INNOVATION MODELS IN THE BIOPHARMACEUTICAL SECTOR - Innovation in the Biopharmaceutical Industry - page 18

there are substantial differences in clinicians' attitudes towards new products (Payer,
1989). For example, Griffin (1985) has noted the “therapeutic conservatism” of UK
doctors in adopting innovative medicines compared to doctors in France, Italy and
Spain. Recently, the growing influence of budget holding payers in many European
countries appears to have had a negative impact both on time to market entry, and
on the rate of diffusion of innovative product classes such as statins (Walley et al. ,
2004).
Recent studies have highlighted that the bureaucratic delays which exist in
national approval systems, and the delays which occur during the negotiation of
state-reimbursed prices, can both be significant barriers to the uptake of new inno-
vations in Europe (Cambridge Pharma, Consulting, 2002).
Diffusion models and health technology assessment
There is considerable debate concerning the role of HTA methodologies in the
prospective evaluation of the potential value of innovations, and its impact on dif-
fusion. In the UK, the National Institute of Clinical Excellence (NICE) has taken
a leading role in formally assessing new products' clinical and cost effectiveness
before market entry, highlighting “best value for money”. A key aim of NICE is
achieving uniformity of practice across the UK NHS. However, recent studies have
cast doubt as to the feasibility and effectiveness of this initiative (Attridge, 2006;
Kings Fund, 2006).
From the industry's perspective, there is concern that HTA methodologies will
not adequately recognise the value of the bulk of its output, namely, incremental
advances. Even for major new classes, which in retrospect clearly constitute radical
progress, pre-launch assessment can delay entry into markets or slow diffusion. Such
a situation was recently apparent in the UK with the anti-cancer drug Herceptin.
Appropriability and sustainability in biopharmaceuticals
It is difficult to define the value of a medical innovation and to estimate how it is
shared between many different stakeholders. Ex-poste historical studies provide a
limited guide regarding the scale of benefits that accrue. Dramatic improvements
in the treatment of infectious disease, heart disease, mental illness, AIDS, and even
cancer have benefited both patients and society. The pharmaceutical industry has all
the while been able to sustain profitable growth and to reward well both employees
and investors.
Two questions dominate research in this area:
1. How should governments seek to set the balance between the social and eco-
nomic value of the biopharmaceutical industry's output, and the rewards for its
innovative activities?