Podcast: Europe in Good Health: Securing EU Leadership in Life Sciences: Panel 1

This podcast [music] is brought to you by the IEA. Sharing ideas, shaping policy. [music] >> Good morning everybody. Good morning everybody. We're going to get started. You're so welcome today. Uh just a couple of housekeeping before we start. If there is any difficulty, if there is any concern, any alarm goes off, please use the exits, you'll see them lit by green. And again, h as a courtesy to all of our speakers, you might turn your phones to silent, please. Um, I have to say at the beginning, we've had unfortunate and I'm sure many of you will have seen it on the news, flight disruptions. Uh, so we are agile and flexible and we have switched some of the program around. Um and we will have some of one of our speakers online. Um but particularly we will miss Anuk Devoy whose uh flight has been delayed but I have no doubt we have a very full morning for you all. Indeed a full day uh until until after lunch. So good morning. You're most welcome. Can I particularly welcome uh all of our members here today? And can I get a plug in straight away for those of you who are not members? Um our team are here with blue lanyards. please speak to them. We are an independent uh agency and we look forward to always having new membership. But today it's about welcoming colleagues from the European institutions, the Irish government and the public service, industry, research, patient organizations and indeed the wider policy committee. Your presence reflects the breadth of the agenda that we have with us today and the importance of bringing different perspectives together as we in the institute always strive to do. Can I start in the first instance by thanking Johnson and Johnson for sponsoring today's event and for their continued engagement with the institute. J&J is a very valued member of the institute and a long-standing collaborator of ours. Our partnership has included Ireland and the European Health Union series in 2022 and 23 and three-part developing a life science vision for Ireland series in 25. Today's conference builds on that sustained program of dialogue and a shared commitment to informed constructive discussion on the future of health and life sciences policy. I'm particularly pleased that this conference has been recognized as an associated event of the Irish Presidency of the Council of the European Union. As you know, the logo for the um and the this the uh logo for the uh presidency is ninera and indeed our strength is working together in unity and today reflects that in terms of our audience and your participation. But it does give us an opportunity to contribute ideas here um to the wider EU audience on how the EU can become more competitive, resilient and innovative. So that today our central message is very straightforward. Europe's health, economic and strategic ambitions are closely connected. Health is first and foremost fundamental to people's well-being. But strong health systems, scientific leadership, and a thriving life sciences sector support jobs, productivity, high quality jobs, investment, and the resilience of our economy. And putting health at the value, oh, I start again that sentence, please. Putting the value of health at the heart of policym is therefore not an alternative to a competitive agenda, but an essential part of it. I um am the former secretary general of the department of enterprise and trade. So health being a hugely important part of that I recognize it uh so well as that broader perspective. Europe begins from a position of considerable strength. We have worldclass researchers, universities, companies and healthcare expertise. We also have a single market of enormous potential 450 million people. But yet, I think we can all agree Europe has often found it hard to turn that scientific excellence into companies that scale, manufacturing that remains here, and innovation for patients. And indeed, our enterprise agencies, both Enterprise Ireland and IDA work very closely uh with uh the department and more broadly on that sector to manage that and turn that into the scale that we would wish. We would see that Europe can create the conditions in which research, investment, clinical trials, advanced manufacturing and skilled talent can prosper. At the same time, our health systems must be ready to adapt innovation safely, sustainably supported by modern data infrastructure and that appropriately skilled workforce that we have here in Ireland and more broadly. So today's program brings three key avenues together. Our first panel will consider how Europe can sharpen its competitive edge in life sciences and that includes the policy environment needed to support investment scaleup and the advanced manufacturing that we have here. Our second panel will focus more on driving innovation for patients, examining clinical research, health system readiness, and the partnerships we need to translate that breakthrough into better outcomes. We will be followed then and delighted to have uh the Minister for Health, Dr. Jennifer Carol O'Neal McNeel, and we will have a fireside discussion on Ireland's ambition and her ambitions for European health and life sciences, particularly in this time when Ireland holds the EU presidency. So, our timing here could not be more appropriate. With major European pol policy initiatives advancing during the Irish presidency, we have an opportunity now to help shape that practical but ambitious agenda. Our established life science space here in Ireland gives us that valuable experience that we can bring. But it also places a responsibility on us to contribute more constructively and more positively on the wider European stage. So I hope today's discussions will be candid, practical and optimistic. Our challenges across Europe are significant, but so too are our capabilities. By connecting that public policy, the research industry, the health services, and the patient voice in particular, we can develop an ecosystem that's more innovative, more competitive, and better able to deliver for people across the EU. So can I thank you again Johnson and Johnson for your valued part partnership and support to our moderator Audrey Carville who's with us today and all our speakers for joining us and in particular all of you here who are here to take part. So it is now my great pleasure to invite Maria Porre general manager of Johnson and Johnson Innovative Medicine Ireland to deliver her opening remarks. Maria over to you. Good