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Squirreled away in the lowlands of North West Europe and somewhat dwarfed by the mighty neighbouring pharmaceutical powerhouses of Germany and France, one could easily be forgiven for overlooking Belgium’s zesty life science ecosystem. At first glance, the numbers certainly appear more steady than thrilling: a EUR 5.4 billion domestic drug market registering respectable, but frankly modest 2.4 percent year-on-year growth.
Closer examination, however, uncovers an altogether more inspiring and vibrant picture. According to the latest statistics from pharma.be, the national industry association for the pharma sector, Belgium’s annual biopharmaceutical exports surpassed a whopping EUR 49.8 billion in 2019. This equated to the shifting of in excess of EUR 135 million worth of product a day, a figure that places the country squarely as the third largest medicines exporter in the world!
“While many people tend to get fixated on the size of the pharma market for a population of a mere 11.4 million, Belgium’s capabilities and influence actually extend far beyond that,” observes Christos Andriopoulos, managing director for Belgium and Luxembourg at Merck KGaA. “This is a country that punches well above its weight in the sheer quality and breadth of medical research, the scale of manufacturing operations, and the depth of investment into the life science space. Moreover, it’s a place that, in some respects, is guiding the way clinical practice is evolving on a global scale,” he enthuses.
Little wonder, therefore, that the life science sector has blossomed into one of the strategic linchpins of the national economy: contributing a positive trade balance of some EUR 7.2 billion, generating over 38,500 high-value jobs in biopharma as well as a further 82,000 in indirect employment, and acting as a honeypot enticing in big-brand foreign multinationals, many of which have elected to establish significant in-country operational footprints.
“We’re talking about an already well-fledged and multi-faceted market that amply reflects the country’s grand ambition to become a magnet for innovation within Europe,” affirms Roche’s country manager, Brigitte Nolet. “What’s more, Belgium’s uncanny ability to look to the future and set policies focused around science, especially when juxtaposed alongside its world-class research and clinician base, have rendered it highly effective when it comes to competing for inward investment flows,” she adds, pointing out that it is hardly a coincidence that the likes of Lilly, BMS, Johnson & Johnson, Pfizer and GSK’s vaccines business unit have all chosen to base regional headquarters or strategic hubs there.
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Indeed, the fact that this moderately sized nation has successfully managed to cobble together a comprehensive and fully-rounded life science landscape has not only earned it the glorious epithet of ‘Europe’s Pharma Valley,’ but also radically transformed the manner in which big-brand drugmakers and medtech groups can now engage with it.
“What’s really quite special about the Belgium market is that you have the right enabling conditions, infrastructure and fundamentals in place to feel confident enough to invest across the full product life cycle – encompassing development, research, manufacturing, conditioning and export – not merely focusing on the commercialisation part of the value chain, which is so often the case in many small and middling markets,” opines Brecht Vanneste, MSD’s associate vice president and managing director for Belgium and Luxembourg.
“Ultimately this is tremendously important because it allows us to properly interact with the host environment on a much more meaningful and prosperous basis. Our Heist-op-den-Berg production facility in Flanders, employing over 800 workers, speaks to the entire ecosystem and demonstrates that drug development can be a genuine investment in a society and economy, not just an expense and burden for a healthcare system.”
Karel Van De Sompel, Pfizer’s country manager for Belgium & Luxembourg very much concurs. “Belgium’s exceedingly rich life science heritage actually stretches back a long way and has continued to mature and strengthen over the years. We are glad to have been one of the early movers in spotting this market’s underlying potential as demonstrated by the fact that, some 68 years ago, we elected to set up our first ever affiliate outside of the US over here,” he confides. “Since then, our footprint has increased dramatically across four distinct operational sites meaning that we now employ some 3,400 people locally, equating to roughly one fifth of our entire European talent pool, and generating what we calculate to be around EUR 2.6 billion in added value to the local economy.”
While Belgium today can proudly claim to host to no fewer than 32 pharmaceutical production sites, perhaps even more striking is the evermore-relevant role the country plays at the heart of the global supply networks of Big Pharma. For instance, nowadays, roughly two-thirds of Pfizer’s global supply chain passes through their logistics centre in Zaventem utilising air, land, and sea channels to deliver medicines to some 172 countries worldwide, while MSD also deploys the country as a springboard for exporting to more than 140 different territories.
A similar dynamic can also be witnessed at play within Johnson and Johnson. “Many of our supply chains are deeply embedded within Belgium, where we produce either the finished products or intermediates, which are subsequently exported,” explains Sonja Willems, managing director for the Benelux of Janssen, the group’s pharma arm. “Our international distribution sites in Courcelles and La Louvière have become fundamental in dispatching our therapies swiftly and securely to pharmacies and hospitals around the world, while our chemical production plant in Geel and pharmaceuticals development and production site in Beerse comprise critical components of our global network,” she elaborates.
Interestingly, Belgium’s biopharmaceutical companies also report a resolutely global outlook with nearly half (some 49.5 percent) of all drug exports dispatched to countries outside the European Union, notably the United States, Canada and China. What can possibly be the logic behind granting Belgium such prominence as a manufacturing platform and re-export hub?
CEO, Nipro Medical Europe
“After much deliberation, we considered Belgium the optimum fit for the placement of our European-wide headquarters and logistic hub for a variety of reasons,” recalls Serge Kemps CEO for Europe at the renowned Japanese medtech manufacturer Nipro. “First of all, you’re endowed with a stellar central location and well-established infrastructure reliably connected to the rest of the continent and beyond. Secondly, there’s an abundance of multi-lingual, scientifically educated, skilled talent and industrial know-how. Thirdly, you can draw upon the a fully fleshed-out ecosystem comprising all the key elements of the life-science value chain including top-notch hospitals, institutes, medical universities, enterprises and an practitioner community eager to collaborate. The confluence of all of these factors brings together something quite powerful.”
