Germany Pharma report January 2010
More spotlights on pharmaceutical markets worldwide at
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Unifying Germany with innovation
fter two world wars, forty-five years of foreign occupation, national division and a fallen wall, there are no doubts left over the German capacity to reinvent itself and overcome obstacles. In just 20 years since German hammers smashed their way towards unification, economic freedom and democracy, Germany has fully regained its sovereignty, its confidence in itself, and its place at the heart of Europe. In the new nation, however, East Germans quickly learned “there’s no such thing as a free lunch,” and Germany as a whole has realized that harmony comes with a price. After years of subsidizing the poorer former communist neighbors, the Federal Republic is still pondering how to continue financing social equilibrium, without compromising its generous welfare state as both the German society and its economy continue to mature. The question is not whether but rather how this remarkable society, used to transcend colossal challenges, will deal wisely with more mundane ones.
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Out of a big list of “ordinary issues,” one of the most relevant – and a hot issue in Germany’s 2009 September elections – is how to finance a universal health care system. Germany’s answers to such pressing issues in the last two decades have had an impact on the world’s third largest pharmaceutical market and how the Left to right: Henning Fahrenkamp (BPI), Cornelia Yzer (VFA), Peter Schmidt (ProGenerika) industry is responding to them. Henning Fahrenkamp, CEO of the German Pharma- costs in a mature and saturated market. Even though the ceutical Industry Association (BPI) explains: “In the last room for critics and improvement is considerable, skeptics 20 years, Germany has undergone almost 20 health care couldn’t be more mistaken. The numbers of the German pharmaceutical industry reforms and law changes, averaging one reform per year.” But the results have not always been to the taste of the speak for themselves: Germany is the number one pharmaindustry, he complains. For instance, he says, in 2004 all ceutical market in Europe; it is by far the biggest generic non-prescription drugs were excluded from reimburse- market in the continent with the highest penetration of ment, resulting in a massive decrease of investments in the generic drugs among OECD nations; it is currently the European leader for commercial clinical studies; it is the secOTC segment. Some outsiders may perceive the German pharmaceu- ond biggest biotech hub worldwide; it is one of the world’s tical market – not long ago known as the Pharmacy of top five pharmaceutical manufacturers; and more. Germany’s excellence in medical science has rendered the World – as a sad testimony of the negative effects of over-regulation, cost-containment policies and high labor the country the fame of the “land of innovators,” with 77
Export Ratio of the Pharmaceutical Companies in Germany Foreign sales as percent of total sales 60 50 40
30 20 10 0
2008: provisional data
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2007 Source: Federal Statistics Office
Nobel Prize winners in the fields of medicine, chemistry and physics in the 20th century. Companies such as Bayer Schering Pharma, Boehringer Ingelheim and Merck KgaA have long benefited from German scientists’ bright ingenuity - which have produced classics like morphine and aspirin. The main strengths that justify such a durable predominance in the international pharmaceutical scene are Germany’s long standing know-how in manufacturing and logistics; its great expertise in areas ranging from basic research up to high-tech research and production; and the immediate market access given to drugs after approval. The German competitiveness is translated in its exportoriented tradition that benefits from a privileged location at the center of Europe and at the doors of fast growing emerging Eastern European markets. Still, in the last twenty years, Germany has only barely been able to maintain its position as a production centre. It responded for 8% of the overall pharmaceutical yield from Europe, Japan and the USA in 2007, down from 9%
in 1990 – and if we considered the appreciation of the Mark and Euro in the period the figures would be even worse. The struggle of the German federal government to deal with the increased budgetary constraints and rising health care costs is enormous, especially in a country that for decades has provided universal health care coverage to its citizens. The ageing of the population; the continuous reduction in the numbers of young taxpayers; the rise of unemployment and decrease in wages; plus the dramatic increases in some chronic diseases such as diabetes are all good reasons for concern. Unfortunately, finding the right balance between rising costs and shrinking revenues is not a “privilege” of Germans. However, what is unique about Germany is how it has stopped the rise of health care expenditures. From 1996 to 2006, the share of the GDP spent on health care services went from 10.4% up to 10.6%, much less than other OECD countries such as France, which scaled its out goings from 9.8% to 11.1%.
Therapeutics and Diagnostics from Biotest
Biotest is a company that researches and manufactures pharmaceutical, biotherapeutic and diagnostic products and has specialised in the areas of application of immunology and haematology. Biotest AG · Landsteinerstr. 5 · 63303 Dreieich · Germany · Tel. +49 (0)6103 801-0 · www.biotest.de
12.08.2009 15:42:57 Uhr JANUARY 2010 FOCUS REPORTS S4
Generics are the key, as the strategy heavily rests on the German government and industry’s capacity to increase their penetration in the market. According to Peter Schmidt, CEO of ProGenerika, the German association of generic producers: “Generic drugs are responsible for more than 63% of the market from the statutory health insurance system (SHI) – which covers 90% of all Germans – and in the off-patent market generics hold 79% of the market share.” This is especially relevant for public coffers since, once a drug goes off-patent, generic producers take up to eight weeks to enter the market and drop average prices by more than 75%. Cornelia Yzer, General Director of the German Association of Research-Based Pharmaceutical Companies (VFA), recognizes that the German government imposes a high level of regulation. However, according to her, German politicians are aware that further restrictive rules will have a negative effect on R&D in the country. As Ms. Yzer highlights: “the federal government has done a lot in the last two years to promote R&D in the pharmaceutical industry; they have understood that the only way to create
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a clean and knowledge-intensive economy is to constantly promote long-term R&D in Germany and cooperate closely with innovative sectors such as the pharmaceutical industry.” Balancing all the pros and cons, if in terms of production the country has lost positions in international ranks, it is undeniable that Germany is at the forefront in biotechnology and other highly innovative-intensive areas such as genetically manufactured pharmaceuticals. On the one hand, the German federal government is trying to cut costs in the health care sector and, on the other, it is firmly incentivizing innovation through support to research, foreign direct investments (FDI) and German start-ups. This paradox explains why even though the German pharmaceutical market has grown below the OECD average in the last 20 years its pharmaceutical industry has done fairly well, mostly thanks to exports. The German market has become small for its pharmaceutical industry and now its export rate is up to 56% of the national production, 20% more than 15 years ago. As the German pharmaceutical industry moves forward by focusing on international markets, it is difficult to ascertain which role the German market will play for its own industry.