morning everyone. On behalf of Johnson and Johnson, it is my privilege to welcome you to this important conference and to thank the Institute of International and European and European affairs for bringing us together today. The institute has long played a unique and valuable role in Ireland's public policy landscape. It has built a well-deserved reputation as one of Ireland's leading forums for expert discussion on the most consequential issues facing the European and international community. We are proud to support the institute's mission and are delighted to partner with the institute for today's event. At a time when Europe faces complex strategic challenges, spaces like this where diverse perspectives can come together to explore solutions are more important than ever. And the timing of this conversation could not be more relevant. Across the EU, policymakers increasingly recognize that Europe's future prosperity will depend on its ability to remain a global leader in the industries that drive innovation, attract investment, and create high value jobs. Life sciences is unquestionably one of those industries. But not only is this sector critical for economic progress, it has profound impact on the health of our population. Its innovations help people live longer, healthier, and more independent lives. Living longer and healthier together with economic growth is the type of prosperity that we all should strive for in Europe. Having just relocated to Ireland myself this summer with my family from Spain and spent much of my career working across different markets and healthcare systems, I have seen firsthand the strengths that Europe brings to the life sciences. We have world-class researchers, a highly skilled workforce, strong scientific institutions, and a shared commitment to improving people's lives through innovation. The challenge is how we build on those strengths to ensure Europe secures its leadership in an increasingly competitive world. Ireland has an important part to play in that story. This country has become one of the world's leading life sciences hubs combining scientific and clinical excellence manufacturing capability and strong collaboration with academia. In Johnson and Johnson, we are actively engaged in that thriving ecosystem through our nine sites across Ireland, including R&D, manufacturing, and commercial campuses. Ireland's presidency of the e of the council of the EU is a real opportunity to lead critical conversations around innovation, competitiveness, health, and industrial policy and to demonstrate how these priorities can support one another. Health policy and competitiveness policy are not separate conversations and they should not happen in separate rooms. They are fundamentally connected and that is why today's discussion is so important. I would like to thank all of our distinguished speakers for contributing with your expertise and insights today. And finally, I would like to acknowledge the Irish officials and policy makers who have made the time to be here during such a busy time period for the state. I would like to compliment you for all your work to make the Irish presidency of the EU a success and for your positive engagement with the life sciences sector over them over so many months. I look forward to a thought-provoking discussion. Thank you again to the institute for convening us and enjoy the conference. Well, hello everyone. Good morning and you're all so welcome. It's great to see so many of you here today. My name is Audrey Carville and I present radio programs for RTE and the BBC and I am honored to be here today and I'm very grateful and thank you to the institute for inviting me. We have a really interesting few hours ahead of us with some wonderful speakers who are going to share their insights and their work with us all. And I am forever inspired and heartened by the incredible work that so many of you do. That vital work that Maria talked about there, vital because underpinning it is that crucial thing that we on the other end of that work all need to keep going, to keep believing. You give us hope. It's what you bring to our loved ones who are living with illness, hope for a cure, hope to see our children grow up, hope for life. So the life sciences sector it's it's extremely important but as we've been hearing already from Ora and from Maria it has so many challenges in Europe now from navigating the rules of 27 member states to speeding up approvals to increasing the number of clinical trials and more besides. So, we're going to discuss as much of this as possible today h up until 2:00. We'll have two panel discussions. Then the health minister h will join us as well. And you will be able to participate directly in all of those conversations because we will have a roaming microphone and you can put your questions directly to our guests today. And the journalist in me must remind you that all comments are being made on the record. And I let you into a little journalistic secret. There's no such thing as off the record. So now you know. [laughter] So let's begin our conversation and let me welcome to our stage here Rachel Shelley who is global head of life sciences and food with IDA Ireland and Professor Mark Ferguson who is former chairperson of the European Innovation Council board. And we're joined on screen today as part of this panel discussion by Anuk Duvet, head of government affairs and policy at Johnson and Johnson in Europe, the Middle East and Africa. And finally, Thomas Van Kang, who is deputy head of unit and head of the biotech task force at the European Commission's Directorate General for Health and Food Safety, [applause] being with us today. So, I might start with you, Thomas. Um, from the European Commission's perspective, if you could set out what you believe the EU needs to do in order to secure global leadership in the life sciences. >> Okay. Thank you. And good morning. Sorry. I was trying to fix my camera, which apparently is a little out of focus, but >> No, you look great. >> You do, too. Um, and thanks for having me in remote. I'm sorry I couldn't be with you in in Dublin. Um I mean I don't want to be long for this introduction. I mean we do know there is this global competitiveness race. I think it was very well tweaked in the introduction. I think we can all understand why I mean it is obviously life sciences in general but biotech in particular so important because of its growth potential for the economy uh in terms of societal importance. it is vital I mean in