“While cost of labour remains stubbornly high in Belgium, there are a great many other assets that off-set this whether it’s the geographical location at the heart of Europe, the strong industrial tradition and legacy, the proclivity towards open innovation, the proximity to EU policymaking and so on… and taken together they all make for a pretty compelling business case,” reasons Karel Van De Sompel.
Certainly there has been little let up in willingness to invest in big-ticket infrastructural projects on the part of multinational pharma and healthcare groups. Pfizer and Novartis have both invested over EUR 400 million and EUR 100 million respectively in upgrading their Flanders production sites in Puurs over the past five years, while home grown champion, UBC, recently unveiled their intention to spend some EUR 300 million on a brand new state-of-the-art multi-product biological manufacturing facility in Braine l’Alleud in Wallonia.
The secret to Belgium’s ability to retain a competitive edge in production and export has, of course, rested upon its eagerness to evolve by scaling the manufacturing value chain and engaging in evermore sophisticated and niche forms of fabrication. Novartis’ latest investments, for example, have centred upon visco-elastics and the creation of a world-beating world-leading filling line for biologics, while Pfizer’s efforts have been directed towards high-tech aseptic manufacturing systems.
“As one of the more expensive countries within Europe for labour, manufacturing only makes sense if you can demonstrate significant added value,” notes Vincent Stephenne, managing director of local CDMO, BePharBel Manufacturing, pointing out that Belgium has managed to build something of a reputation as an expert in specific areas such as sterile manufacturing owing to the presence of several large-scale aseptic plants.
“Even for a outfit of our limited size, having a very clear value addition and point of differentiation is an absolute prerequisite for survival. In our case, we have been concentrating on developing new galenic forms for well-known molecules. For instance, we have patented a novel multi-layer micro-particle controlled-release (MMCR) system enabling us to convert a well-established API from tablets to syrup, with the benefit of facilitating intake for elderly people and children and with the possibility of achieving controlled release whether delayed or sustained,” he explains.
Perhaps equally impressive as the enduringly robust manufacturing base, has been the nation’s remarkable propensity towards life science innovation. “If you measure an industry’s stature by its R&D investments, then Belgium’s biopharmaceutical industry is honestly best-in-class,” muses Bristol-Myers Squibb’s general manager for the Benelux, Veronique Walsh. “While Belgium represents a mere 2.2 percent of the EU’s overall population, it accounts for a full 12.5 percent of all pharmaceutical investments made across the 27-member block. Moreover, among all EU member states, the country ranks first for the volume of pharma R&D investment per inhabitant!” Indeed, coming in at a grand total of EUR 3.84 billion for 2019, drugmakers in Belgium are spending almost EUR 10 million a day just on R&D alone.
Many think this is the logical consequence of having a highly conducive enabling environment. “In general, cutting-edge life science innovation around the world tends to derive from three primary sources – namely Big Pharma, entrepreneurial start-ups, and academia – and Belgium today finds itself blessed in exhibiting a strong presence of all three ingredients,” explains Dirk Reyn president, of the cluster organisation, flanders.bio.
He points to the fact that there exist not only a number of top-tier research universities like KU Leuven, which regularly makes the top ten of worldwide rankings, but also thriving biotech scenes in the university cities of Ghent, Leuven, Louvain-la-Neuve and Liège, each of which displays its own unique characteristics. “Flanders appears to be very well positioned in the field of small molecule therapeutics, mRNA, nanobodies and nanotechnology in health, while Wallonia, by contrast, is generally strongest in the areas of cell therapies and vaccines,” Reyn opines.
On top of that, internationally re-nowned specialist knowledge centres around key disciplines also play a supporting part: especially the Vlaams Instituut voor Biotechnologie (VIB), a life sciences research institute in Flanders, and the Interuniversity Microelectronics Centre (Imec), a world-leading hub in nano-electronics and digital health technologies. “The brains, the framework and infrastructure are all here,” he proudly concludes.
Most of the typical tools to finance spin-offs along their growth paths are also evident. “We are actually endowed with quite a professional investment lands-cape in Belgium with many local venture capital players available both in seed and early-stage funds. Moreover, Belgium’s public stock market stands out as one of the most biotech savvy in Europe. Many Belgian biotechs went public pretty early on in their company life and were able to raise capital despite not having clinical or commercialized products. Interestingly, the proportion of retail money that has a stake in biotech is noticeably higher than any other country in Europe,” observes Frank Swaelens, general manager for Belgium and Luxembourg at IQVIA, though he concedes that the longstanding problem of “low liquidity in the public markets remains an issue.”
Certainly Belgium does seem to have witnessed a steady stream of biotech success stories in recent years – small molecule developer Galapagos, immunology outfit Argenx, women’s health player Mithra, nanobodies specialist Ablynx and immunotherapy pioneer iTeos Therapeutics to name but a few – that have succeeded in generating attractive investor returns and navigating game-changing products to market.
Moreover certain market insiders believe Belgium’s biotech arena to be relatively well future-proofed at a juncture of profound disruption in the global life science industry. “In the past, the industry might have reverted to the mind-set that it ‘owns’ innovation, but looking forward we can detect a clear tendency towards open innovation, which means industry proactively seeking collaborations with academic institutions and research centres to accelerate the tempo of innovation. It strikes me that Belgium with its rich tapestry of different innovation-driven stakeholders and existing spirit of joined-up action is already well equipped to embrace the evolving nature of the innovation that is surely on its way,” muses Pfizer’s Karel Van De Sompel.