sanofi-aventis in Germany Welcome to our Frankfurt site BIOTECHNOLOGICAL PRODUCTION In Germany, over 3,000 employees are directly or indirectly involved in biotechnology. Within this area, the company specialises in producing biotechnological active ingredients and manufacturing sterile medicines. These include, in particular, insulin and insulin analogues in Germany as well as lowmolecular-weight heparins. INSULINS sanofi-aventis’ Frankfurt site is one of the world’s largest insulin production facilities. The company has taken a significant step towards consolidating its position as a world leader by producing the active ingredients for insulin analogues. Both the basal insulin “insulin glargine” (Lantus®) and the fast-acting insulin “insulin glulisine” (Apidra®) are produced in Frankfurt. The company’s international development centre for medicinal products and its new factory for manufacturing its self-developed insulin pens also reflect its changing strategy as it moves towards becoming the leading health care group. AT A GLANCE · Multidisciplinary teams · Several large-scale biotechnological production facilities · Licensed GMP facilities (cell cultures, bacterial fermentation) · Bio-centre: fermentation, cell cultures, ultrafiltration, chromatography as well as class C and D clean rooms; processing: HPLC, chromatography, nano, micro and ultrafilters, class C and D clean rooms, freeze-drying · Innovative cell-culture technology · Highly advanced bioanalytical systems · New phase III biotech development projects currently transferred into routine manufacturing, including drug substance classes like monoclonal antibodies and plasmid DNA
Sanofi-Aventis Deutschland GmbH is part of the French sanofi-aventis Group. As a leading health care company, sanofi-aventis is always looking for new ideas which can help to improve the health and quality of people’s life throughout the world. The Group develops, manufactures and markets innovative medicines and vaccines, thus making a significant contribution towards people’s well-being. The company’s core business is centred around its prescriptiononly medicines and vaccines as well as the sale of off-patent medicines. Around 100,000 people – all of them committed to making medical advancements possible – work for the company worldwide. More than 17,000 of them (including the staff at Sanofi Pasteur) are involved in research only. Based at over 20 research and development centres on three continents, they come up with new, effective and well-tolerated medicines. These then make up the group’s portfolio of active ingredients – one of the most diverse and innovative anywhere in the pharmaceutical industry.
Germany – Land of ideas, Land of rules
ermany, under the leadership of Otto von Bismarck in the late nineteenth century, was one of the first countries to introduce a system of widespread health care insurance. Today, every person in employment has to pay the Krankenkassen – the statutory health insurance program (SHI) – or opt out and pay a private health insurer. A system that survived more than a century and reached practical universal coverage decades ago is a masterpiece of sustainability and a showcase for countries like the USA, still debating over universal care while spending a much higher share of its GDP on health care – 10.6% in Germany versus 15.3% in the USA. However, the bill for the success of the German health care system is now starting to look scary for some. The way the German government has dealt with the sharp increase in health care costs and relative decline in revenues has been unevenly twofold: it has strictly tackled costs while being loose on the increase of contributions. Needless to say, a tax increase or a raise on health care contributions would be much more unpopular than cutting revenues from heath care providers and pharmaceutical producers. According to Ms. Dorothea Bronner, CEO of the G-BA (Federal Joint Committee), – an institution created by the health care reform of 2004 and that unites health insurers, physicians associations and hospitals deciding on the cost effectiveness of new therapies: “The combination of a highly profitable industry with a universal health care system represents an unsustainS7 FOCUS REPORTS
able burden that has to be rebalanced in order to guarantee future generations a decent and affordable health care system.” However, according to the VFA, in 2008 medicines and medical devices accounted for only 6% of SHI expenditures and the German prices were in the middle range among European countries – even though its income per-capita is one of the highest. With the Health Care Reform Act that went into force on the 1st of April of 2007, the German Ministry of Heath intended to provide a new base for the general financing of the health care sector, as well as to modify part of the legal framework for the pharmaceutical industry. It established a cost-benefit assessment performed by the IQWIG (Institute for Quality and Economy in Health Care) – a government agency whose main objective is to give technical recommendations to the G-BA. From then on, new drugs underwent an assessment on whether they had a real therapeutical improvement compared to existing substances, which would justify reimbursement. Another big change brought by the Health Care Reform Act of 2007 was the directive that allowed health care insurance companies to rebate directly with pharmaceutical companies. Before this reform, price competition between generic companies was fierce; nowadays, with the additional power given to health care insurers, many in the industry say it is unbearable. Sven Dethlefs, CEO of Teva Germany, agrees that this reform will generate further consolidation in the generic market. He believes that only those companies that manage to increase their efficiency, lower their costs and expand their scale will be able to survive. To do so and achieve the 5% market share Teva aims to have in the German generic market by
® sofort Retacrit ab sgruppe ag in der Festbetr der Stufe II. ei für Ihre Zuzahlungsfr n! Patiente
Retacrit® von Hospira • Zur Behandlung der Anämie1 • Vergleichbares Sicherheits- und Wirksamkeitsprofil mit Epoetin alfa in den zugelassenen Indikationen2,3 • Wirkstärken von 1 000 - 40 000 I.E. • Preisvorteil von bis zu 38%4 Retacrit 1.000 I.E./0,3 ml/- 2.000 I.E./0,6 ml/- 3.000 I.E./ 0,9 ml/- 4.000 I.E./0,4 ml/- 5.000 I.E./0,5 ml/- 6.000 I.E./ 0,6 ml/- 8.000 I.E./0,8 ml/- 10.000 I.E./1,0 ml/- 20.000 I.E./ 0,5 ml/- 30.000 I.E./0,75 ml/- 40.000 I.E./1,0 ml Injektionslösung in Fertigspritze Wirkstoff: Epoetin zeta. Zusammensetzung: 1 Fertigspritze enth. 1.000/2.000/3.000/4.000/5.000/6.000/8.000/10.000/20.000/3 0.000/40.000 I.E. Epoetin zeta. Sonst. Bestandteile: Na-Dihydrogenphosphat-Dihydrat, Na-Monohydrogenphosphat-Dihydrat, NaChlorid, Ca-Chlorid-Dihydrat, Polysorbat 20, Glycin, Leucin, Isoleucin, Threonin, Glutaminsäure, Phenylalanin, Wasser f. Inj.