the literal sense for security in terms of strategic autonomy. Yes, we do want to have a vibrant life science and in particular biotech sector in the EU. Um, and that's why we came up with a proposal for a biotech act at the end of last year. And I think what what I would say is crucial if we want to be a leader um in my view and where we stand now with the negotiations on the biotech act is a to be focused. I mean we know and they were explained also in the introduction what our strengths what our weaknesses uh we know very well what we should be doing. We know what the others do. So if we can try to keep a clear sense of trajectory, I think it is uh what can make the biotech act a significant contribution to our competitiveness. And in that for instance when when we developed the proposal for the biotech act I think one one main criterion we had while making sure that we had always the patient at the end of the road in mind and while ensuring that we do not lower any kind of safety or quality standards that we have in the EU. Every measure was assessed through the the prism of whether or not and to what extent it does make life easier for biotech companies. it does make investing uh growing uh innovating in Europe more attractive. I think if if we have that simple criterion in mind and and lens to apply, I think we can make it happen without trying to fix every problem of the world in in a piece of European legislation. And the second thing I need I think we need to keep behind the beyond the focus is maybe this thinking boldly as Europeans. Uh I I and there I mean kudos to the Irish presidency by the way because we are entering this inter institutional negotiation phase in Ireland as the presidency for the six months we have now I think is really doing this in a in extremely uh focused and bold manner in the sense that I think we would like to keep the ambition we have in this biotech act proposal if there's a political consens to go beyond. Of course, let's push and go beyond. Um, but I I can sense with the Irish presidency that precisely this sense for urgency and the importance of bold action to preserve the the competitiveness of of life science sector in the EU is very much at the heart of the of the negotiations. So I think um yeah that's that would be my simple introduction maybe bold and focused um if if we do this and then I know the biotech act is not the solution to every problem but if we apply this throughout in life sciences in general I think we can make sure Europe remains a nice place for for life sciences and biotech >> Thomas thank you very much Rachel from your experience working with international investors what are the main factors that now determine whether a life sciences company chooses to invest, expand and carry out advanced manufacturing in Europe. >> Well, certainly, you know, the some of the factors around FDI and why companies invested here haven't changed in terms of the access to talent, the capability, manufacturing excellence that countries um can can bring to manufacturers. But I think increasingly the focus and the factors that are becoming uh much more prevalent now are much more around scale and access to innovative ecosystems and speed. And this is really you know as we look at the pressure on manufacturers to bring mark products to market quickly. As we look at the advancements and the opportunity around innovation with regards to developing new therapies and new treatments, the demand for products and you know we talked earlier on about having healthy economies, healthy people mean and contribute to healthy economies. The demand and the pressure to bring products to market quickly is intense. So company compan companies when they're looking internationally at investing they're looking at ecosystems that can provide that innovative capability and have that have that joined up approach and that opportunity to enable them to scale and get products to market quickly and ultimately to have that impact at patient level. I do think we're at a really important inflection point now with the biotech act coming on stream. There's a real opportunity through the simplification agenda to really close that innovation gap. And I think the ambition certainly within the life sciences strategy really does set out the opportunity for Europe to enable that highly connected value chain from discovery through to research through to manufacturing through to uh through to regulatory and and and ultimately to the patient to streamline and speed up and simplify and offer a much more predictable and more certain environment for international investors. So, you know, I loved the opening comments around uh agility and adaptability as we we as we talk about in our own strategy within IDA, but also optimism. And I think we have to lean into this moment now to really drive um the momentum that we have in bringing this sector, which is absolutely phenomenal from an economic impact perspective, but into the next uh wave of investment and and innovation that will drive patient care far into the future. So, >> thank you, Rachel. Anuk, you're joining us um from Brussels today. And from your perspective in J&J, is the EU moving quickly enough to turn its competitiveness agenda into a reality and keep investment, innovation, and manufacturing here in Europe? >> No, thank you very much, Audrian. Well, first of all, I'm really sorry not to be there in person. I was on my way to Dublin yesterday evening, but my flight got cancelled and there was no way getting there on time. Um but still very happy to to be able to join you virtual like I've done during COVID times. Um but so to your question, well first of all indeed I speak on on behalf of Johnson and Johnson and I mean we see Europe as a very important place not only because it's part of our global network for manufacturing and R&D and and Ireland is a a very important component of that but also I mean Europe is a very important market and a lot of innovation happens in Europe. So clearly as Thomas also already explained, Europe understands this the challenge of u needing to move faster on competitiveness. Are we there yet? I'm not sure. I mean yes clearly life science is seen as a strategic sector but the speed at which the policies need to change needs to further accelerate and I think that that speed becomes real re very real and and you mentioned it as well Audrey when you have a close member of your family or friends with with a certain disease for which there are no options yet unfortunately