all legislation which is relevant for the health industry or care. In this regard, the impact assessment evaluates the extent to which the care and safety of the population as well as

Strategy for healthcare industry

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promotion of industrial innovation and digitisation and industry- and trade-related measures have positive effects for the efficiency and provision of health services and systems. This would correspond to United Nations Sustainable Development Goals (SDG) 3, 9 and 17. Under SDG 3, the focus is on healthcare. SDG 9 sets itself the goal of promoting sustainable industrialisation and supporting innovations, and partnerships between healthcare industry, governments and other players are strengthened via SDG 17; - standard economic calculations of alternative scenarios to be prod uced in the case of price interventions which quantify not only the macroeconomic effects of the saving potential of statutory sickness insurance but also offset a modelling of the conceivable intensity of the negative effects on domestic value creation ; - introduction of an obligation to consult the economic committee for certain laws which can have economic consequences for healthcare industry enterprises. Extension and continuation of dialogue formats at regional and federal level. The forums, dialogues and round tables initiated in Baden-Württemberg, Bavaria and Hesse can provide orientation here. Through these channels, these Federal Länder sharpen their understanding of what framework conditions healthcare industry needs in order to be able to develop further at the location. Of decisive importance is a broad political basis involving all relevant ministries (health, economy and research). Planning certainty, reliable framework conditions (above all commitment to patent protection, no retrospective reimbursement or obligatory payments according to the financial situation of the statutory sickness insurance funds). Moderate burden under corona crisis management: maintain incentive effect to secure the location, research and marketing. Maintain access to export markets through multilateral and bilateral cooperation .

Strategy for healthcare industry

Figure 7: Development of healthcare industry exports78

Trade agreements

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The healthcare industry is highly globalised. More than 90% of the health sector’s exports can be attributed to healthcare industry. The level of exports is rising sharply and accounted for more than 120 billion Euro in 2019 (see Figure 7). This corresponds to 7.5% of total exports. Imports were 80 billion Euro (6% of total imports).79 Proliferating trade conflicts in the form of threatened or actual customs duty increases weigh down on international goods trade. Conclusion of ambitious and comprehensive trade agreements with various regions of the world (e.g. USA, Latin America, Japan) is of great importance for the export-oriented and globally active healthcare industry and preservation of jobs in Germany and Europe.

Federal Ministry for Economic Affairs and Energy (BMWi) (2020): Gesundheitswirtschaft – Fakten & Zahlen. Ergebnisse der Gesundheitswirtschaftlichen Gesamtrechnung, 2019 edition. 79 Federal Ministry for Economic Affairs and Energy (BMWi) (2020): Gesundheitswirtschaft – Fakten & Zahlen. Ergebnisse der Gesundheitswirtschaftlichen Gesamtrechnung, 2019 edition. 78

Strategy for healthcare industry

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Trade agreements also help through cheaper imports of efficiently produced products and through alternative, attractively priced reference countries with secure supply chains. Germany buys 64% of imported medical goods from 31 or more countries. That points to a high degree of diversification for acquisition of these products . 80 67F78F

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A rejection of global trade and a European policy of self-sufficiency in the health sector is dangerous, since it does not adequately ensure security of supply in periods of crisis and accordingly can even reduce resilience. Free movement of goods, open borders and solidarity are of decisive importance. Alongside a clear vision and a realistic roadmap for an industrial strategy in Germany, a European approach is also necessary to come to grips with competition from China and the USA on equal terms – both countries are currently working resolutely on how they can assert their economic and industrial policy interests. Europe must find an answer which accentuates good framework conditions rather than protectionism .

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BDI calls on all States to eliminate customs duties on pharmaceutical products and intermediate products as well as medical products non-bureaucratically, comprehensively and durably. This would facilitate the struggle against worldwide health emergencies and pandemics, and ease the burden on national health s ystems and enterprises alike. Germany and the EU should advocate for this position at G20, WTO and WHO level. In this regard, a pragmatic approach should be pursued which avoids both the unwieldy customs procedure with stipulations on customers and end use and unduly narrow product coverage. An initiative for binding and rapid elimination of the corresponding customs duties in important trading nations should be launched under the umbrella of WTO, on a joint proposal of the G20 States if at all possible. A corresponding agreement could draw inspiration from the example of existing WTO-compatible sectoral agreements. Until this comes into force (i.e. for a limited period), important signals could be sent if all large economic partners immediately and unilaterally eliminate the customs duties in

Ifo Institut: Apotheke der Welt oder am Tropf der Weltwirtschaft? Deutschlands Außenhandel auf dem Markt für Arzneien und medizinische Ausrüstungen, April 2020.