“As a whole, the Belgian biotech arena is rather forward-looking as can be seen from the proliferation of local healthtech start-ups experimenting with machine learning and AI-based approaches,” observes IQVIA’s Frank Swaelens. “The fact that many of these up and coming actors are not just seeking to develop a novel drug, but also shape a whole ecosystem surrounding it bodes well for their future relevance and longevity,” he thinks.
All to Play For In Women’s Health
“Belgium might be a relatively minor market in terms of size, but nonetheless it’s packed with a great deal of scientific promise: with a multitude of companies investing in elite-end R&D activities and a wealth of internationally recognized Key Opinion Leaders (KOLs) in niche domains, especially in fertility. For instance, the Intra-cytoplasmatic Sperm Injection (ICSI) technique was invented here in Belgium and subsequently spread all over the world as the benchmark and new standard to be followed,” notes Isabelle De Walsche managing director for Benelux at Gedeon Richter.
The Hungarian specialty drugmaker’s strategy for the Benelux region has, thus far, been to test the water with its highly acclaimed women’s portfolio. “We started very limited with our first-in-class innovative product ESMYA® for myoma treatment and, bit by bit, have managed to assemble quite a large contraception portfolio featuring also products in menopause and infections,” details De Walsche.
Navigating the contraception market takes some ingenuity, however, because it is not a regular reimbursement area. “Though every contraception is reimbursed under the age of 21 in Belgium, all other women are used to paying for it out of pocket,” she explains.
In Belgium’s highly multicultural context, getting the message out can also, at times, prove more than a little tricky. “Unfortunately, we still notice a fair amount of stigmas and taboos around topics like menopause or myomas, where certain categories of patients are reticent about talking. It therefore really falls to industry actors like us to set about raising awareness, encouraging the patients to share their experiences, and inform them about the existing solutions and cures,” she acknowledges.
Meanwhile the competitive landscape in the women’s health segment has been undergoing profound transformation. “Many of the former heavyweight players have changed focus and moved on to alternative therapeutic areas. Some actors remain pretty formidable in the fertility niche, notably Ferring and Merck; and then there are some strong local outfits in the contraception space such as Mithra and Ceres, which keeps us on our toes but means there is everything to play for,” reflects De Walsche.
An example of one such actor is NephroFlow a health-tech start-up from Bruges that had been developing a process-oriented software platform to completely digitalise dialysis, and which was recently snapped up by Nipro. “Our calculation is that dialysis suppliers in the future will be selected based on optimisation and automation of the procedure through smart devices. NephroFlow’s offering is very much in keeping with this paradigm and emblematic of the sorts of the next-generation innovations you encounter in the zippy Belgian marketplace. Conscious of the potential synergies between our two companies we presented this as an acquisition target to our global management board who, I’m very happy to say, followed our recommendation and the deal was finalised at the end of last year,” enthusiastically recounts Serge Kemps.
Of course, none of these developments have gone unnoticed by Big Pharma, which have been quick to capitalise upon these assets and secure a slice of the action themselves. Bristol-Myers Squibb, for example, decided Belgium would make an excellent venue for establishing one of its global R&D centres. “Every day, in Braine l’Alleud, more than 180 colleagues are working tirelessly in R&D on biostatistics, clinical supplies operations, the global roll-out of clinical trials and on the development of new therapies,” reveals Walsh.
Johnson and Johnson meanwhile has chosen Ant-werp as a base for a Phase I research institute and Europe’s only JLABS incubator, a global scheme in which selected promising start-ups can gain access to certain resources of Janssen to assist with their development. “This is mainly focused on transitioning biotech start-ups into small companies, which is often the point in the cycle where a start-up will fail. We help them to overcome this challenge and develop their business,” explains Sonja Willems noting that it is testament to the sustained dynamism of the Belgian biotech scene that Flanders was selected for the European chapter of this worldwide scheme.
Medtech companies have also been following suit with Becton, Dickinson and Company (BD) opting to set up an “experience centre” in Aalst designed to demonstrate innovative BD technologies across the care continuum and provide a collaborative environment for advancing solutions to contemporary healthcare challenges. “We essentially deploy virtual reality and augmented reality to showcase the life of a patient, analyse the challenges at every step, and consider what novel solutions can be put forward,” says the firm’s general manager for the drenoBenelux, Alexander Alonso.
As befitting an environment in which R&D and innovation are so well engrained, Belgium has been presenting itself as the clinical trials destination par excellence. This strategy appears to be working with the American Chamber of Commerce estimating that the country now boasts around 500 trials running at any one time and more than 170,000 Belgians participating in Phase II and III studies, rendering it the second most prolific clinical trials market in the whole of Europe in terms of volume of trials per capita.
For Philippe de Pougnadoresse, country president of Novartis, “Belgium is without a doubt a paragon when it comes to clinical trials owing to its high-quality research centres, dense medical infrastructure, real-life experience of investigators, and rapid start-up timelines” which also helps to explain the company’s apparently disproportionate footprint with a mega 150 ongoing trials serving some 2,500 patients.
“Despite a worldwide tendency towards centralizing trials in larger markets as a method of reducing costs, Belgium possesses an infrastructure and academic level that is so far advanced than many of its peers that it
manages to buck the trend and remains a key focus for the industry,” acknowledges Anne-Laure Dreno, AstraZeneca country president for Belgium and Luxembourg. In fact, her company is so confident in the quality of the trials being conducted that they don’t just run their own stu-dies, but also support Externally Sponsored Scientific Research (ESR) locally.
For some companies it is the condensed approval time lines that are most attractive with Belgium’s authorities priding themselves on their track record of approving first in man human trials within 15 to 20 days through a streamlined and expedited process.