one of my very close friend is in that situation right now and then that nothing is going fast enough of But then at the same time, you know, innovation moves. Look at at what we've done in in oncology, in cancer, in in bladder cancer. Just a few years ago, the only option was radical surgery of the bladder removal. Now there are many options and these things happen because innovation is is supported and because the frameworks are are able the policy frameworks are are moving in the right direction. Um but I think one of the key problems is that the cost of innovation and the value of health in today's world is still not recognized in in the best possible way. It is too often seen as a cost. Um and we discuss far less the value that it actually creates. And you know there was just a new study released also by our European industry association that actually showed that when 12 billion euros is invested in health it generates 66 billion in societal and economic gains. So you know 9 billion of hospital costs can be avoided. Basically, every euro you invest generates 5.7 in value. And with that, we can save and it's an astronomical number that I find difficult to grasp myself, but we can 2 million years of life can be saved of people before the age of 85 across 29 countries. So you know I think for the speed of innovation and competitiveness to uh really go at the right level we need to look at it in a combined fashion the right policies and I think we'll talk more about that in in this panel as well at European level but also in the member states the medicine's budgets not just seen as a cost but as a driver for innovation and competitiveness. So, is Europe moving? I would say absolutely. Is it moving quickly enough? I I like speed in general, so I'm not convinced yet. I see science moving at a rocket speed, but we need to make sure that that policies and health care systems can continue to catch up with the speed of science. >> And look, thank you very much. H Mark to you because you have worked across research, innovation, commercialization throughout your career. So you have a holistic perspective on what we're talking about today. If Europe was to look stronger and to be more competitive in five years time, is there one change that you believe could make the greatest difference to Europe's ability to translate scientific excellence into economic value? >> Great. Thanks very much. So, so I'll focus my comments mostly on the biotech industry. So, as you know, pharma and biotech enjoy a very symbiotic relationship. It's actually a very good relationship uh where companies either collaborate or acquire uh biotech companies. So if you look at Europe, I mean if you look at publications and citations, then Europe is pretty much on a par with the United States and China. If you look at startup companies, then in Europe last year we started 27,000 companies. In the US they started 26,000 companies. So we're pretty much on a par with startups. Where we have a problem is scaling. Scaling those startups into large meaningful companies is where the US excels. So what has the commission uh done to address this? Well, the first thing was the formation of the European Innovation Council. Remember I am biased because I was uh to do with the beginning of that and I was also the first chair. But the EIC is a 10 billion essentially fund to co-invest uh in scaling companies and co-investment is important. The trick is to leverage in private capital. So over the last uh period of time we've made about 15 billion uh euros worth of investment. We've leveraged 3.5 euros of private sector money for every one euro of commission money. So that's pretty good. um and they have been very successful. So if you look carefully at those companies, there's a large number of them over a thousand. Few interesting statistics, less than 1% have relocated. So you will have heard this uh story that uh biotech companies and other tech companies relocate to the United States. Well, 99% of the EIC investments are still within Europe, only 1% in the US. If you look more broadly at all uh startup and scaling companies across Europe, more than 80% are still located as with their headquarters in Europe. If you look at the high growth tech companies, those that are going on to become unicorns, 87% of those European founders still retain the companies within Europe. So the idea that people are moving on mass to the US is a myth. What people do is they move part of the operation to the US for two principal reasons. One is capital, capital investment which I've talked about and the second is sales. It's much easier. It's a single approval in the US. It's 27 uh in the in the EU. But retaining the headquarters is really important. And one final thing I will say is that with the European Innovation Council, 30% of the tech companies that are invested in are led by women. When we started less than 5 years ago, that number was 8%. It is a wonderful example of how public policy where we were really focused on encouraging woman founders and woman senior leadership can influence the private sector because remember these companies are invested by private VC that previously was not investing in female founders. So what else needs to be done? Well, we haven't enough. The EIC, the biggest ticket that the European Innovation Council can write currently is €30 million euros. That means it's at least 150 to 200 million round. Um but that's not enough. So last year uh we launched the scaleup fund. The scaleup fund is uh targeted to be 30 billion. The first close is 5 billion which is closed. 1 billion of that is from the European Commission. 