-zwecke, Na-Hydroxid, Salzsäure. Anwendungsgebiete: Anregung d. Bild. v. roten Blutkörperchen im Knochenmark. Symptomatische Anämie aufgr. chron. Nierenerkr. bei Erwachs., Jugendl. u. Kindern unter Hämodialyse u. bei Erwachs. unter Peritonealdialyse; Behandl. einer schw., durch eine Nierenerkr. entstand. Anämie m. Beschwerden bei Erwachs., die noch nicht dialysepflichtig sind; Anämie u. z. Verringerung d. Notwendigk. einer Bluttransfus. bei Erwachs. m. solid. Tumoren, malign. Lymphom od. multipl. Myelom unter Chemotherapie u. einer hohen Wahrscheinlichk. für eine Bluttransfus.; bei Pat. m. mittelschwerer Anämie zur Eigenblutspende vor Operationen. Gegenanzeigen: Überempfindl. gg. Erythropoetine od. einen der sonst. Bestandt.; Pat., bei denen unter Behandl. m. irgendeinem Erythropoetin eine Erythroblastopenie auftrat; hoher, durch blutdrucksenkende Mittel, nicht ausreich. kontrollierbarer Blutdruck; Pat., die keine blutverdünnenden Mitt. zur Vorbeug. v. Blutgerinnseln erhalten dürfen; Pat., bei denen vor einer Operation eine Eigenblutspende geplant ist u. die innerhalb eines Monats vor d. Behandl. einen Herzinfarkt od. Schlaganfall erlitten haben, die an instabiler Angina pect. leiden od. bei denen ein Risiko für die Entstehung v. Blutgerinnseln in d. Venen besteht od. schon einmal aufgetreten ist. Besondere Vorsicht bei: Folgenden früher od. aktuell bestehenden Krankheiten: Epilept. Anfälle, Lebererkrank., Krebs, Blutarmut anderer Ursache, Herzerkrank. (z.B. Angina pect.), Durchblutungsstör. m. Folge v. Stechen u. Missempfind., kalten Händen od. Füßen od. Muskelkrämpfen (Beine), Blutgerinnselbild. od. Blutgerinnungsstör., Phenylketonurie, Nierenerkrank., Schwangerschaft u. Stillzeit. Nebenwirkungen: Kopfschmerzen, insbes. plötzlich, stechend migräneartig; Verwirrtheit u. Krampfanfälle (Warnsignale v. plötzl. Blutdruckanstieg). Hautausschlag; grippeähnl. Sympt. (Kopf-, Gelenkschmerzen, Schwächegefühl, Schwindel, Müdigkeit); Thrombozytenanstieg, Gefäßerkrankungen, thrombotische Ereignisse in Blutgefäßen wie Durchblutungsstör. d. Herzens, Herzinfarkte, Hirnblutungen, Schlaganfall, vorübergeh. Durchblutungsstör d. Gehirns, tiefe venöse u. arterielle Thrombosen, Lungenembolien, Aneurysmen, Thrombosen d. Netzhaut u. Blutgerinnsel in künstl. Nieren; Selten: Überempfindl.-Reakt. einschließl. Schwellungen vorw. im Augenlidbereich u. Lippen (Quincke-Ödem) u. schockartige allerg. Reakt. m. Sympt. wie Kribbeln, Rötung, Juckreiz, Hitzegefühl u. beschleunigter Puls. Sehr selten: Nach monate- bis jahrelang. subkut. Behandl. Erythroblastopenie (PRCA). Pat. m. Nierenerkrank.: Blutdruckanstieg, Shunt-Thrombose bes. bei Pat. m. Neigung zu niedr. Blutdruck od. Komplikat. an arteriovenösen Fisteln. Bei Tumorpat.: Thrombot. vaskuläre Ereign., Blutdruckerhöh. Weitere Informationen siehe Fach- bzw. Gebrauchsinformation. Verschreibungspflichtig. Stand: November 2008. Zulassungsinhaber: Hospira Enterprises B.V., Taurusavenue 1921, NL-2132 LS HOOFDDORP, Niederlande. Lokaler Ansprechpartner: Hospira Deutschland GmbH, Rablstr. 24, 81669 München. Bei Erwachsenen: i.v.- Behandl. d. symptomatischen Anämie bei chronischer Niereninsuffizienz unter Hämodialysebehandl. u. unter Peritonealdialyse; i.v.- Behandl. d. schweren symptomatischen renalen Anämie bei nicht dialysepflichtiger Niereninsuffizienz, s.c.Behandl. d. Anämie und Reduktion des Transfusionsbedarfes bei Patienten mit soliden Tumoren, malignem Lymphom o. multiplem Myelom, die eine Chemotherapie erhalten u. bei denen das Risiko zur Transfusion auf Grund des Allgemeinzustandes besteht. Bei Kindern und Jugendlichen: i.v.- Behandl. der symptomatischen Anämie bei chronischer Niereninsuffizienz unter Hämodialysebehandl. 2 Wizemann V, Rutkowski B, Baldamus C et al. Comparison of the therapeutic effects of epoetin zeta to epoetin alfa in the maintenance phase of renal anaemia treatment [published erratum in Curr Med Res Opin 2008; 24(4): 1155]. Curr Med Res Opin 2008; 24(3): 625-637 3 vgl. EPAR für Retacrit® (H-C-872) 4 im Vergleich zum Festbetrag des Referenzproduktes (Erypo®); Stand Lauer-Taxe: 15.04.2009 1
2012, he has two main directives. Primarily, Mr. Dethlefs is focusing his attention on creating a sole Teva entity in the German market, which today is divided between different units such as GRY Pharma, IVAX, AWD and Teva Pharma. They were a result of Teva’s past acquisitions in search of greater scale and efficiency, especially in the case of IVAX in 2006 and AWD Pharma in 2008. “The integration of Teva’s different legal entities is our biggest challenge in the
German market; so many different identities and brands weakens Teva’s recognition among costumers,” he says. The complete integration of the group should be finished in the next two years. Secondly – and more related to the increased competition created by the last health care reform act – Teva is aggressively bidding within the rebate system in order to automatically gain market share. Winning a rebate with a big SHI provider can jump start the
Time To Pay Attention Attention Deficit and Hyperactivity Disorder (ADHD) has long been part of the human condition, but it has only gained notoriety in the last 30 years, as sufferers and physicians become more aware of the disorder. Today, (ADHD) is a niche therapeutic specialty that has grown at a rapid pace in Germany over the last five years. The market for treatment increased in value from USD 23 million in 2004 to USD 145 million today, due among other factors to increased diagnosis rates. Mr Terp, General Manager of Shire’s Deutschland’s Specialty Pharma Business Unit, predicts that the ADHD market will continue to grow in Germany just as it did in the US. In Germany, there is currently no indication for ADHD in adults. This was historically the case in the US, but this has now changed, with the result of dramatically increasing the demand for effective ADHD treatment. Shire Deutschland is excellently positioned to capitalize on this growth, as Mr Terp explains. “Shire is a leading company in ADHD, because the company has innovative franchise of products for this disease, and one of the key advantages of this is that physicians need to tailor the ADHD treatment for every patient. At the end of September 2009, Shire launched Intuniv in the US, and two years ago we launched Vyvanse, and now in Europe the company has acquired Equasym from UCB.” It is this success in tackling ADHD in the US that has propelled Shire’s sales in the country over the last few years, and today the US market accounts for 70% of the company’s global sales. However, Shire is launching an ambitious internationalization strategy, which the company hopes will mean that by 2015, 50% of sales will come from the US, with 25% from Europe, and the remaining 25% from emerging markets. Over the 20 years of its existence, Shire has traditionally grown through mergers and acquisitions. One of the most important of these recent acquisitions took place in Germany, where the company acquired the renowned German biotech company Jerini. Jerini’s main product is Firazyr, which will complement the Human Genetic Therapies (HGT) division of Shire, and its products to tackle serious but rare maladies such as Gaucher disease, Hunter syndrome and Fabry disease.
market share of any company in the German market, since some health care insurers hold a considerable share of the market (AOK, the biggest one, covers 35% of all Germans). Only companies with an extremely efficient cost-structure like Teva will be able to take advantage of that. Cegedim Dendrite gives another good example of how companies can turn challenges into promising opportunities in the world’s third biggest pharmaceutical market. Before the health care reform act of 2007, health insurance companies simply had to pay what physicians prescribed. With the new system, they can bargain and auction big purchases of drugs that will be later reimbursed. As Arnim Jost, the General Manager of Cegedim Dendrite Germany says: “Since the 1st of April 2007, Cegedim Dendride has seen an increased search for commercial key management and political account management from the pharmaceutical industry.” Before, the industry could introduce small changes in their products without any assessment on whether these advances really benefited patients proportionally to the price increases, but now the situation has changed.