“Essentially, the government has gone out of its way to create an enabling regulatory environment for early and late-stage clinical trials, meaning we have quick approval decisions while maintaining compliance with all the necessary procedures. Clearly this is a massive selling point for innovative drug developers when it means you can bring original concepts to humans in a matter of weeks compared to perhaps several months in many other markets,” reasons MSD’s Brecht Vanneste. As a direct result, “the vast majority of MSD’s early discovery that happens across the globe is routed through Belgium with about 90 percent of all of the companies ‘First in Human’ studies carried out on Belgian soil,” he reveals.
For others, the appeal is as much about the ability to work with world-renowned investigators and clinics. “Belgium possesses a really exceptional hospital network with internationally recognized researchers. For example, the University of Leuven is one of the most important centres in Europe for eye care and the University of Ghent has highly acclaimed capabilities in neuroscience, which is something you really have to factor in, especially if you are a specialty player focused on specific therapeutic areas,” discloses Javier Aracil, country manager of Allergan.
BeNeLuxA: Bolstering the Payer’s Position
Building upon the region’s strong tradition of solidarity, the Low Countries bandied together with Austria back in 2015 to act in concert in ensuring sustainable access to innovative therapies at an affordable cost for their patients.
“There was a growing appreciation that timely access of patients to medicines was being hampered by the sheer variety in national policies on pricing, reimbursement and the use of pharmaceuticals. Spiralling demand, relentless cost pressure and the influx of radically novel therapeutic technologies were combining to exert immense stress and strain on the capabilities and bargaining power of individual authorities. It was thus considered desirable to join forces with a view to better counteracting and managing these trends,” recalls Francis Arickx, Belgium country coordinator for the initiative known as ‘BeNeLuxA.’
Subsequently expanded to include Ireland, BeNeLuxA today comprises collaboration in four core areas: namely health technology assessment, information exchange, joint negotiations with the pharma industry, and horizon scanning. “The goal is very much to increase the efficiency of assessment and to reinforce pricing and reimbursement processes to improve the payer’s position in the market. Working together in this way not only makes it easier to negotiate fair medicine prices, but also to demand far greater transparency on the cost build-up of pharmaceutical products,” explains Health Minister Maggie De Block.
Interestingly though, at the very same time as trying to align regulatory frameworks, Belgium’s drug regulator, the Federal Agency for Medicines & Health Products (FAMHP), has been keen to cultivate points of differentiation compared to other national competent authorities.
“Given factors such as the speed of knowledge acquisition within our agency and the volume of clinical trials applications received, we foresee great opportunity to lead the way as a regulatory trailblazer in niches such as vaccines for human use and early phase clinical development,” asserts FAMHP CEO, Xavier De Cuyper. “It is precisely by playing to our strengths that we contribute the most.”
Those endeavouring to rethink and optimise the conventional clinical trials process will also find Belgium highly accommodating. “AstraZeneca has been trying to leverage new technologies such as AI to accelerate studies and overcome some of the challenges we face in the fragmentation of data. This includes working in partnership with new technology partners and hospitals to leverage their data and better understand the patient journey. What’s pretty unique about Belgium is that we’re able to be at the forefront of all these new era conversations, so that is definitely another reason to be conducting trials here,” affirms AstraZeneca’s Anne-Laure Dreno.
Furthermore, when attempting to introduce original therapies to the Belgian market it is clearly advantageous to conduct local clinical trials and collaborate with local academics. “Collaboration of this kind not only allows them to build experience with the products, but during the reimbursement procedures in Belgium, we can nominate an expert that the reimbursement commission can ask questions to. For a local key opinion leader to provide their expertise adds credibility to the process and thus can be a driver of launch success,” reminds Axel De Muyt, general manager & vice president at Danish specialty drug developer, Novo Nordisk.
Against such a promising backdrop, what then to make of Belgium’s domestic market potential? According to the most recent OECD stats, healthcare coverage stands at close to universal in Belgium with mandatory insurance implemented through five private, not-for-profit national associations of sickness funds, while healthcare spending makes up some 10.4 percent of GDP, an altogether higher share than the EU average of 9.8 percent. Hospital inpatient care accounts for one third of all healthcare spending in the country, while roughly one-sixth – some EUR 577 per capita – comprises pharmaceuticals and medical devices dispensed outside hospitals. Enjoying steady but unspectacular growth of 2.4 percent, the pharma market stands out for its disproportionately high penetration of originator therapies (83.4 percent by value), while the retail pharma market was valued at around EUR 3.16 billion at the end of 2019.
For the international investor community and the pharma and medtech firms already operational in the country, one of the most striking elements about the Belgium market has been the comprehensive reform agenda since the enaction in 2015 of the ‘Pact for the Future,’ a historic agreement between state and industry.
“The Pact embodied a watershed moment for our country when all stakeholders accepted that that significant reform to the financing mechanism of public health and to the structure of healthcare provision would be necessary if Belgium were to keep its generous universal healthcare system intact,” recounts Former Health Minister Maggie de Block.
“Together we agreed to take some pretty firm measures in the off-patent segment to keep the medicines budget under control through a combination of the patent cliff, ceiling prices and a volume cliff. In doing so, were able to save some EUR 1.1 billion, which could then be channelled towards ensuring swift access for state-of-the-art therapies in areas such as immunotherapy, paediatric indications, and Hepatitis C. We simultaneously developed a more predictable reimbursement pathway for extensions of indication with a transparent decision tree, reduced sales taxes by somewhere in the region of 13 percent, and jointly agreed upon a yearly average budget growth of 0.5 percent to deliver stability and certainty,” she explains.