Strategy for healthcare industry

question in order to reduce costs and problems in supply chains without delay in the current pandemic. 81 The potential of future free-trade agreements should be realised to the full by formulating explicit chapters on provision of services in the health sector and enshrining compliance with global standards. Conclusion of mutual recognition agreements (MRA), common rules on conformity assessment and reciprocal recognition of inspections are important aspirations for enterprises. The European Union has a decisive role to play here since it negotiates these are similar aspects on behalf of the Member States . Standards for clinical studies and market authorisation – actionable – should also be enshrined in trade agreements: agreements on membership and compliance with obligations arising from international harmonisation conferences such as the International Conference on Harmonization (ICH) should also find their way into trade agreements in order to bring the regulatory framework conditions for clinical studies and market authorisation up to a high standard worldwide. In times of increasing decoupling, these are valuable global institutions for securing international standards . The ASEAN States are a dynamic market region with more than 640 million consumers who together constitute the eighth largest economic region on earth. Hence, the ASEAN States are the EU’s third largest trading partner, behind the USA and China . Currently there are free-trade agreements only with Singapore and Vietnam. Negotiations with further States have not moved significantly forward in the last few years. The EU should place a clear focus on entering into serious and targeted negotiations rapidly here (in particular with Malaysia and Indonesia). the EU must push internationally for membership of the WTO Government Procurement Agreement (GPA) and enshrine ambitious and actionable market opening, transparency and the principle of non-discrimination in its trade and investment agreements in the area of public procurement and investments. For instance, adoption of the EU investment agreement with China must be brought rapidly to a qualitatively good conclusion. In addition, chapters on digital health and interoperability should be included in trade and investment agreements. 68F79F

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Level of taxes and expenditures

Status quo ▪

For more than twelve years, there have been no appreciable structural reforms or reliefs for enterprises in Germany. Germany is in competition with other industrialised

BDI position, Zolleliminierung für pharmazeutische und medizinische Produkte zur Bekämpfung der Corona-Pandemie und künftiger Gesundheitsnotstände, May 2020.

Strategy for healthcare industry

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countries. The outdated tax structure and the very high level of taxation impedes the sustainable future viability of the location. On an international comparison, Germany has now developed into a high-tax country with a total tax burden of around 31%. This means that Germany can barely compete in international competition for investments on the tax front. 82 Other countries create locational advantages through tax reform measures. The USA, Great Britain and France have already carried through reforms of corporate taxation . German industry advocates a growth-friendly tax policy in Europe in order to strengthen the international competitiveness of European enterprises. A heavier burden on citizens and enterprises would run counter to Europe’s economic recovery and increase the costs of doing business. The objective is to strengthen Europe’s industrial base and European cooperation and to avoid additional burdens on industry. A concept for a future-oriented tax policy is urgently necessary. This is the case irrespective of whether it relates to SMEs /family-owned businesses or listed companies. A successful move into a tax incentive scheme for research and development (tax bonus) is an important step for improving the framework conditions for more research and development and innovation in Germany vis-à-vis the international competition – but this needs to be further developed. 69F 80F

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In a situation of international dimension, structural adjustments to the tax framework conditions are necessary in order to secure future growth. Internationally competitive corporate taxes are a decisive criterion for locational decisions. In the long run, Germany cannot afford to levy a higher tax burden than other industrial countries. The course for an internationally comparable corporate tax burden in Germany must be set now. For this, structural tax reforms are needed to continue to secure growth and jobs in business location Germany.

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In light of an average corporate tax burden in OECD of around 25% and in EU Member States of just under 21%, the effective tax burden in Germany should fall to no more than 25% in the medium to long term. Such an internationally competitive tax burden is of central importance and would mean a strengthening of business location Germany .