Get up, stand up
nfortunately, not every company is in the position of taking advantage or adapting quickly to the constant changes in the German pharmaceutical environment. However, instead of joining the lines of those who simply complain about the system or threaten to downgrade their investments in the country, a few wellestablished companies are using their influence and proved commitment to Germany to build a constructive dialogue with policy makers.
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authorities that set the stanAs Cameron G. Marshall, dards. In return, we expect a General Manager of GSK system that is consistent, harGermany, the fi fth biggest monious, clear and transparpharmaceutical company in ent. GSK is very determined the German market, puts it: to make it happen.” “GSK believes very strongly Sanofi -Aventis is another in building a constructive and player supporting this porespectful partnership with sition. With revenues of governments, doctors and more than USD 5.8 billion, sickness funds. The company Martin Siewert, the Gerwants to build productive man General Manager, recmutual relationships where it ognizes that the burden of attempts to stand in the shoes Left to right: Cameron Marshall (GSK), Martin Siewert (Sanofi-Aventis) the current over-regulated of its costumers and partners system for investments in inand not only see the world from its own point of view.” According to Mr. Marshall, novation is big. However, he qualifies, the immediate market “Value” is the language that companies should speak. By say- access and incomparable human resources that Germany ofing so, he means that companies should fully accept their re- fers make companies like Sanofi -Aventis eager to further insponsibility to prove the value of their products with support- vest in the country, and to convince politicians of the imporing evidence to their peers, physicians and government. “The tance of their investments to keep Germany as a powerhouse pharmaceutical industry must be prepared to engage with of knowledge and innovation. “My main desire is to work
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closely with the German industry and government in order to rebuild some of the features that made Germany once known as the Pharmacy of the World,” he states. The recently elected centre-right coalition, still presided by Chancellor Merkel – from the Christian Democratic Coalition (CDU), – in its new alliance with the liberal Free Democratic Party (FTP) has already signalled what future reforms will aim at. The main proposals on the table are to freeze employer’s contributions to the SHI system as a share of worker’s pay and set worker’s contribution at a fi xed premium, instead of the current fi xed share of their wages. Now, the government target seems to be health insurers. In charge of passing such reforms is the liberal Mr Philipp Rösler, who will try to both stop future rises in health care costs from being transferred to em-
ployers and to promote a competitive market in health care. This seems in line with the desires of the pharmaceutical industry, which for too long has been complaining about being the only target of the German government in its quest to make health care cheaper.
Building on Germany’s scientific muscle
he pharmaceutical industry, like few others, benefits greatly from the strengths and competitive advantages offered by Germany. Being the first pharmaceutical market in Europe and at the heart of the continent – served by an extremely efficient and world-class infrastructure –
Changing Diabetes, Changing Germany “The costs involved in treating diabetes in Germany are USD 23 billion annually,” says Martin Soeters, President of Novo Nordisk Europe, “whilst the amount spent on diabetes drugs is USD 1.74 billion, or 7% of the total figure. 75% of this figure is spent on the treatment of late complications. If diabetes treatment is optimized, this figure can be dramatically reduced.” Novo Nordisk, world leader in diabetes care, has decided to make reversing this figure a major priority. Stepping out of the realms of the lab, Novo Nordisk has jumped into the world of Martin Soeters (Novo Nordisk) political lobbying. The company recently opened a European Changing Diabetes Advocacy Office in Brussels, whose sole priority is to get diabetes on the EU political agenda. This culture permeates through all levels of the company. After over 30 years with Novo Nordisk, Mr Soeters has one clear altruistic aim. “In five years from now, I hope I will be able to tell my future grandchildren that I did not just sell three million insulin vials to patients, but that I have done something significant for their wellbeing.”
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months to completely optiGermany enjoys a scale and mize the production site and market access no other counfurther investments will be try can dream of. The Europedone in the same direction an pharmaceutical market in order to continually optialone represented 32% of the mize and integrate the Gerglobal pharmaceutical market man operations with the rest in 2008, according to IMS of the group, making the best numbers, and its privileged out of our unique human remarket access to important sources and market access,” Eastern countries such as Russays Ms Walinger. sia, Ukraine and Middle EastThe German pharmaceuern nations make Germany an even more strategic hub for Left to right: Gaëlle Waltinger (Bausch&Lomb), Ulrich Eggert (Astellas) tical attractiveness for foreign direct investment (FDI) global pharmaceutical players. reaches beyond the Atlantic. On top of its geographic and commercial attributes, the most valuable asset Germany Astellas is prime example of a Japanese company that chose offers pharmaceutical companies is its highly skilled work- Germany as an important base for their international operaforce. With little more than 80 million people, the country tions not only due to its great market potential but also thanks pumps every year around 70,000 new graduates in biology, to its competitive advantages. Long established in the German chemistry and engineering and some 12,000 in the field of market through its predecessors Yamanouchi and Fujisawa, pharmaceuticals. Besides, more than 343 German universi- the company has nowadays around 400 employees covering a ties and over 330 research institutes are increasingly active in partnering with the private sector in translational research. This sounds like music for the pharmaceutical industry. The sector accounts for more than 10% of the overall industrial investments in R&D. The 50 members of the VFA alone were responsible for investments of USD 7 billion in R&D in Germany has a great tradition of successful fam2008 and responded for more than 90,000 jobs with 17,000 ily businesses. For instance, Merck KGaA, founded of them in R&D related areas. in 1668 is one of the oldest existing pharmaceutical Bausch&Lomb is one of the foreign companies taking adcompanies worldwide, and still majority owned by the vantage of the German expertise in research and manufacMerck family. turing. According to Gäelle Walinger, CEO of Bausch&Lomb Centuries on, what are the odds for small German Germany, after the acquisition of Bausch&Lomb by the family owned pharmaceutical companies in such a Warburg Pincus group, the integration of the German accompetitive market? Dr. Franz Köhler Chemie might tivities with the rest of the group has increased considerably. have a good answer. This second generation pharma“Bausch&Lomb has taken advantage of our well-educated ceutical company that carry the name of its founder, specialists in R&D and manufacturing and sent them to other was created in 1959 and handed over to Gernot parts of the world for a determinate amount of time – China, Köhler, Franz Köhler’s son, 25 years ago. Nowadays, for instance – to train our counterparts and help them build Dr. Franz. Köhler Chemie is a leader in organ protecnew facilities.” tion solutions, being the first company to launch this The group is now trying to harmonize their international type of product already in 1964 with Cardioplegin. operations and use the assets of their different international Since the launch of this cardioplegic solution, Dr. bases – Germany being their lighthouse in Europe– to ratioFranz Köhler has developed other products such as nalize and specialize their production lines, unifying their antidotes, contrast media, electrolyte solutions, zinc brands in the main markets. This had a special impact on and other therapeutics, e.g. for anesthesia, which have been developed in very close cooperation with a wide Bausch&Lomb Germany’s operations since their brand and variety of experts ranging from surgeons to pharmaproduct portfolio is linked to Dr. Mann Pharma, an imporcologists not only from Germany but also from the tant local player acquired in 1986. USA, China and India. “With the current harmonization and specialization put
Keep it in the family
in place, Bausch&Lomb Germany closed its plant for three S11 FOCUS REPORTS
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Research is carried out here Our research focuses on: analytical chemistry, pharmaceutical development and clinical research. Our findings lead to innovative and proven quality compounds. In this way, we improve quality of life for many people. Here we produce ... The main focus of our product portfolio is medication for pain and diabetes therapy as well as for the treatment of disease relating to the cardiac and circulatory system or the thyroid gland. Patients have placed their trust in our medicines for over 100 years. From here we apply our know how on the market ... Especially in the eastern European markets; there we have over 31 representative offices. We supply patients worldwide within the Italian Menarini Group network. BERLIN-CHEMIE, a company in the Menarini Group, stands for tradition and innovation from Berlin.