“I was the president of the national pharma association at that time and was heavily involved in the decision making,” recalls Janssen’s Sonja Willems. “The goal was very much to create a balanced and fair ecosystem that would be sustainable over the long run and in which drugmakers would be able to introduce their latest innovations into the marketplace, while agreeing not to divest from basic medicines and therapies. Looking back, I would say that probably around 85 percent of what we agreed has been implemented, which is quite an achievement given the number of areas it touched upon from co-payments to structural reform of the health provision apparatus to codifying the industry growth path.”
Structurally, one of the most profound changes has been the regrouping of Belgium’s approximately 100 hospitals nationwide into 25 hospital networks. “The logic is that, for complex and niche areas where a hospital might ordinarily perform a specific intervention only once or twice a year, levels of quality and efficiency would be far superior if that procedure were instead carried out at a consolidated, specialized centre that performs it 50 or 100 times during the equivalent time period,” explains IQVIA’s Frank Swaelens. In this way, it is no longer deemed necessary for each and every hospital to possess its very own maternity ward, with a single dedicated and unified structure per network considered preferable.
CAF-DCF: Bolstering the Supply Chain for Blood Plasma Products
Created initially as an operational unit of the Belgian Red Cross in the 1970s, CAF-DCF was integrated into the LFB Group in 2016 where it can now draw upon the French state owned giant’s profound expertise in plasma. Still a somewhat obscure brand, the company nonetheless plays a vital role in the Belgian healthcare ecosystem, offering patients therapeutic solutions in the areas of immunology, and haemostasis (to manage rare bleeding disorders) while simultaneously supplying intensive care units with the means to treat those in critical situations including severe bleeding.
The company’s managing director, Romuald Gaudefroy has been tasked with fashioning a brand new business model in the wake of a new national tender framework for the plasma-derived products market. “The implementation of the national tender has been a complete game-changer for CAF-DCF and its historic function as a manufacturer,” he confides. “We have had to thoroughly reorganize the company from its previous incarnation as a traditional plasma fractionator to distributing finished plasma derived medicinal products manufactured by both LFB and our partner Sanquin in the Netherlands. It’s been critical to be more effective than ever before in marketing CAF-DCF’s competitiveness, in addition to strengthening our market access capabilities and reimbursement activities.”
The company is now focusing upon forging a longstanding partnership with the local health authorities. “The COVID-19 pandemic has illustrated how health systems must be rethought to maintain supply chain integrity and safeguard uninterrupted flow of life saving products. Patients expect industry and state to guarantee their supply of essentials such as plasma-derived products, but this can only be fulfilled when we are part of a lasting relationship of mutual trust so that is exactly what we are setting out to put in place,” confidently declares Gaudefroy.
“This consolidation of the Belgian hospital apparatus has far reaching implications and is certainly sparking a rearrangement of the market dynamics within the medtech sector,” opines Carl Laurent, Siemens Healthineers’ managing director for Belgium and Luxembourg. “Labs will need to learn how to operate in accordance with a ‘hub and spoke’ model for the first time, while the medtech companies are finding themselves having to completely rethink their stakeholder engagement and market access strategies. Stakeholder mapping will become significantly more complex and involve new kinds of decision makers, in contrast to the old method of just targeting the CEO and lab director of an individual hospital.”
Significant inefficiencies nonetheless remain, not least as a result of complexities created by the federal and regional dynamics of the country. “Such a structure makes it very difficult to track budgetary spending across the various regions of Belgium,” says Luc Van Gorp, president of the Christian Mutuality Health Insurance Fund, the largest mutuality group in Belgium with over 4.5 million members. “For example, a wheelchair that is given to a patient in Flanders could be accounted for within our healthcare system twice if the patient were to then move to Brussels. Patients are not just stationary checkmarks; they are people and they are mobile. This creates a major challenge for the government and mutualities to keep an accurate picture of reimbursement and resource allocation and therefore we must continue to seek out ways to rationalise our healthcare system and act smarter,” he elaborates.
“The Pact has undoubtedly been a decisive step forward in laying the groundwork for a sustainable and prosperous life science market in Belgium and in recent years has furnished industry actors with the predictability and clarity that our HQs require so as to be able to continue investing in this country. Our hope is very much, however, that the Pact will be seen as the start of an ongoing and continuing reform and collaboration process, not its final chapter,” emphasises Merck’s Christos Andriopoulos.
When it comes to introducing innovative therapies into the Belgian marketplace, the consensus opinion of most originator drug developers is that market access policies are headed in a positive direction and that demonstrable progress is being undertaken.
“There are basically two parameters to assess ease of market access. The first is how long it takes for an innovative product to reach patients. Belgium used to be at the very low end of the spectrum, taking much longer than the European average. However, in the last five years, by virtue of reforms outlined in the ‘Pact,’ we are now broadly in line with EU norms, which is commendable, albeit still suboptimal,” argues Merck KGaA’s Christos Andriopoulos, whose company now expects to be launching at least one new product or indication each year on the local market for the foreseeable future.
“The second indicator is to measure the proportion of innovation introduced in Belgium against that which has been launched across the rest of Europe,” he continues. “Although some 70 percent of the innovation launched in Europe has indeed made it through to the Belgian marketplace, this still compares unfavourably to countries like Germany where figures are closer to the 100 percent mark. These facts demonstrate that Belgium is on a positive trajectory, but that this is not a time for complacency and there is still much work to be done,” elucidates Andriopoulos.
One area where there seems to have been particular improvement is in speedy the adoption of next generation cancer therapies. “Within the last five years we’ve witnessed some fascinating local health policies, such as the cancer immunotherapy framework, ensuring patients could access these therapies by accelerating approval timelines and awarding reimbursement for breakthrough solutions, especially in areas with a significant unmet medical need,” reports Roche’s Brigitte Nolet. “This commitment to immediate access for patients and predictability for the industry is truly a unique stance we’ve not really seen anywhere else on the continent,” she exclaims.
