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Interview

Jerzy Macjhrzak, Department of Innovation and Industry, Ministry of Economy, Poland

23.05.2014 / Pharmaboardroom

a)DJM ZdjęcieThe department of innovation and industry under the Ministry of Economy has been preparing a new project called: “Pharmaceutical Industry Mapping.” Its leader hopes: “that the outcome of this exercise will be the identification of the weak and strong points in the polish pharmaceutical industry and the areas that should be improved by means of additional financing or by modification of existing legal regulations.” He also adds: “One of the effects of this task is the fact that now we are able to say that clinical research is very important for the future of the polish pharmaceutical industry.”

What has been the main role of the Department of Innovation and Industry in relation to the pharmaceutical industry?

The pharmaceutical industry plays an important role in our activities. By 2010 the pharmaceutical industry had achieved rapid growth, due to the buy-out of a significant part of Polish pharmaceutical companies by the major players in this field. The quick development of Polish pharmaceutical companies such as Polpharma, Bioton and Adamed and others was proof that in-house capital also saw the potential of this industry. The real dilemma for Poland was how to foster cooperation between innovative and generics pharmaceutical companies.

We believe that the pharmaceutical industry is one of the most innovative industries. One of the roles of our department is to foster innovative industries, so we not only support the pharmaceutical industry, but also other innovative industries in Poland. All of this resulted in the fact that we have created a program of industry development that was approved by the Council of Ministers on the 8 April 2014.

Another document that we have been developing is domestic smart specializations. The  pharmaceutical industry is included among these specializations.

Our current contacts within the industry allowed us to better understand the specifics of the sector and help when new documents and policies are created by our ministry. We signaled a series of problems resulting from the Reimbursement Act to the Ministry of Health. In my opinion the Reimbursement Act has resulted in the limiting of the volume of production and increasing exports, lowering the flow of supplies to the domestic market.

Of course Poland is mostly known for being a generic driven country. How did the new Reimbursement Act influence the pharmaceutical market?

Following World War II, growth in the Polish pharmaceutical industry was driven mainly by generics. In 2012, the introduction of the Reimbursement Act significantly disturbed the growth of our pharmaceutical industry. The Reimbursement Act has resulted in a significant change in the environment for the pharmaceutical industry in Poland.

Ministry of Economy and especially our department took over the function of coordinator and representative of the central administration between Ministry of Health and the pharmaceutical industry. We arranged a series of meetings with pharmaceutical industry representatives. We encouraged homogenizing their stance and have since become a platform of agreement among these parts of the pharmaceutical industry, allowing them to present their position in a single voice.

In a recent interview, you said that Poland is set to receive EUR 160 billion (USD 218 billion) as a result of the European Union’s budget for 2014-2020. How much will be invested in the pharmaceutical industry and what will be the implications?

Our expenditure structure is evolving, and this will have an important impact on the way this budget money is spent. In the previous budget perspective we had spent a large sum of money, about EUR 10 billion (USD 13.6 million), on capital expenditures for machinery and infrastructure. This time, up to 80 percent of the budget will be invested in research subsidization. We will also be subsidizing up to 51 percent the development and engineering of production and installation construction. For highly innovative research, a key area for the pharmaceutical industry, production launch subsidies may reach 100 percent. However, the funding of production launches would be financed by “returnable subsidies”, loans, credits, and so on. These subsidies designed to support R&D are not by nature focused exclusively on the pharmaceutical industry. However, the fact that the recipients of this funding include many pharmaceutical companies, assures that a steady stream of money will flow to the pharmaceutical industry. There will also be a lot of money directed towards workforce skill development. Our objective in allocating this money is to establish R&D leaders in Poland.

Of course, legal regulations also have a significant impact on the pharmaceutical industry. We are doing our best to improve the existing legislation to provide a more effective functioning of the pharmaceutical industry both in and out of Poland. The Ministry of Economy is also responsible for the deregulation of legal acts. The aim of our collaboration with the industry is to develop deregulated legal acts and to introduce them in to polish legislation.

In comparing the level of R&D investment of the main local Polish companies with that of their Western European counterparts, we see that there is still more to be done here. How would you assess the level of this investment for Polish companies? Are they enough today?