For further information: BERLIN-CHEMIE AG Âˇ Glienicker Weg 125 Âˇ 12489 Berlin telephone: (030) 67 07-0 Âˇ internet: www.berlin-chemie.de
wide range of activities from clinical development to distribution. With a turnover of more than USD 290 million only in the German market, Astellas is a leader in transplant medicine and urology. In the words of Ulrich Eggert, Astellas Germany Managing Director, “Besides transplant and urology, Astellas Germany has a very comprehensive portfolio including OTC, dermatology and pneumology products, and the company is working in the clinical development of several products yet to enter the market.” When asked about the importance of the German market for the group as a whole Mr. Eggert is categorical: “Germany is the biggest European market for Astellas, being our main contributor in sales and profits. Therefore, whatever happens to our German operations will invariably affect Astellas’ activities in the continent. According to Gernot Köhler, the future of the company relies on its internationalization: “Dr. Franz Köhler Chemie aims to extend its export share from the present 35% up to 67% in the coming years, remaining the leading provider of organ protection in the German and international markets alike,” he says. Being an independent company free from short-term pressures from shareholders will clearly help Köhler pass on the heritage of a fast growing company to future generations.
It’s better if it’s “Made in Germany”
owadays, Germany concentrates a considerable international share of highly sophisticated activities throughout the entire pharmaceutical value-chain
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even without hosting the headquarters of any top ten pharmaceutical multinational. Pharma giants from neighboring countries, especially Switzerland – with its top three players, Novartis, Roche and Nycomed heading the list – take special advantage of their proximity to Germany and have made the country home to some Andreas Fibig (Bayer Schering of their biggest – if not the Pharma) biggest – R&D and production operations worldwide. Hagen Pfunder, CEO of Roche Germany, makes it clear: “Germany has always been regarded as a strategic country for Roche not only because of its market size but also due to its leadership in cutting-edge technologies – it is the second biggest biotech hub in the world and offers great opportunities that meet perfectly Roche’s present and future ambitions.” Mr. Pfunder summarizes the reasons behind Germany’s protagonist role within the Roche group: “It’s thanks to Germany’s unique technological expertise; highly skilled personnel; well established and cutting-edge research institutes and biotechs; and stable market environment that Roche has placed the country at the heart of its present and future strategies and invested more than USD 2.6 billion on expanding its R&D and production capacity.” Nycomed, another Swiss giant, has also successfully bridged the integration between the German and Swiss pharmaceutical industries. Germany is by far its main in-
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ternational market and its German headquarters are in Constance, a city in the shores of an idyllic Alpine lake that carries the same name – the similarities with Switzerland are not a mere coincidence. In the words of Mr Stefan Brinkmann, Nycomed Germany Managing Director: “Germany, being the biggest international market of Nycomed, influences greatly Nycomed’s global corporate strategy.” Being so close to its headquarters, surely makes the necessary coordination between the market, research and production activities of the subsidiary and its main office much easier. Sanofi-Aventis, France’s biggest pharmaceutical group, also chose its neighbouring country as home to one of its largest research and development facilities, at the Frankfurt-Höchst industrial park. This strategic production, manufacturing and development center has approximately 7,800 employees out of the 10,000 members of the Sanofi-Aventis group in Germany – one in every ten employees of Sanofi-Aventis is based in the country. Of the USD 6.7 billion invested in R&D worldwide in 2008, Sanofi-Aventis directed USD 870 million towards Germany. Since Sanofi-Aventis’ revenues in the country reached
TE VA GENERICS AWD. PHARMA GRY- PHARMA IVA X PHARMA
Vitamin-/Mineralsupplementation Onkologie Schmerztherapie Kardiologie Osteologie Pneumologie Infektiologie Urologie Nephrologie Gastroenterologie Diabetologie
USD 5.8 billion in the same year, the group invests 15% of its German revenues in R&D. Even with the challenges previously highlighted by Martin Siewert, the German General Manager of Sanofi-Aventis, he recognizes the importance of the German operations to the group as a whole. For instance, two years ago Sanofi-Aventis inaugurated a new medical device site in Frankfurt, a turning point in the creation of a competence center for medical devices for the whole group. “Besides, the German operations received important investments in R&D into cell culture manufacturing of clinical materials; which highlights the key contribution of Sanofi-Aventis Germany to the groups’ global development programs in all monoclonal antibody areas – one of the most important bets of Sanofi-Aventis for the future” he says. Sanofi-Aventis Germany is especially relevant in the field of diabetes. The German affi liate was responsible for the entire research, development, clinical production, pharmaceutical formulation and packaging of Lantus, Sanofi-Aventis’ insulin drug star. This product contributed decisively for the USD 5.8 billion revenues in 2008, especially its exports. The German competitiveness is also reflected in Germany’s prominence in clinical research. According to Cameron Marshall, the General Manager of GSK Germany, the country is the second biggest clinical market after the USA. “The clinical quality found in Germany is as high as the one found in the USA, but internal and external costs can be twice as cheaper in Germany than in the USA,” he says. The high quality of German doctors and the ethical guidance in which the German federal authorities carry the process of clinical approval are Germany’s main advantages. GSK has partnerships with more than 1,200 test centers for clinical studies of 30 innovative substances involving more than 8,000 patients in the country from phase I to III. As Johannes Löwer, president of the German Federal Institute for Drugs and Medical Devices (BfArM), points out the number of clinical trials’ applications in Germany has increased almost threefold in the last two years. Even though this adds pressure to the system, it is a good sign of the advantages that Germany has to offer in the clinical research field.