BDI / VCI, Die Steuerbelastung der Unternehmen in Deutschland – Vorschläge für ein wettbewerbsfähiges Steuerrecht 2020/21, October 2020. 82

Strategy for healthcare industry

Fundamental structural measures in the area of corporate tax law is necessary for this to come about. 83 Federal, regional and municipal authorities can deploy a targeted and future -oriented industrial policy with attractive business taxation rates and hence remove the current disadvantages vis-à-vis other locations. This is also an important factor for the establishment of innovative start-ups. Development of research grant: instead of new investment programmes, it would be better to develop the research grant further in order to strengthen the research location on a targeted basis. To this end, the limitation of “associated businesses” needs to be adjusted, the assessment base widened and the subsidy rate increased . Improvement of venture capital conditions (see chapter on access to the capital market ). Improvements to investment conditions for digital investment goods. The turnover tax on medical products is not uniformly regulated. For some implants and prosthetic care it is 7%, for other medical products 19%. Since all medical products serve to provide necessary patient care, the distinction is difficult to understand. The rate of turnover tax on medical products should therefore be charged uniformly at 7% . 70F8 1F

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Workers

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The position of the healthcare industry as a key German industry is in danger if innovations are not created because of a shortage of skilled workers, research results are not transformed into marketable products at a rapid pace and medical and pharmaceutical products cannot be produced and distributed to meet demand. Even now, the health sector lacks skilled workers. This applies for the core of the health sector, health and social provision, as much as for the health industry . If it is primarily doctors and nurses that are in short supply in health provision, the health industry lacks mainly engineers and skilled production workers. It is clear that skilled workers make an essential contribution to the success of highly specialised healthcare industry enterprises. Inadequate qualification, especially in the area of production, often goes hand in hand with long and intensive training and qualification activities . The increasing shortage of skilled workers is a bottleneck factor for the sector. Lifelong learning also impacts medical professions whose methods are changing massively due to digitisation. In addition to work processes, this also relates to dealing with connected technology.

BDI / VCI, Die Steuerbelastung der Unternehmen in Deutschland – Vorschläge für ein wettbewerbsfähiges Steuerrecht 2020/21, October 2020. 83

Strategy for healthcare industry

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The healthcare industry continues to be one of the job engines in Germany. Despite high economic risks as well as greater difficulties in finding and keeping skilled workers, the signs continue to point to an increase in employment. According to the autumn 2019 DIHK health sector report, the shortage of skilled workers constitutes the top risk for enterprises in the health sector. 65% regard it as a danger for their business activity. Thus, the concern about too few skilled workers in the health sector continues to be more marked than in the economy generally (now 56%, previously 59%). 84 Alongside problems in finding and keeping suitable skilled works, high labour costs are also a risk for healthcare industry enterprises. The law on immigration of skilled workers is an important milestone with regard to the skilled worker situation in health professions, but can do no more than help to close part of the skilled labour gap. Industry is involved in regular reorganisations of training profiles through its business associations and adjusts constantly to the current state of affairs . An example: the newly organised information technology professions which have been supplemented in particular with content on data security. The electrotechnical professions have also already been equipped with additional digital qualifications (programming, IT security, digital connectivity). The abstraction which distinguishes training orders is an advantage, because only in this way is shaping for the future possible. It has proved useful to leave the content of training to the social partners, since they act as guarantors for up-to-date and needs-driven content. 71F 82F

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Not only communication of knowledge at the highest level of international research but also educational know-how coupled with social engagement is necessary for a sustainable innovation culture and an excellent health system to the benefit of the patient in Germany. The increasing specialisation with simultaneous interactions in prevention, diagnosis, therapy and rehabilitation make it necessary to improve education and training of doctors, pharmacists, scientists and technicians in healthcare as well as to keep related care workers and other medical practitioners at the forefront of scientific knowledge . In the area of education and training, it is also very important to dismantle rigid professional demarcations. Furthermore, there is a need to give medical personnel a digital training so that they are in a position to apply the new technologies vis-à-vis the patient.

DIHK report: Gesundheitswirtschaft – Gesundheitswirtschaft unter Druck, autumn 2019, December 2019.

Strategy for healthcare industry

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Education policy and social partners need to create needs-driven vocational profiles (e.g. data nurses) and where necessary also to rethink existing training models . Furthermore, training offers for health sector vocational profiles should be expanded and adapted to the needs of the different enterprises. Digital training should in future be a compulsory component in all health sector vocational profiles . Make study courses in natural sciences more attractive and improve scientific education in chemistry, biology, physics and mathematics already in schools. Attracting skilled workers at home and from abroad must be placed on a permanent footing and immigration of foreign scientists and students should be facilitated . The understanding between academia, industry and venture capitalists (VCs) should be further improved, for example through corresponding training programmes. Upgrade the exchange programme, e.g. permeability of training and employment systems between the academic world and industry, develop networking of research, doctors and science. An important condition for implementation of agreements made is rapid, pragmatic and flanking implementation of the digital pact. The vocational school is an important partner in the dual training system. To implement a necessary and lived cooperation at the place of learning successfully, care must be taken that the tools from the digital pact for better equipment in schools and vocational schools are generated and can be deployed rapidly.