4 billion is from the private sector. At the moment it's a major foundations Nova Nordisk Foundation uh the Wenberg Foundation Caxia Foundation in Spain uh and also Europe's largest insurer. The target is pension funds. So you asked me a question, what is the one thing we could do? We could get pension funds to invest more in venture capital. Pension funds in the United States invest three times as much in venture capital as their European counterparts. Um, in Europe, it's less than 0.1% of the assets under management from pension funds, of which there are trillions of euros, basically go into venture. And that's for no good reason. I can go into that in some detail, but I won't in my opening remarks, but the target is to try to get those pension funds to invest more in venture capital. If European f pension funds invested the same in venture capital as our American counterparts, it would unlock€ 250 billion euros per Anna, which is a significant amount for investment and scaling companies. And if you think that European investments are not very good, then I can tell you an embarrassing figure. American pension funds invest more in European tech than European pension funds. So when a European biotech company does well, the teachers in California benefit, but the teachers in Ireland or Germany or France do not. And then a final thing, Ireland is dreadful in terms of uh pension uh investments in VC. And part of the reason for that is there actually isn't a pension fund in Ireland. It's a kind of scheme where the current employees pay the pensions of the those who are retired across Europe. where there is a real pension fund then that's where you can deploy resource. You can't deploy resource if you don't have a fund. So that's one of the major targets. Couple of closing comments. I've focused a lot on capital. I think that's really important. And I also think Europe is moving fast. For those of you who believe the commission is slow and bureaucratic, it was one year to decide to open the compartment from the EIC to raise three billion from the private sector to advertise and appoint EQT, the Swedish uh uh private equity manager to manage the fund. This fund is managed by EQT. That's pretty good actually. That's moving at the private sector speed and the EIC will always move at the private sector speed because we have to co-invest with these investors. Um so couple other things on the horizon. First is um uh the EU Inc. or the so-called 28th regime which is a set of legislation coming from Brussels uh to try and uniform startup and scaling conditions for companies across Europe. They're widely diverse the amount of equity that founders can take tax breaks and so on. It probably will not be legislation. It will probably be voluntary. Uh but nonetheless to unify that would be good. Horizon Europe will be on the horizon. Um that's very important in the Irish presidency for research and for innovation, innovation medicines initiative. So those complement what you've heard about in the biotech act. But I guess my closing remark would be Europe has the ability to lead if we choose to do so. And if we choose to do so, we must act with unity. We must act with speed. And we must be bold. And we are capable of doing those things. uh we just need to do more of them. >> Mark, thank you very much. Thomas, I'll come to you on that point raised by Mark there. Um have you identified the challenges that that Mark outlined there in terms of financing for scaling up uh for industry as one of the the the factors perhaps contributing to a decline in competitiveness in Europe? >> Yeah, I think we we fully share the the diagnostic that he he presented. uh we tried to explain also this rational in a document that accompanies the proposal for a biotech act but I think what what he explained is absolutely right. We have nothing to envy from a scientific perspective. But the more you move along the journey, the trickier or maybe the less attractive compared to others the EU can sometimes be. And besides this big focus on regulatory simplification that you find in the biotech act where we try to basically accelerate this time to market, the question of access to capital is the second big topic that we try to tackle in this proposal. And that's why you um you see in that chapter a proposal for something that is called an investment pilot u because we are in a stage of financial cycle that the EU has of seven years that we close in two. Our intention is of course to go beyond a two-year horizon because for biotech investment it doesn't make much sense. Um but we were born by this and we will try to pilot it for two years where we basically work together with the EIB in the same spirit as uh what the EIC does to really try and ask them to design financial instruments that can crowd in as much private capital as possible uh because as was hinted at there's no public funding that would be able to to cover the needs the investment needs of the biotech sector but what it can do is indeed help the risk and crowding in some of the private investment that is needed. In parallel to that, we have of course discussions because it's not it's not unique to the biotech sector. Uh this access to capital issue obviously. So we talk with our colleagues from from the financial services department about this risk aversion of a of a of pension funds or some some more horizontal measures that could be done. But the biotech sector is specific in the sense that you have this basically huge latency from the moment you have a discovery to till you actually have a commercially viable product. So this long latency you have a super big risk of failure. I think in the cell and gene therapies it's a yeah 2% success rate from the preclinical to ending up with a product and then you have this huge uh investments needed up front before you even know whether you have a product to run clinical trials I mean I know and you know better than me but can be extremely costy. So these three uh elements make the investment profile of a b company pretty unique. So you need this expertise and this analyst capacity that is not always fully present on a scale that could be needed in the EU to steer investment in in this sector. So that's why you will see if you read the biotech act proposal this chapter on access to capital read this uh investment facility as a main one but some other ideas more geared towards u supporting IPOs. So going listing on the stock market for companies as an alternative to being as you were hinted at to as an alternative for a small biotech to being bought by a larger pharma companies and also because basically venture capitalist will step in if they have an exit option typically going public. So I think the the access to capital angle is the biggest topic in the biotech act together with the regulatory simplification and then some others but for for the very valid reason that that was just explained before. Yes. >> Are you glad to hear that there's such a focus on that in the biotech act? >> Absolutely. I mean there can't be enough capital. That's basically the the message and we are doing things uh to try to um uh increase and it's not that we don't want US capital. I don't want to give that idea. We just want people to have a choice. Okay, you've got to be able to scale. And all tech companies, whether they're biotech companies or AI companies, they basically follow power law dynamics. So what does that mean? It means that the outliers create a disproportionate amount of the success. The outliers get very big. They create a lot of jobs. They create a lot of wealth and they have a high value. So this is a kind of interesting investment. I mean you basically have to back winners and you need to be able to see what's happening. Uh the first investment out of Europe scaleup fund. It's a 100 million investment in a three billion round that's just closing uh with Maestral which is a French uh AI um uh company also building data centers and all that kind of stuff uh for the for the infrastructure platform. So I mean this is a significant round. We've got to be able to participate in rounds of financing that are 3 billion. Now, the the money is there in the pension insurance funds. People talk about risk aversion within Europe, but people in this room, I guarantee you, you're all invested in some way in high-tech uh companies. 