Gute Gründe, die für Teva sprechen! » Weltweit die Nr. 1 im Generikageschäft » Immer unter den 3 Günstigsten* » Rabattpartner der größten Krankenkassen AOK, BKK, IKK und LKK
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GENERIK A . NATÜRLICH TE VA
* Ausgenommen Onkologie, Nephrologie und Pneumologie
The biggest and the best is no drama for Bayer Schering Pharma
hen people think of Bayer, Aspirin immediately comes to mind. One hundred years after the German company lost the patent on one of the most
versatile and wonderfully simple painkillers, Bayer Schering Pharma today is about so much more. Andreas Fibig, its CEO, believes that the firm has a very good chance of rebuilding former successes, thanks to an enviable position in the BRIC countries and an innovative approach to pharmaceuticals. Bayer Schering Pharma wants to be a top ten company by 2015, he declares. This is an edited version of the interview that Focus Reports conducted with Mr Fibig. To read the full transcription of the interview, log on to Focus Reports’ dedicated pharmaceutical website at www.pharma.focusreports.net. Given that Bayer Schering Pharma seems to be finished with mergers and acquisitions for the time being, what are the company’s strategies for consolidating and advancing its position worldwide? Bayer Schering Pharma has a growth strategy in place that will let the company grow above the market over the next couple of years, which is driven by its strong internal pipeline, and differentiates the company from its competitors, in that it is not facing any LOE (Loss Of Exclusivity) on its products. The company has a very strong position in emerging markets. Bayer Schering Pharma was the number one healthcare company in China last year, the third in Russia, and the sixth in Brazil. In many of these markets, the company has a much stronger position than any of its competitors. Many of these emerging markets still have very strong double-digit growth, and this will be a big help in propelling the growth of the company in the years to come. How challenging do you think that aim of sustainability will prove to be for Bayer Schering, given the global trends we are seeing today? Research always comes into the discussion about sustainability over short-term strategies. R&D productivity within the industry is still suffering, and has been for more than a decade. As an industry we have been investing more than 11% of our budgets in R&D during this time, but the outcome has been much less than we have been accustomed to. Companies have to find a way to finance and prioritise research and development in these new times. Since I was appointed at Bayer Schering Pharma, the company has looked at what it can do to change the traditional R&D model, and increase its efficiency, looking at what the company has to do on its own, what it can do with partners, and how it can build a smart network with other companies to help absorb innovation into the business. Maintaining the company’s strengths in the German market is also important in the search for sustainability. Although some companies are focusing either on being the S17 FOCUS REPORTS
biggest or the best in the industry, at Bayer Schering Pharma we believe that it is possible to be both at the same time. Given that you believe Bayer Schering Pharma has the potential to be the biggest and best pharmaceutical company in Germany, what is your vision for the future development of the business? Harald Stock (Grünenthal) BSP wants to be a top ten company by 2015. The company is looking at ways to consolidate its achievements in the therapeutic areas where it has previously has great success. With women’s health, we have shifted our focus in research to endometriosis and myoma, whereas in the past, it was very much contraception. Bayer Schering Pharma has a strong diagnostic imaging business: the company is the world market leader, and today it is building a molecular imaging business, and the first project will be an Alzheimer’s tracer, which will hopefully be accepted by EMEA, and we can launch it in the 2011-12 timeframe. That will be a huge breakthrough.
Exit door - East
esides all the hard earned attributes that Germany has developed throughout its large development path, its central location and historical ties to the East are a fortune much appreciated by the pharmaceutical industry. The example of Berlin Chemie/Menarini is very illustrative. This once Eastern Germany company was acquired after the German unification by one of the biggest family owned Italian pharmaceutical enterprises, the Menarini group. In one bold move, Menarini opened the biggest European market and paved its way towards the East. “When I joined Berlin Chemie in 1997, its revenues were around USD 145 million; in 2008, they reached the USD 1.45 billion level – in eleven years our figures were multiplied by ten,” celebrates Reinhard Upperkamp, the chairman of Berlin Chemie. These numbers were only possible thanks to Berlin Chemie’s wide expansion of its product portfolio in fast growing areas such as cardiovascular diseases, diabetes, painkillers and ovarian cancer and thanks
Diabetes will be defeated in the laboratory. That’s why Novo Nordisk invests millions into research every year. By staying at the forefront of new developments in diabetes treatment, we can offer a wide range of therapies and delivery systems that make life better for millions of people.
Changing Diabetes® is a registered trademark of Novo Nordisk/AS.
Our partnership with the Oxford Centre for Diabetes, Endocrinology and Metabolism enables research and clinical trials that accelerate the search for new treatments. But part of our research focus also lies with organisations such as the world-renown Hagedorn Research Institute, an independent arm of Novo Nordisk, where the latest advances in stem cell research are being realised. Because we don’t think it’s enough to be an innovator in diabetes treatment. Our focus is on leading the fight for a cure.
to its further penetration in Western Germany and in important markets such as Russia, Ukraine and the Baltic countries. The expectations to further use Germany as an exit door to eastern markets are high. As Mr. Upperkamp puts it: “Today, Germany accounts for 30% of our market, but our target is to lower its share to 10% thanks to the group’s increased internationalization.” According to him, in the coming years the main markets for Berlin Chemie will be Russia, Ukraine and Poland; markets that put together count with a population almost three times the size of the German one. For him, Germany’s advantages as an export hub towards more than 30 different countries worldwide are unequivocal. “Germany offers important incentives for the pharmaceutical industry; in addition to its free pricing policy, it serves as a cutting-edge R&D base with an extremely qualified workforce and has high quality standards that guarantee the superiority of the products Made in Germany.” Germany’s reputation as a “quality haven” plays a
decisive role for German companies in Eastern markets. According to Gregor Schulz, Chairman of Biotest, “The biggest bet to continue with Biotest’s steady growth is to keep on internationalizing its business; for that, Eastern Europe, together with the USA, are our main markets.” Biotest’s strategy has two components. On the one hand, it is investing heavily in the American market, a more sophisticated environment that concentrates more than 40% of the immunoglobulin market worldwide – the company’s main niche area. On the other hand, it is investing in less saturated and fast growing markets such as Russia and Hungary, where it can leverage its international presence and gain forces to continue with its internationalization process. “In the past five years, Biotest nearly doubled its sales from USD 316 million in 2004 to USD 610 million in 2008. In the same period its earnings increased by nearly 200% reaching USD 80 million in 2008,” says Mr. Schulz. No doubts his strategy seems to be working. Celgene, an American biotech company based in Munich, has also grown considerably by looking east. It established itself in Germany in 2006 with a team of 3 people, but only three years later, it has more then 100 employees responsible for the German market as well as Austria, Eastern Europe, Russia and some Arabic countries. According to Michael Pehl, Managing Director of Celgene Germany, the most promising market for his affiliate is by far Russia. In his words: “Celgene is working hard to introduce a Multiple Myeloma (ML) product on the Russian market; however, the company has just been registered in Russia, so its operations are starting on a small scale.” Thanks to its booming business in other Easter European countries such as the Czech Republic and Poland, Mr Pehl is surer then ever that the sun do rises in the East.
