Nordic Life Science 1
ADVERTORIAL POTTERCLARKSON.COM B Y S T E P H E N
MC NE E NE Y P H D , UK A ND E UR OP E A N P A T E N T A T T OR NE Y , P A R T N E R AT P O T T E R C L A R K S O N L L P started in the pharmaceutical industry, as an in-house patent attorney in the early 1990s, I figured that it was a fairly “safe“ environment in which to be employed. An apparently recession-proof business where IP, and patents in particular, were critical to profitability. The business was global and powered by huge research-based companies (“Big Pharma”), who took drugs all the way from preclinical research, through clinical development to commercialization. Drugs commanded high prices in the developed world, which represented almost the entire market in terms of value, with the US market being by far the most lucrative. Although the Hatch-Waxman Act, a US federal law designed to encourage generic drug manufacture and sale with a view to lowering prices, had been around for just a few years, generics companies were still somewhat smaller, often local organizations that tended not to enter the market until at least the basic patent covering a drug expired. Fast-forward 25 years and the pharmaceutical industry is still global, but it has had to evolve in response to everchanging healthcare and regulatory environments, on both a local and a global level. In first-world countries, ever-increasing demands on healthcare providers are coupled with downward pressure on drug pricing and more stringent regulatory environments imposed by national governments. Greatly enhanced generic competition has come from companies that are now themselves global players. The pharmaceutical market in developing markets is on a rapid upward trajectory. Despite these obvious opportunities, traditional western Big Pharma players have found such markets (particularly China) difficult to penetrate, given that they represent a somewhat uneven playing field, often having scant regard to intellectual property rights. Despite a degree of naivety, local companies, who are often subject to lower ethical and safety standards than is the case in the developed world, find it easier to meet local demand, and local governments and courts tend to assist further in that process. A response of Big Pharma to these pressures has been well-documented consolidation, with the inevitable consequence of job losses and facility closures. Things have quickly become fragmented, particularly in Sweden, with less fundamental, ground-breaking research being performed in-house. Larger pharmaceutical companies have moved towards becoming drug development houses, increasingly looking to smaller R&D-focused companies to fill their ever-shrinking pipelines. One might conclude that such a relationship should be a win-win, symbiotic one. he problem that so many of these innovative companies tell me that they experience is a lack of funding. In Sweden, investment is hard to come by at all stages of the development process. Although start-up money is often available to get things off the ground (target validation and/or lead identification), there is an absence of organizations that are willing to invest heavily in the next stage of development (e.g. up to candidate drug identification). This is less of an issue in Denmark, where large local pharmaceutical companies and associated investment arms are naturally more inclined to invest with the long game in mind. That said, it can still be very difficult to secure investment at the right time. Pharmaceutical R&D by its very nature is a risky business, and Big Pharma companies, the very organizations that are both able to commit both the necessary financial resource and have the technical competence in drug development to invest in the long term, are typically unwilling to take on big risks that were not “invented in