15 trillion, I repeat, 15 trillion euros of European savers money is invested in UK US tech companies. So if you think people in Europe are risk averse, actually they're not because they're investing in tech companies. What we need to do is to have the choice to be able to invest in European companies, we need to have those companies there to be invested in. Of course, it's great. You should invest all over the world. Cross uh dynamics is great. So, I'm actually quite optimistic. There's a long journey to go. We need to be able to have capital. We absolutely need to have regulation sensible. Um, you know, I'm very fond of saying if you want to go fast, you need brakes on a car. You don't need brakes on a slow car, okay? You need brakes on a fast car. So, what does that tell you about regulation? You need sensible regulation, not no regulation. If you want to go fast, you need to have sensible guard rails. Not too much, but not none. And I think there there's an opportunity for Europe. You know, I would guess the European mantra should be go fast and don't break things. I mean, the US mantra is go fast and break things. Why would you want to break them? Um, so, you know, we want we want to go fast. We want to have some regulation around us to be sensible but not excessive. That's the challenge. Anuk, there's a lot of hope in the biotech act, but how do you see it contributing to what we're talking about now? That um ability of Europe to attract and to retain investment and to allow scaling up. >> Yeah. No, thanks a lot. And well, I think Tom has already mentioned that indeed in in biotech the success rate, the risk that's a big component. So what do also big companies like the one I work for need is predictability and a very strong IP intellectual property framework and on that the the European Union has been strong for for many many decades already and I think what we see now with the biotech act is also very promising. There is a provision in there that would give to certain um products made by biotechnology and advanced therapies an additional 12 months of supplementary patent certificate which basically means an extension of your of your basic patent and and that is very important because it gives a signal that Europe wants to attract investments and wants to reward innovation. there's still and and Thomas knows this um from the the industry's perspective the provision is a very good one but there's room for improvement to make it achievable because you need to match certain criteria and I don't want to become too technical but there with the European Parliament the member states it will be important that to make sure that this provision actually works in practice because otherwise as we started off with it's really great to have nice policies but they need to work in practice So still a bit of room but that's a very important provision that I hope will be maintained because some member states again see this extension of a patent purely as a cost and not as something to track attract innovation and to boost competitiveness. The second provision that for a company of our scale is very important and very welcomed is the further improvement of the clinical trials framework which is already quite good in Europe but still too fragmented. There's still a lot of room even in the proposal to make it more European because I think that's the other big hurdle that we have in terms of competitiveness in in Europe. it there is still too much fragmentation. Each member state is trying to attract the best for itself and of course that's normal but at the same time if we want to compete globally we need to think as one Europe and on clinical trials really I see this as a no-brainer. You could have our amazing European medicines agency that is doing already a great job on the authorization playing a much more important role in having one clinical trial system for Europe where member states obviously play a critical role in the approval of ethics and everything that is needed but one assessment, one approval, one gateway for patients to access clinical trials and for companies simplification. So I I really hope uh and it's one of my also as a as a European hopes for Europe that we can make this happen. It's now or never. I think we don't need to wait another decade. So those two provisions, I mean for a company like J&J are are definitely the the critical ones and I think Thomas you said it in in your remarks as well. The commission looked at the proposal um through the lens of is it making Europe faster, more predictable, more attractive? So will it be successful? Yes, if it meets those three things. I I fully agree with that. So let's make sure in the political process that doesn't get lost. Anuk, thank you. And we will be discussing clinical trials in in great detail in our second panel discussion a little bit later on. Rachel, from your experience h working with IDA Ireland at the level that you do, are there lessons from the experience here in Ireland because we are a country that has been successful in attracting major investment in this sector and I wonder what lessons could be applied at EU level. I think from a from a life sciences perspective in Ireland, one thing that has really worked is setting a very clear policy direction in relation to bringing cohesion and bringing coordination I suppose and collaboration between industry and enterprise and indeed into into academia. And I think that has worked really well as we've seen investment in our skills in Ireland, investment in our infrastructure in Ireland, and