Indeed research from the University of Ghent suggests that this fast-tracking of immuno-oncology drugs will result in a gain of more than 9,600 quality-adjusted life years within a time period of only 60 months whereas the usual longer procedure would have gained only 5,900. Meanwhile immunotherapy trailblazers such as Bristol-Myers Squibb have been left pleasantly surprised by the turnaround in fortunes. “Bringing our first two I-O molecules OPDIVO® and YERVOY® constitutes a mammoth achievement. An agreement signed with the Belgian authorities secured the reimbursement of all indications of OPDIVO® immediately after the European Commission’s approval. This has made a huge difference to patients’ lives and is the clearest example yet of Belgium’s growing strengths in delivering access to innovation,” applauds Veronique Walsh.
Companies engaging in more frugal or incremental forms of innovation, however, have tended to be far less impressed, with many lamenting that their style of innovation remain undervalued and unappreciated. “We feel the Belgian health authorities are dealing with market access under silo thinking; looking at medicines on a one-to-one basis rather than a globalist approach that takes into account the social context or savings potential. They need to go beyond just considering how innovative a molecule and start to also consider how a molecule can be given new life or the impact of a new delivery mechanism,” ventures Fréderic Covemaeker, general manager for Belgium and Luxembourg at Nordic Pharma.
His company’s Nordimet Auto-injector is perhaps a case in point. “Our first button-free, once-weekly pen methotrexate device offers patients a new means of administering treatment that ensures ease, comfort, and dosage confidence; greatly improving the quality of their life and disease management. However, at this stage, the auto injector pen is not yet properly valued by Belgian authorities because they focus too rigidly on the molecule of products. In rheumatology, there is clearly a direct shift to the higher-priced biologicals rather than looking at all the options of the cornerstone of the first treatment, which can create savings,” he complains.
In Praise of Parallel Exports
Long maligned for upsetting the balance of a nation’s pharma market, Belgium has been demonstrating that parallel exports, when managed astutely, can actually deliver widespread positive outcomes.
For a start, they can be an effective mechanism in mitigating the sorts of chronic shortages and stock-outs that have become commonplace within many North West European markets of late. “The brute fact is that nowadays, there are a substantial number of drugs unavailable nationally, but readily available in other EU member states. Through parallel imports, we are able to safely repackage and make these medicines available to Belgian patients,” affirms Filip Van de Vliet, CEO of Alter Pharma Group, which specialises in this category of medicines.
Indeed, over a recent eight-month period Alter Pharma proved able to import roughly 814,000 months of missing treatments. “This also gives convenience to pharmacists who are less frequently required to identify and source an alternative to an unavailable product, which they often don’t manage to find… Thanks to parallel imports, we enable the pharmacists to focus on their key function, advising patients, and patients can continue the treatment they are familiar with,” elaborates Gérard Lefèbvre the company’s pharmacy sales and operations director.
Tanguy Schmitz, president of the Belgian Association of Parallel Importers and Exporters (BAPIE) believes that there are many misconceptions about this segment of the pharma market, and he is keen to dispel them. “Almost 60 percent of parallel import sales originate in other high-income countries. The UK, Romania, and Germany are the main sources to Belgium this year, so it’s manifestly untrue that parallel import is predominantly a flow going from low-income to high-income countries, he argues.
Rebutting criticism from originator drug developers, he also vigorously asserts that there is no evidence that parallel trade has a negative impact on R&D in Europe. “The costs of all parallel imported products are paid to the manufacturer at the price requested in the source market pricing principles, allowing for the recouping of development costs, hence every market pays for innovation,” he explains.
Meanwhile Schmitz is keen to highlight that, thanks to parallel importers, some 814,000 Belgian patients – that is over 100,000 per month – were able to be supplied in accordance to their doctor’s prescriptions during the first half of last year. “Adherence to treatments could be maintained towards the prescribed medication, thus reinforcing treatment compliance. In short, our industry segments offers a crucial ‘second chance’ to provide the missing product!” he enthuses.
BD Group’s Alexander Alonso makes a similar point when he queries the lack of appreciation of the value of some of his company’s healthcare worker safety solutions. “We are finding that prevailing legislation blocks investment into innovation in this sphere. For example, financially the law does not incentivise the prevention of needlestick injuries for healthcare practitioners in Belgium. Within the current financial framework, this is simply paid for by insurance and there is no reward to be gained by investing in technologies that can prevent these injuries,” he bemoans.
For Alonso, the manner in which innovation is assessed needs to be reconsidered to take into account more holistic approaches to healthcare. “At BD group, we are now building integrated value propositions which means that a single medical technology is no longer isolated but instead part of an all-encompassing solution. That is what differentiates us. A syringe is never sold as a syringe alone, but rather as part of a medication delivery and management value proposition. We position ourselves to support healthcare along the total continuum of care with innovative value-based solutions. In our work with both pharmaceutical companies and hospitals, we are increasingly looking at how we can support care before a patient enters the hospital as well as when they leave it,” he explains.
Where Belgium’s blueprint for promoting innovative medicines runs into real difficulties, however, is in its handling of the generics and biosimilars segments. Uptake of generics remains worryingly anaemic with penetration in hospital and community pharmacy settings registering a meagre 18 percent and 38 percent respectively, in stark contrast to European averages of 55 percent and neighbouring markets such as Germany and the Netherlands where penetration now pushes above 70 percent.