Energy costs

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Energy costs have increasingly become a locational factor in recent years. In particular, enterprise from the USA or Asia have a large competitive advantage over German enterprises thanks to more attractive energy prices. Development of an affordable, reliable and sustainable energy supply can only succeed in international cooperation. Global interdependences and effects of national trade currently still receive too little attention. As a sector which accepts responsibility for current and subsequent generations, healthcare industry enterprises generally support measures and initiatives which are conducive for climate protection. The corresponding by the sector could be greater if bureaucratic and regulatory hurdles were reduced, e.g. in the renewable energies law (EEG).

Strategy for healthcare industry

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With a view to a globally competitive healthcare industry, the gap between world regions with attractive energy prices and societies doing sustainable business must not widen further.

Vision

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With the energy transition, Germany has set itself the ambitious goal of broadly transforming energy supply for the benefit of climate protection. German industry supports this project and wants to help make a success of the energy transition with its specialist know-how and innovative strength. However, to be able to work for this with its full strength, it needs a consistent energy and climate policy. Only uniform laws, measures and guidelines can lead to the self-imposed objectives being met. As an industrial country, Germany needs the energy-intensive industries in order to secure growth and jobs. Industry needs stable energy costs which are internationally competitive in order to remain competitive at global level.

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There is already an emission trading scheme in Europe which offers great political possibilities for arriving at an international climate policy. Emission trading has shown that it is a suitable and effective instrument for international climate policy . Germany and its economy are invited to make a clear contribution to international climate protection which can only be implemented effectively at global level. Instruments should be coordinated on it becoming internationalised. Healthcare industry often qualify for exemption from the EEG levy (depending on energy intensity) even though they produce system-relevant products. Support due to system relevance (not because of the Covid crisis) would be helpful here in order to support production in Germany, not least with a view to security of supply.

Strategy for healthcare industry

Approval procedures

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The challenges with nature conservation and environmental law in Germany are unique on a European comparison, although all EU Member States all have the same requirements. Long-winded approval procedures and the unpredictability of outcomes make investment decisions in Germany difficult. The length of approval procedures and the extent and content of the documentation to be submitted is increasing constantly, whereas at the same time the human resource situation in authorisation and specialist authorities is deteriorating. Willingness to litigate against industrial projects is also increasing, as are the possibilities to carry through complaints successfully . Business representatives planning a project and who are responsible for the necessary investments have great difficulty in forecasting the length of the procedure, let alone whether an authorisation for the desired project will be granted at all. This applies in particular also for research projects. The selection of an efficient R&D location is central specifically for the value creation periods of pharmaceuticals and medical products as limited by patent validity periods. Bureaucratic and long-winded approval processes therefore reduce the attractiveness of a location, e.g. for clinical studies. An approval procedure under the emission protection law currently lasts on average between six months and two or even three years following submission of the application . To this is added the time for preparation of the approval procedure and drafting application documents. For preparation of the procedure through to submission of the application, enterprises calculate between three and eighteen months depending on the scope of the procedure . The costs of an approval procedure – added together for an average procedure – range from 10,000 to 500,000 Euro or 3 to 5% of the construction cost. A large share of the spending goes on expert reports which cost between 5,000 and 120,000 Euro. If an approval procedure involved an average of two export reports fifteen years ago, the figure today is five to ten reports. 85 Healthcare industry is sensitive to short innovation and marketing cycles. This reduced “time to and on the market” calls for rapid production adjustment. This leaves little time for long approval procedures. 72F83F

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BDI position: Genehmigungsverfahren vereinfachen – Rechtssicherheit für Produktionsanlagen schaffen, March 2020.