indeed in our in our centers of excellence in Ireland, for example, the likes of Nybert, which has been really really at the heart of driving that wave of biotech growth that we've seen in the last decade. And they've been very clear policy direction that has been set by government and a consistency that has been followed by success of governments over many years. And I think that's been, you know, for an industry that's been uh growing and going and building on strength and strength for over 70 years, that that clarity, I think, of purpose and that sense of of direction has been very important. And I do think it's the cohesion and the coordination and the alignment piece that um from a European perspective, the real value will be in. I think some of the points that have all been made there has been moving from a fragmented approach where regulation has been done for the right reasons and and and there's no doubt that regulation is critically important in this industry but it's having workable regulation predictable regulation you know and bringing speed to that and certainty to that is is a key piece. So when we look at the coordination and the opportunity for Europe to really work together for the single market to be a platform for growth in a much more unified fashion to enable and unlock the potential at a panuropean level as we've talked about there in clinical trials I think you know there are real opportunities for us to do that now because that as I as you I've just said has been really I suppose the success for Ireland as a small country you know has been looking outwards and looking how do we how do we really drive the sectoral and it has been taking in that very clear direction. I think bringing the different elements of biotech, act, life sciences, strategy at a European level of clinical trials, the work that's going on at a data perspective across Europe together and rather than looking at them as separate policy initiatives, but as one cohesive framework for growth, I think we're in a really really good position to to uh really elevate and drive the next uh the next wave of investment into Europe more broadly. and and Rachel when we've been talking there about start um scaling up do startups struggle to find that private capital to allow them to scale up in relation to whether it's their competitors in the US and Asia >> well I think certainly the scaling factor I mean Mark nailed it earlier on when he was talking about that I mean we know the support that's there and the potential that's there around startup companies there's very very dynamic ecosystem around that but it is how do you get to that point where you can really grow and you know ultimately uh continue to be successful. So I think some of the the comments that Mark made are really really terrific and some of the initiatives are now being brought in at a European level. But I think you know funding for growth and scaling isn't just aboutmemes and startups either. You know there are multinational companies that really need to continue to invest in their competitiveness and international companies and European companies that we need to invest in their competitiveness using digitalization using new technologies and they're capital intensive projects. their, you know, their important priority projects. So, enabling companies to really continue to invest in their growth um so that they can continue to create the jobs, create the innovation, create the partnerships and indeed produce those products and and devices for the future I think is as important um as obviously continuing to make sure we help thosememes to get up and running and scale at speed h and and really bring that value to the market. Thomas, Mark talked there about regulation, some regulation, but not too much regulation, not no regulation. Where does the biotech act fall in relation to regulation? Where is it on that scale? >> I mean, yeah, I first I fully agree and I mean, it's not about more or less regulation in general. We have this better regulation angle in in the commission. If you look at numbers of pages produced per year in the US at different levels of government, you you exceed what what you can prod but again not about the quantity the quality um and that's very much at the heart of the biotech act. So we touched upon the access to capital provisions a big part the rest is a lot on regulatory simplification. So basically through the biotech act as a piece of legislation we amend six other sectoral legislations uh to try and where we see room for improvements always without lowering any kind of European standards in terms of quality and safety and always having patience in mind. We try to see where we can optimize processes or update certain things that have been there for a while but because of technological and scientific developments can be revisited. So in the biotech act you have amendments for instance to the legislations on advanced therapies or cell engine therapies essentially to for instance in some instances where the risk is extremely or completely negligible on an existing to get a deroggation from having to produce what was historically done that is called an environmental risk assessment. But if there's absolutely no risk from an environmental perspective, this is nowadays sometimes produced as a tick the box exercise that is not adding any kind of value nor any benefit nor any extra safeguards as you were mentioning. Um the same with the clinical trials I think big changes there to try and streamline processes. uh and also having a more European approach in the sense that it's still a very national competence but what we proposed there is to have a reporting member state in charge of assessing clinical trials and processing the authorization on behalf of all these participating countries. So whereas in the past you would go maybe at the speed of the lowest participating country there you basically entrust one country for the assessment. I mean many areas where we try to introduce a bit of oil in the system to try and accelerate things again without lowering standards. So maybe to some sometimes we're not going to go fast enough but I think we also agree that I mean I we don't necessarily want to have a Chinese model for our clinical trials or US social model. So we do things the European way but where we could really accelerate and give a boost we did. So again I mean I will not go through the six unless you want me to but uh we systematically went through what companies were experimenting