It is hard to estimate to what extent Polish companies’ R&D efforts should be extended. The point is that the costs of introducing both innovative and generic medicine onto the market are still growing, especially due to European Union regulations. We have developed a very interesting initiative/project called Pharmaceutical Industry Mapping. We hope that this mapping of the pharmaceutical industry will be completed in 2014.

This mapping consists of the identification and description of all the processes taking place in the pharmaceutical industry.  Together with the industry, we would like to describe and identify the whole process, starting from idea, to the first stages of development work, up to the placing of a given product on the market.

And within this project was created four teams. The teams deal with specific topics:

1. Basic and preclinical research

2. Clinical trials

3. Production, registration, pharmacovigilance and refund

4. Distribution, sale, marketing, export and import.

The tasks are designed to show the capabilities of enterprises and the opportunities and challenges associated with their activities. We hope that the outcome of this exercise will be the identification of the weak and strong points in the polish pharmaceutical industry and the areas that should be improved by means of additional financing or by modification of existing legal regulations. This is a very innovative process that was launched from the initiative of the polish pharmaceutical industry and we care very much that it is carried out successfully. One of the effects of this task is the fact that now we are able to say that clinical research is very important for the future of the polish pharmaceutical industry. We are not afraid to say that we can become a center on the map of Europe.

What makes Poland an attractive target for investment by foreign companies?

Poland has significant manufacturing capabilities which, along with a highly skilled and experienced workforce, allow us to specialize in the manufacture of medicine. Polish companies are leading the way among international co-operations in the pharmaceutical industry. Among multinational pharmaceutical companies that have manufacturing facilities in several countries, including Poland, the Polish plants usually perform best in terms of quality, cost-reduction, environmental impact minimization and so on.

Several years ago a change in the trend of pharmaceutical manufacturing became evident. The manufacture of pharmaceutical products began to migrate to Asian countries. However, as it turned out, the quality of these products did not always reach the European Union standards. We have since seen a reversal trend as the manufacture of these products returned to Europe.

How can you retain talent in Poland and how can Poland compete with western countries?

First of all, we are glad that we still have universities with strong faculties of pharmaceutical, chemical and related branch. Over recent years, the faculties have not been limited, so their output capability is still quite large. Another goal is to direct a significant stream of money from our new financial capabilities to innovative institutions and companies. We would like to encourage foreign companies to invest in Poland and would especially like to attract investors to big R&D centers in Poland. The main assumption of our new financial scheme is that in this case leading partner will be the industry and enterprise and not R&D institutions, as it was the case until today. We would like to direct a significant amount of money to R&D efforts. We believe Poland has considerable growth potential in terms of this industry. Pharmaceuticals is one of most rapidly growing industries because of Poland’s population, size and changing demographic structure. The nation is getting older and older. Although this is not good for other aspects of society, from the point of view of the pharmaceutical industry, this is quite promising. Also, most of the pharmaceutical industry in neighboring countries has moved away, leaving Poland as a strong point in this part of Europe.

What do you think Poland needs in order to transition from a “modest innovator” to an “innovation leader”?

When we analyze the indicators of innovativeness, we believe that our classification as a moderately innovative country is an underestimation of our actual situation. These indicators do not completely present the real situation in Poland. If the innovativeness level in Poland were really as poor as represented by these statistics, we would not have achieved such a good growth rate. This results from the structure of entrepreneurs in Poland. Keep in mind that we have nearly one million entrepreneurs, but a lot of them are one man companies—self-employed people forced to operate alone due to legal restrictions. You cannot expect that such a self-employed person would do significant innovative efforts. We are exploring how to change the existing situation and how to modify these indicators to more accurately reflect the real level of innovativeness in Poland. On top of this, we will see in the very near future the results our investment in innovation made over the period 2010/2013 come to fruition. All together, we expect that thanks to changes in legislative regulations and to the fruits of this investment, we will no longer be presented as a moderate innovator.

We deeply believe that after the pharmaceutical industry in Poland pulls through this temporary slow-down, we will see a period of rapid growth. In recent times, we have seen the formation of a number of innovative pharmaceutical companies, including biotech and implants. These new, very dynamic scientists have launched their startups, and now they are coming to the market. We have very high expectations for them.

To read more interviews and articles on Poland, and to download the latest free report on the country, click here.

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