Strategy for healthcare industry

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An acceleration of approval procedures for the construction and operation of industrial installations is urgently needed, since long planning and approval procedures are an extreme locational disadvantage for Germany. Rapid and comprehensive digitisation of administrative procedures can make a contribution here. In the eyes of German industry, the development of a countrywide software package, an inclusive authority portal and associated adjustment of the legislative framework is necessary and desirable, and should be taken up in the upcoming legislature period. 86 73F8 4F

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In the view of German industry, authorisation and permit procedures should be structured such that applications can be made largely without expert reports or legal support. Streamline procedures: authorisation of installations must be effective and efficient. Simulations involving industry and authorities can be a suitable instrument for identifying problems before new rules enter into force and discussing practical solutions . It is also essential to shorten court procedures. Disputes are repeatedly heard in each and every instance. Use clear legal concepts: unclear concepts such as “reasonable”, “practical” or “riskenhancing” often make the work of authorities more difficult and increase the fear of interpretation errors. Supposedly in order to be on the safe side, workers are increasingly calling for expert reports and hence pursuing a zero-risk strategy. In order have legally certain decisions at the end of approval procedures , requirements and enforcement provisions have to be formulated in practical, clear and unambiguous language – that is important for enterprises and authorities alike. Increase and train human resources: As complexity increases, Germany’s authorisation and specialist authorities are often understaffed. The Länder in particular are invited to increase human resources. In addition, it should be ensured that knowledge is passed on to the next generation of workers. Furthermore, employees should be continuously trained in order to be able to reach legally certain authorisation dec isions. In particular for the authorisation of production installations for medical products and pharmaceuticals, special knowledge is needed which local authorities cannot always have on hand. A bundling of necessary competences at regional level could be helpful here in order to organise the approval process efficiently and in an investment- and innovation-friendly way. Cooperation between authorisation authorities on concrete projects or cross-cutting issues across authorities and Länder should be used more extensively for exchange of knowledge and experience.

BDI position: Genehmigungsverfahren digital denken, November 2020.

Strategy for healthcare industry

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Conduct clear dialogue: Opportunities and risks should be balanced on the basis of facts in approval procedures. Early dialogue between project operator and authority, as is already possible under the law, could help here. Policy-makers and business mist advocate together for more acceptance of important industrial projects . For certain installations and processes, procedural facilitations should be discussed with a view to certain installation types being exempt from the authorisation obligation under the federal emission protection law. Alternatively, thought could be given to extending the early start of installation construction to bringing into service. This applies in particular for installations or research and production of pharmaceuticals and vaccines to combat the Covid-19 pandemic.

Ecological and economic sustainability

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Many healthcare industry enterprises already wok continuously on development and adjustment of sustainable production. Ecological production without harmful substances (EU chemicals strategy) should be created in Europe through innovative procedures compatible with the circular economy. A further objective is a reduction of greenhouse gases and more resource-efficient production methods. One route for this is bioeconomy targeting renewable raw materials as a basis for biopharmaceuticals, industrial products and much more. Social standards are deemed to be a core element for sustainable production. For example, this includes collective agreements and collectively agreed wages but also implementation of the principle of diversity and inclusion, to which most healthcare industry enterprises are committed.

Vision ▪

A sustainable healthcare industry location is fit for the future but also ambitious with regard to regulatory framework conditions in order not to lose its efficient through over regulation. A good communication model for reciprocal exchange between society and industry is needed, as is a culture of joint problem-sharing.

Strategy for healthcare industry

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Environmental provisions must be in reasonable proportion to risk and enforceable . In addition, provision should always be made for progressive implementation of environmental objectives. In view of the long development cycles in the pharma and medical products sector, it is particularly important to offer an adequate run-up period so that a process change can be made without negative consequences for consumers and in particular the supply of pharmaceuticals and medical products to patients. This includes clear milestones, achievable objectives and sufficiently long transition periods along the road to a climate neutral Europe by 2050. Incentive-oriented sustainability promotion, for example taking the award criteria for tender procedures into account, simplified authorisation procedures, tax breaks . Consideration of healthcare industry in bioeconomy promotion programmes and political initiatives, because biopharmaceuticals are produced exclusively on the basis of bioeconomic production procedures.

