European health R&D investments stagnate for the first time in history Private industry invests 29 bln € in health R&D, and public authorities 18 bln €

A report published today shows that European research and development (R&D) investments in health have stagnated since 2010, and this is the first time after decades of annual increases. The report was commissioned by Janssen Pharmaceutica NV and the research was conducted by Deloitte Health Economics group.

Germany in pole position

The total amount of health R&D in the European Union is 47 bln € in 2011, of which 60% is invested by the pharmaceutical industry and 40% by the member states and the European Commission. This amount represents 3% of total healthcare expenditure in the region, which amounts to 1,400 bln € (1.4 trillion euro).

The private investments have stagnated for the first time, staying at 29 bln € and public investment decreased with 1% to 18 bln €. Public investments include academic research and public research funds. In the United States, the health R&D investments have decreased even more strongly, but they remain at a very high level with 49 bln € of private investments and 42 bln € by the public authorities.

Within Europe, the major investors in health R&D are Germany with a total of 9.4 bln €, followed by France (8.3 bln €), the UK (7.4 bln €), Switzerland (5.3 bln €) and Italy (2.4 bln €).

R&D investments key for sustainable healthcare

According to the report, this decline is due to the current economic situation, reinforced by the uncertainty about future market conditions, and increasingly limited reward mechanisms for innovative technologies, amongst others. The findings are worrying in the light of Europe’s increasing disease burden and aging population, as well as the millions of people whose health cannot be improved without new health care approaches.

“The major focus of research is a medical one, to find new and better treatments for patients, yet at the same time the benefits of that always outweigh the costs for society,” said Jane Griffiths, Company Group Chairman, Janssen EMEA. “Today, the innovations of yesterday have become cheap and have become available to all. But you need the discovery and development of new drugs first. The incredibly high risks of pharmaceutical innovation are only sustainable if the rewards are adequate and fair. Everybody benefits from this: the patient, society and the industry. We cannot afford not to innovate”.

Healthcare costs in Europe are expected to increase to 12-15% of GDP by 2030. The report concludes that increased health R&D investment is even more important to address in the context of growing healthcare expenditure. For example, new technologies improve the quality of healthcare provision, leading to improved outcomes and increased life expectancy. New technologies also lead to efficiency gains, as their cost tends to decrease over time for both medicines and medical devices. Improved health leads to better productivity among the working population and may even increase the maximum working age. Health R&D investments also have the potential to provide high economic yields, both in terms of return on investment and deploying a highly educated workforce with technical skills.

The report is available for free on www.JanssenHealthPolicyCentre.com