Grünenthal: When pain brings success
o Germans manage pain better than others? Looking at the numbers of pain expert Grünenthal it would seem so. Today, the company is consolidating on an impressive international affiliate base, whilst at the same time taking advantage of the German quality stamp, and high levels of innovation and research. Harald Stock, CEO of Grünenthal since January 2009, explains some of the major turning points in the company’s develS19 FOCUS REPORTS
opment, and the challenges of being a family owned company with international aspirations. This is an edited version of the interview that Focus Reports conducted with Harald Stock. To read the full transcription of the interview, log on to Focus Reports’ dedicated pharmaceutical website at . What would you point to as the most important milestones for Grünenthal over recent years that have helped the company achieve the position that it is in today? We are amongst the top three companies worldwide in pain management. Our position is due to a very early internationalization of the company, particularly capitalizing on the Latin American region. Today, over 83% of our revenues come from outside of Germany, which leaves us in the unexpected position of our home market competing with France for title of Grünenthal’s largest market. The second milestone for Grünenthal has been the year 2009, when we launched Tapentadol, perhaps the only blockbuster that will make it to market in the early 2000s. Together with our partner J&J we have launched the drug in the US, and it will launch in Europe next year. That will drive growth, which is a great opportunity for us, and will help Grünenthal to double in size in the next five years. Given Grünenthal’s level of international development, how difficult has it been to maintain the German roots of the company, and how important is that for the company today? The German roots are very important regarding the research and development capabilities and the technical capabilities that Grünenthal has in the country. Keeping its German core is
very important to Grünenthal, and the company is very much committed to maintaining this and exploring it. On the other hand, Grünenthal’s strategy needs to strike a balance, because what fits for Germany does not necessarily fi t Ecuador, Italy or Spain. To be rooted in Germany but still be open-minded internationally is a constant challenge. Of my fi rst nine months at Grünenthal I will have spent about half my time in one of the international affi liates. Reaching out to the affi liates is one of the important things that we at Head Offi ce can do to make the people at the forefront of our business more successful. I have gained some extremely valuable insights, but it was also a signal for everyone to reach out and support the people at the front, those who see the customer day in and day out, because that’s what it’s all about.
Restructure your force
here are no doubts that the greatest attractiveness that Germany offers the pharmaceutical industry is its outstanding abundance of skilled and productive workforce. With a net added value of USD 145,000 per employee, (German Federal Statistics Office) the German pharmaceutical industry runs high in every international rank of productivity. But as the number of hunters outpaces the number of prey, pharmaceutical companies have to struggle to attract and retain the best talent inside their labs. The need for qualified and experienced staff is also magnified by the German over-regulated market, as Ulrich Eggert, Astellas Germany Managing Director, highlights:
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“Germany has a very regulated environment; therefore, you have to be better organized in terms of sales force and medical reps. This is why Astellas’ average age is 47, meaning that the company has the most experienced people in the market.” Raymond Francot, Gilead Sciences Germany’s General Manager, agrees. According to him, in such a competitive market, the secret for success doesn’t depend on increasing the head-count. Instead, success is built upon training people and promoting “great discipline, passion and focus amongst all of our staff,” as he puts it. Thanks to Gilead’s greater productivity, the company ranks above other big players in the industry that have much bigger workforces. Mr Francot concludes by saying: “Gilead has exceptional seasoned and mature people to do the highly skilled jobs that are expected from us – they are the reason for our success.” Hospira Germany concurs with the observation that attracting the best talent and organizing them well is paramount to achieving success. Marcus Blum, the CEO of Hospira Germany, says the main element behind Ho-
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spira’s double digit growth in the past years in the German market – and growth expectations of around 30% for 2009 and 45% for 2010 – was the construction of synergies between the different activities of the company and the complete training of its sales force. According to Mr. Blum, “The sales force effectiveness is extremely important and it’s a key element of Hospira’s success; the company is training its reps to cover the whole product portfolio in smaller territories.” The challenge this strategy arises is to keep the reps close to their traditional clients that are now under someone else’s territory. “We are trying to find the best strategy to cut costs and increase synergies with a holistic approach while maintaining the close contact we have with our clients,” explains Mr. Blum. The test is greater since Hospira is expanding its product portfolio in Germany. Nowadays, the company has product specialists focusing in oncology, nephrology and medical devices, but it also wants to become a key account manager in those fields – creating a whole package of products and services that can completely fulfill its clients’ needs. More than ever, the company is counting on its highly skilled workforce to do so. Other medical devices companies such as Baxter have a different approach. The company has reps in all areas where it operates, not having a model where one shoe fits all. It currently runs sales forces in hemophilia, dialysis, parenteral nutrition, anesthesia and biotherapeutics. Beyond a specialized approach, it is necessary for companies to understand costumers beyond the medical element, knowing about their economic and social needs. According to Wolf Kupatt, Managing Director of Baxter Germany, “This means that our reps are people that can satisfy costumers beyond the cheer medical value of Baxter’s products. In order to do so, they engage into a constant dialogue with our costumers, creating new models and approaches towards the optimization of patients’ care.” Thanks to Baxter’s wide portfolio in Germany, it is easy to understand why its strategy has been to have specialized reps for each of its main therapeutical areas. However, only to attract the best talent is not a guarantee of success. Companies clearly need to continually train and develop their workforce, providing them a clear path towards professional growth – or otherwise they will be left behind by the brightest. Mr Kupatt agrees: “Baxter has a strong emphasis on the carrier development of its employees. It is not enough to attract the best talent available in the market – it is paramount to know how to better develop them.”