“Unfortunately generic companies in Belgium are instrumentalised for the purpose of lowering costs and nothing more. Practically nowhere else in the EU are genericized drugs so systematically subjected to high claw-backs and other taxes that, taken together, nowadays constitute more than 11 percent of overall turnover. Since we are seen purely as a lever of triggering competition rather than as a permanent driver of cost efficiency in healthcare, this translates to the system that is designed in favour of the originators by allowing them to claim majority control of the market. Such a situation, over the long run, is likely to be highly detrimental to the cost efficiency of the entire system,” cautions Joris Van Assche, managing director of Medaxes, the association for off-patent medicines.
He frets that, unless measures are taken to counteract this unhappy state of affairs, his members will “probably have little choice but to pull some 250 generics from the market simply due to their lack of profitability.” Teva’s dramatic decision in 2019 to shut down its Belgian generics business completely, before ultimately opting instead to pass its licence over to a newly created entity, Arega Pharma, has also sent shockwaves through the marketplace and is being interpreted by some as an indicator of future troubles to come.
“The decision to hive off the generic business was categorically not due to poor results or flagging performance,” explains Eric Deschepper, Teva’s managing director, but rather a reflection of a distorted market place in which originator drugmakers can receive undue protection for their off-patent portfolios. In Belgium, innovators can still ask for a supplement of up to 25 percent of the price up to EUR five per pack of medication thus charging more money for the same product as a generic. With such a pricing structure, the margins are high, and they can continue promoting and maintaining brand loyalty, which in turn compels generics players to invest more in sales forces, despite generating some of the lowest returns in Europe.
Securing API Manufacturing and Supply in Europe Post-COVID
The COVID-19 crisis has shone a light on the importance of robust manufacturing and supply chains for active pharmaceutical ingredients (APIs) in Europe to ensure that essential medicines can continue to be delivered to patients in times of border closures and lockdowns.
For Vincent Stephenne, managing director of local CDMO BePharBel Manufacturing, “This crisis has shown that the global pharma supply chain is not robust enough. We are all too dependent on Asia for many materials, and it is important that we change this.” Indeed, a full 80 percent of APIs globally are manufactured in Asia.
Stephenne continues, “There are many SMEs active in manufacturing drugs in Europe, and this crisis is an opportunity to rethink the European model. Could Europe decide to give more financial support to these SMEs? There could be a simplification of the quality and regulatory roles to keep a strong and active network of manufacturing sites in Europe… It is key for the future of the European pharma industry to establish a safer supply of APIs.”
Christoph Stoller, president of Medicines for Europe, is keen to note his industry’s rapid and comprehensive response to ensure supply chains remained intact but calls for Europe-wide collaboration to mitigate future risks. “We as an industry had contingency plans ready and went immediately into crisis mode to ensure that supply was maintained,” he asserts
“However, governments also need to be well prepared for pandemics. At the beginning of the crisis, there was a somewhat chaotic rush for ICU drugs and PPE exacerbated by border closures… Now the question is, looking forward, how are we going to ensure these shortages do not happen again and who should pay for it? There needs to be a sustainable system to ensure the reliable supply of medicines in Europe. One way to do this is to engage in a dialogue with national governments to secure necessary stock in every area, including hospitals, of key drugs… Secondly, the ECDC and EMA need to obtain better epidemiological data to ascertain the need for essential drugs in different areas.”
Stoller concludes, “Finally, we need to change the way that our systems work. Certain European countries cannot continue to maintain an unsustainable preference for the lowest-cost generic option… This will also allow us to secure European manufacturing… there is a long-term trade-off between affordability and security of supply and we need to have this discussion now with the Commission, Member States, Regulators, and Payers.”
“When comparing the generic businesses across different markets in Europe, the Belgian business required greater investments to support continuous promotion to healthcare providers and pharmacists while overhead costs were comparatively higher owing to the paucity of the market. The team needed to be more or less the same size as Germany, which was registering ten times the sales of Belgium, so in the end this operational model was frankly deemed not to be worth the effort,” confides Deschepper.
“The Belgian generics segment has degenerated into a rather unhealthy business for several reasons,” argues Teun Grooters, co-founder of Arega. “Firstly, just from the market structure, we can see that the first company enjoys 50 percent market share, the second takes 28, and we are third with 12. With the first two players holding such disproportionate sway, it is difficult to compete for the rest of the players, Arega included. Secondly, Belgium has a government that is fixated on innovation without properly understanding that loss of patent is essential for driving urgency to deliver new molecules, and for generating headroom that can subsequently be ploughed back into financing R&D.”
What then could be done to remedy such a predicament? “First, there needs to be more consistency and transparency about how prices are set in the innovative segment especially now that there is a tendency towards favouring secretly managed entry agreements, which include new immunotherapy products. Secondly, off-patent protection needs to be reconsidered,” advocates Grooters.
Akin to generics, the uptake of biosimilars has also been very sluggish with three recent instances where the manufacturers of biosimilar molecules have decided not to introduce their product to the market. “Of course, many factors go into consideration when deciding upon which market to launch products, but the fact that Belgium is not even being considered in these instances constitutes a major red flag about the local operating conditions,” reflects Van Assche.
“Looking at the European context, we see that in many markets biosimilars enjoy adequate traction, making Belgium a bit of an exception within Western Europe. Honestly speaking, the Belgian uptake today is way too low. For Belgium to be a appealing market for this category of therapies, a predictable and sustainable environment is absolutely imperative, otherwise patients, drugmakers and healthcare system will lose out alike,” bluntly remarks Vincent Verschraegen, country manager at Mylan.
“From a regulatory point of view, we should definitely be able to launch faster. The timelines that are applicable to get biosimilars into the marketplace are lengthy and simply must be shortened. Furthermore, there is no need to repeat the HTA assessment as this has already been done for the reference medicine. Just as importantly, as biosimilars increase accessibility, they should be allowed to start the (shortened) pricing and reimbursement applications as soon as positive advice has been granted,” he proposes.