Conclusion Health is one of the megatrends of the future. One essential characteristic of such a megatrend is its effect at all levels of society: business and policy-makers as well as science, technology and culture. Megatrends change the world and hence also the healthcare system – slowly to be sure, but nevertheless fundamentally and for the long-term87. 2020 has shown that Germany has one of the strongest healthcare systems in the world, even in the case of a pandemic. The mix of individual care and collective responsibility, cooperative interaction between the State and private players as well as interplay between high-tech and high-touch have prevented a catastrophe. 88 So that this remains the case in the future, the healthcare industry must be valued and promoted as a central component of the health sector. 7 5F86F

The healthcare market is the most strongly growing market worldwide: the growing life expectancy of the world population and the growing human health need with the associated level of care result in an increasing need for products from the healthcare industry. It can therefore be expected that the worldwide market volume will rise sharply over the coming years as the middle class expands in Asia and attempts to push Europe out of its current position as one of the most important healthcare markets. Europe therefore now needs a dynamic, well financed and technology-neutral research ecosystem in order to enable medical innovations which can react to acute health threats such as Covid-19 as well as further health challenges such as cancer and dementia diseases. That means long-term investments in research, development, production, skills, networks, infrastructure for health data as well as flexibility in regulation and a supportive IP network. In addition, it must be ensured in all necessary regulatory interventions that enterprises in Germany and Europe

87 88

Daniel Dettling / Corinna Mühlhausen: Gesundheitswelt 2049: Ein Navigator für die Zukunft, November 2020. Daniel Dettling / Corinna Mühlhausen: Gesundheitswelt 2049: Ein Navigator für die Zukunft, November 2020.

Strategy for healthcare industry

can maintain the high quality and production level in global competition as a contribution to the diversification of international supply chains including location Europe, despite their existing production excellence, and not lose their good market position due to over-regulation. To further develop health as a cross-cutting field for action and in particular to be able to integrate the healthcare industry in an active economic, research and education policy, policy-makers must seek to achieve a paradigm change. Only in this way can the healthcare industry be secured as a component for a reinvigorated economy, good jobs and secure healthcare provision in location Germany and Europe. Particularly noticeable is that other sectors such as the automotive industry enjoy a markedly higher profile and attention in public opinion and among policy-makers, despite the considerable contributions of healthcare industry to value creation and jobs in Germany. Generally, many sectors and hence the entire business location of Germany are confronted with changing framework conditions. German economic policy therefore needs to be reoriented in the European and international environment. The themes of health and care as well as healthcare industry as a sector are an important factor here. It is time that the healthcare industry with all its complex sectoral know-how is recognised as an expert and partner of equal standing. Establishment of a permanent healthcare industry dialogue with other players can be a first step in the direction of asserting the sector’s value. This analysis and evaluation of the current locational factors offers a facts-based contribution on the basis of which policy-makers can move the healthcare industry closer to the centre of policy debates and establish itself as one of several future leading sectors in Germany and Europe.

Strategy for healthcare industry

Imprint Bundesverband der Deutschen Industrie e.V. (BDI) BDI – Federation of German Industries Breite Straße 29, 10178 Berlin www.bdi.eu T: +49 30 2028-0 Author Michaela Hempel Deputy Head Health Industry T: +49 30 2028-1493 m.hempel@bdi.eu

With the support of Bayer AG B. Braun SE BIO Deutschland e. V. - Biotechnologie-Industrie-Organisation Deutschland e.V. Boehringer Ingelheim Corporate Center GmbH Brainlab AG Bristol-Myers Squibb GmbH & Co. KGaA BPI - Bundesverband der Pharmazeutischen Industrie e.V. BVMed - Bundesverband Medizintechnologie e.V. DIB - Deutsche Industrievereinigung Biotechnologie / VCI Fresenius SE & Co. KGaA GlaxoSmithKline GmbH & Co. KG IHO - Industrieverband Hygiene und Oberflächenschutz Johnson & Johnson Medical GmbH Lilly Deutschland GmbH Medtronic GmbH Merck Serono GmbH Novartis Deutschland GmbH Pfizer Deutschland GmbH G. Pohl-Boskamp GmbH & Co. KG RetroBrain R&D GmbH Roche Pharma AG Sanofi-Aventis Deutschland GmbH SAP Health Siemens Healthineers AG T-Systems International GmbH VCI - Verband der Chemischen Industrie e.V. VDDI - Verband der Deutschen Dental-Industrie e.V. VdTÜV - Verband der TÜV e.V. vfa - Verband Forschender Arzneimittelhersteller e.V. ZVEI - Zentralverband Elektrotechnik- und Elektronikindustrie e. V.

BDI Documentnumber: D 1256