The Biolab of the World
ermany’s success in the biotech industry depicts the benefits raised from solid public policies allied with market incentives and entrepreneurship. Cost-containment policies aside, the German fedLeft to right: Wolf Kupatt (Baxter), Marcus Blum (Hospira), Raymond Francot (Gilead Sciences) eral and local governments are widely praised for nurHowever, as Mr. Rüdinger puts it: “Germany is experituring start-ups and establishing public and private partnerships (PPPs) with biotech industry and research institutes encing a very positive tendency to value such partnerships. Only ten years ago it was almost impossible to convince the throughout the country. Added to Germany’s strong competitive advantages, such academic world that patents were of great value, whereas in policies have created the second biggest biotech hub in the the USA everybody understood so and institutions fi nanced world. Germany is home to the main research centers of huge research because they could see the economic value on it. biotech conglomerates – such as Merck-Serono, Roche, Boehringer Ingelheim and Sanofi-Aventis – as well as to a series of small and medium biotech companies, such as Biotest and Cytolon. These medium and smaller companies have a large amount of phase two and three products that might soon give a new nickname to the German pharmaceutical industry – “the Biolab of the world.” Biotest’s strategy is to be the key global specialist in clinical immunology, focusing on the so-called hyper-immunoglobuLeading in the eld of new lin, and expand its activities into other fast growing fields such cell-based medicinical products and processes. as anti-hepatitis B immunoglobulin. Its investments in R&D increased 27% from 2007 to 2008 reaching USD 64 million, Focussed on developments which especially in plasma protein and biotherapeutics. “Thanks provide superior options to treat life-threatening diseases. to our strong investment in R&D, Biotest built a promising pipeline; for instance, the company has a monoclone antibody Active Phase II Clinical Study in already in phase II presenting auspicious results,” says Gregor children with Urea Cycle Defects (UCD) shows rst promising Schulz, chairman of Biotest. According to him, such an enresults. couraging pipeline accompanied by Biotest’s recent establishment in the American market with the acquisition of Nabi Biopharmaceuticals’ biologics business unit have rendered important partnership opportunities that will soon boost Biotest businesses worldwide. Wolfgang Rüdinger, managing director of Cytonet – a fast growing German biotech company born out of a spin-off from Roche Diagnostics in 2000 – explains that only a few years ago the best chance for a German biotech company to gain access to venture capital or to partner with research and acawww.cytonet.de demic institutes was to establish itself in the USA – just as his company and Biotest did.
A Passion for Life
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Nowadays, the same is starting to happen in Germany.” As examples of this change, Mr Ründiger highlights Cytonet’s partnerships with German institutions such as the Hannover Medical School and the University of Heidelberg in the fields of liver cell based preparations used in the treatment of severe liver diseases as well as metabolic liver defects in newborns and infants. Even with such progress, there are still good reasons for a German biotech company to establish itself in the American market. Cytonet, for instance, recently concluded a strategic cooperation agreement with Vesta Therapeutics Inc. from North Carolina, which will allow Cytonet to have access to 58 different organ procurement organizations, whereas in Germany there is a monopoly of the German organ procurement organization. “To isolate liver cells from donned organs requires a bureaucratic procedure that is much more pragmatic and simpler in the USA. In America, these institutions are much more opened to work with the industry and they understand that if an organ can’t be transplanted, then its liver cells should be (used) since the desire of the donor was to help saving lives through his donated organs,” says Mr. Rüdinger. This is a clear example of how the German over-regulated system is still a long way away from perfection, but it has started to improve. As the second biggest biotech market worldwide, Germany is an attractive market for growing international biotech companies. However, such a competitive and high performance playground is not for amateurs. “No company can survive in this market without very innovative products”, says Raymond Francot, General Manager of Gilead Sciences Germany. According to him, Gilead’s molecules are the best in market clinical data thanks to the company’s close partnerships with hospitals, physicians and universities in all countries where Gilead is established. Thanks to Gilead´s unique business model and strategy to focus strongly in virology areas such as HIV and hepatitis it managed to become a leader in the HIV and hepatitis B and C treatment in the German market. Roche, once a conventional pharmaceutical company, has shifted its focus towards biotechnology, investing large sums of money in new areas alien to the original structure of the company, and being able to successfully establish itself in those new fields. By acquiring world biotech and diagnostic leaders such as Genentech, Boehringer Mannheim and Chugai Pharmaceuticals, and reinvesting large sums of its traditional blockbusters to link its vast diagnostic pipeline directly to its pharmaceutical business, Roche paved its way to become the number one biotech company worldwide. Nowhere else the synergies between the pharmaceutical and diagnostic business is more evident than at Roche PenzS23 FOCUS REPORTS
berg, in southern Germany, the world’s largest biotechnology research, development and production center in the Roche Group. Roche Penzberg is the only global location inside Roche group where research, development and production of pharmaceuticals and diagnostics system are completely integrated. This results in an intensive networking of the two divisions with a variety of synergies; what is particularly relevant in the field of Personalized Medicine. According to Hagen Pfundner, CEO of Roche Germany,
YES, biotechs can! It is difficult enough for conventional and long established pharmaceutical companies to launch new drugs into the market, but in a country known for its mechanical attention to detail, the process can be a real headache for the smaller or new arrivals less versed in the ins and outs of regulation, and this is particularly topical in the virgin world of biotech. Hence, the idea of YES, which stands for Your External Support, was developed since 1994 to provide wide range of services to make it easier for pharmaceutical companies to comply with highly complex drug-safety requirements. The firm presents itself as a one-stop-shop strategy for the development of human and veterinary products and medical devices for a national, European and international base. Even though YES provides solutions to a wide array of pharmaceutical companies, such as generics and OTC producers, its main focus is now the German booming biotech sector, so it does not come as a surprise that it has chosen to set up camp at the heart of Europe’s biggest biotech hub. The firm believes that its services are especially appealing for start-up biotech companies, which emerged from traditional research centers and, for the first time, are now introducing new products to the market. In some cases, YES’ partnerships with its clients are so close the company can become responsible for the entire development of the drugs, including market authorization process and further lifecycle management. “YES’ future is in innovative areas such as biotech and biosimilars, where we offer unmet services to a wide range of companies eager for our solutions” says Rainer Canenbley, Managing Director of YES Pharma. The power and benefits of biotechnology for the pharmaceutical industry are driving judicious investment and expertise into a sector with a great potential to deliver innovation, jobs and prosperity.
Personalized Medicine is a key element of the corporate strategy of the Roche group; and where Penzberg plays a decisive rule as an R&D and production center. Linking revolutionary diagnostic technologies such as the PCR technology with the pharmaceuticals involved in the treatments of the newly identified diseases or new variants and stages of diseases Roche opened new niches of great medical need. “Clearly, this has benefited us as diagnostics is a prerequisite to put in place any therapy, from risk assessment to a monitoring treatment. It is through this combination of diagnosis and treatment that Roche will continue to deliver better health with less side effects, less time and much more effectiveness” says Mr Pfundner. Celgene Germany is also reaping the benefits of its efforts in the German market. Thanks to its success in the hematology area, with a sales force rated as the number one in this therapeutic field in Germany, the company is also focusing in oncology and inflammation drugs, which hold a great growth potential in the German market. In the words of Michael Pehl, Celgene Germany Man-
aging Director, “The company has been broadening its scope and building up a full sales and market organization, clinical research, fi nance and accounting in order to reach the full potential of the German market. Thus, Celgene is launching three new products and it is looking forward to do much more.” Germany is clearly a Hagen Pfundner (Roche) market with great opportunities and challenges. It was thanks to its innovators and their bright ideas that it managed to revolutionize the medical sciences and the pharmaceutical industry itself. A new revolution is arising from the German labs – whether it will gain the world again or stagnate in overbureaucracy it is certainly not up for the scientists to decide.
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Written after exclusive interviews with Germany's decision makers from local and multinational companies, manufacturers, distributors, exper...