Reconsidering Belgium’s Approach to Countering Diabetes
With prevalence of diabetes now reaching epidemic proportions in Belgium and threatening to get out of control, some in the pharma industry are calling for the country to rethink its approach to NCDs. According to Belgium’s national public health institute, Sciensano, there are currently an estimated one million patients with diabetes in Belgium representing close to ten percent of the population. In the over 65 demographics, this number rises to an astonishing 25 percent!
“When you crunch the numbers, you discover that only six percent of current funding for diabetes goes towards drug costs, with most of it instead linked to management of complications. It’s therefore clear that, if we want to address this issue properly, far greater emphasis is going to have to be placed upon stopping the progression of the disease at source through improved prevention, awareness raising, best-in-class therapies and better treatment compliance,” reflects Novo Nordisk’s general manager and VP, Axel De Muyt.
He believes that a good place to start would be to invest heavily in education and prevention campaigns around obesity, a condition closely related to diabetes. “Right now over two million Belgians are obese so there is a need to urgently change behaviours and make people more aware about obesity and the multitude of factors that drive it: lifestyle, genetic, environmental and so on.”
Meanwhile Novo Nordisk has been gearing up to introduce digitally connected injector pens aimed a enabling patients to better control their sugar levels and track their insulin injections every day. “The benefits are abundantly clear for both patient and doctor. By deploying digitally connected pens in combination with a continuous glucose monitoring system, the physician will gain a far better insight into the patient’s glucose levels as well as how and when they administer their treatment. This should allow for significantly improved control of the glucose levels of diabetes patients,” declares De Muyt.
The big question mark now is what follows on from the end of the ‘Pact’ and whether Belgium can further build upon a life science industry that had been showing so much promise and potential. This already rather delicate situation has been compounded by the country’s messy politics following an inconclusive election in which the Dutch-speaking north gravitated to the political right, while the French-speaking south lurched leftwards, thus depriving Belgium of any kind of workable ruling majority. While a new emergency administration governing by royal decree and spearheaded by caretaker prime minister, Sophie Wilmés has been installed on a temporary basis to deal with managing the impact of the Coronavirus pandemic, it is clear that tough and highly-contested decisions like drawing up a strategies to remedy budget deficits in public health and a flagging pension system, will have to be kicked into the long grass.
“Right now, we are in a somewhat precarious situation in which Belgium does not possess a stable government, but the importance of future stability and predictability within our environment is imperative in maintaining the advantage we have in Belgium. The underlying strength of the 2015 Pact of the Future was that it brought these values to all stakeholders in the country. As we move ahead, what we must consider is how can we prolong this special spirit of partnership between industry and state and further the dialogue as a new government forms,” proclaims Roche’s Brigitte Nolet.
“We must continue to forge ahead with opportunities to work with our partners in reaching a fresh agreement that not only safeguards previously agreed areas, but equally addresses as yet untouched and outstanding domains such as advanced therapy medicinal products (ATMPs). The medical science continues to evolve and it’s tremendously important we keep pace if we are to safeguard our competitive advantage as a nation,” insists GSK’s Sabena Solomon.
Perhaps most encouraging of all is there does appear to be a strong sense of solidarity from all sides to ensure that this happens. “Personally I’m not sure that the initial Pact of the Future was entirely successful. My feeling is the generic and innovative sectors ended up far too much pitted against one another and I’m still waiting to see the proof of the benefits promised to innovative pharma,” candidly admits Teva’s Eric Deschepper. “Nonetheless, it was undoubtedly beneficial to know beforehand what the rules of the game were, such as potential clawbacks resulting from exceeding the budget, so this is an endeavour we really must persevere with. The show must go on,” he declares.
Mylan’s Vincent Verschraegen reinforces that message. “The purpose of the initial pact was to offer predictability and transparency across the market which are priorities that should definitely remain on the table and which I believe everyone is keen to uphold,” he affirms. “As a new government eventually materialises, we’re going to need to critically evaluate and assess what has been accomplished so that we can further build on and fine tune the concept, but what each and every stakeholder seems to be united upon is that we want as much transparency and predictability as possible.”
Consumer Healthcare: Doubling Down on Digital
The consumer healthcare sector has been transformed by digital tools in recent years; a trend that seems set to continue against the backdrop of the COVID-19 pandemic.
As IQVIA’s Frank Swaelens notes, “we are seeing the increasing influence of digitalization and e-commerce as patients are buying more healthcare products online. In Belgium specifically, there is a rise of para pharmacies, which are thousands of square meters in size and sell mostly consumer health products as well as some pharmaceuticals.” He cautions that “Between these trends, traditional pharmacies have to re-invent their operations to stay relevant.”
For consumer healthcare giant Perrigo, these trends are nothing new but vice president and general manager for Belux Christophe van Damme warns that the COVID-19 pandemic looks set to accelerate them even further.
“I predict that some of the changes in consumer preferences will remain after the pandemic ends,” he proclaims. “Therefore, we as an organisation need to be ready for the shape of this ‘new normal.’ We see two major opportunities at the horizon. First, we are seeing evolved needs driving shifts in demand: more towards self-care and prevention, premiumisation (trading up) and at the same time also trading down opportunities via value offers and different pack sizing.”
van Damme continues, “Second, we are also witnessing an accelerated adoption of already ongoing trends such as the switch to e-commerce and B2C, where Perrigo intends to further step up consumer experience, technology adoption (such as e-appointments with Belgian doctors) and conscious consumption where consumers go back to purpose-driven, sustainable brands.”
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2020. Healthcare & Life Sciences Review was produced by Pharmaboardroom.
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