as pain points and discuss that with our scientific agencies in to see where things were maybe no longer needed or could be optimized and we tried to come up with something that makes a significant difference without lowering the bar. >> Thank you Thomas. Um, Anuka, you talked a lot about the cost and not seeing driving innovation and competitiveness as a cost. It's a value ultimately and I wonder what you think of the role of the member states in that regard. Do the the different rules across 27 different member states, does that drive up costs? >> No, thanks Audrey. I I think indeed it is. I mean the role of the member states is is huge also in the the determination of whether Europe will be competitive. Whether it's uh whether it's different rules in the different member states that drives up the cost. I'm I'm not sure that that's the real reason for me. The the real reason is more the lack of the recognition of the value of the innovation at that part of the process. I think everybody wants innovation to happen in Europe. the research, the development, the manufacturing. But then when it comes towards this last phase which is making sure patients get access and the the reimbursement decision discussions that we basically have that's where it often breaks down and and where that value is not recognized at the right levels in many countries to say you know with the the Irish uh industry association recently we were able to conclude an amazing agreement with the Irish government that will help to speed up access to innovation in Ireland. So those are examples that are very positive. On the other hand, we see a lot of member states um right now actually implementing certain measures that will actually further undermine the value of innovation and those signals also in companies like ours are being watched very closely because they the the value of innovation has to pull through from as I said the early stage to the end stage otherwise also and it's not just for companies like J&J it's the Same I would assume for biotech companies all the risk you have taken all the investment you have made all the future investments you want to make they need to be recouped somewhere right so so if it breaks down at that final stage it breaks down so I I think there is hope also with the now European joint clinical assessment uh process which is only one piece beginning of of the HDA process and patient access process that more uh coordination between the member states in the right way can be done on how that innovation should be valued but at the end of the day I mean healthare systems and paying for patients uh and healthcare will always remain a local decision right so I don't think we need to look at how we bring that together but we need to look at the methodologies and also the sciencebased approach of those last stages ages of value recognition and patient access and there there it's often breaking down. Maybe last point, this becomes even more important today in the global context where the world is so interconnected. So we we want to make sure that what we make in Europe, do in Europe can also be accessed in Europe, right? So it is a very important component. Yeah. >> Thank you. Buuk Mark will you talk to us on your views on the different rules, the different regulations across the various member states and that impact on our competitiveness. >> So I mean of course the more we can do to harmonize and actually to have a single rule the better. If you had a single approval for a clinical trial and you could operate in all member states it would be fantastic. So it's about balancing you know what is essentially the commission's role and what's the member state's role and I think you know going forward all countries Ireland included need to take a more European view because actually we need to be more competitive at a European level. So that that's going to be an important facet. The second comment I would make is that in the in this game um I think a lot is going to change with artificial intelligence and I'll just say a few words about that. I'm not going to talk about AI in terms of life science discovery where I actually think there will be huge impacts and huge relevance. But in terms of grant funding and so on, um I mean at the moment 80% of researchers admit to using AI when writing a grant application. That means that at least 90% of them are doing them. Um and many many uh grant funding agencies use AI to assess the proposals. So why are we writing proposals? There's an algorithm writing the the uh application and there's another algorithm uh assessing it. Even more disturbingly or interesting depending what way you want to look at it, there's a recent experiment that took um 200 distinguished scientists and asked them to write a grant application to a particular call and then it took a dedicated AI agent. I'm not talking about chat GD GPT. I'm talking about a dedicated agent that's trained to write a grant application. And statistically significantly, the AI agent wrote a better application than the person. Why? Because the AI agent looked at all of the criteria from the funer and made sure it addressed all of them. If you then take those applications that were written by the AI agent and uh send them out to assessment, there's less than 5% difference between them. So our current system doesn't work in the face of AI because you're getting really really well-crafted applications with very little difference between them and you can produce these at volume. It takes about two minutes with an agent to write a European application. Anybody complaining about European grant application being bureaucratic? Two minutes with an AI agent. Okay. So so that's a problem. At the National Institute of Health in the United States, a single investigator submitted 37 applications to one round. Why? Because you can write 37 applications in about an hour. So just imagine, you take the current system and multiply it by 10 or 20 or 30, you will be overwhelmed. So I think we live in a very interesting time when we're going to have to rethink all of this. So let me give you a vision of what this could look like. You know the the real potential of artificial intelligence. Put together a database in the life sciences, let's say, of all the grant applications ever submitted to the European Commission. Add into that all the grant applications submitted in various member states including Ireland. Link that with the European patent database, the US patent database and a publication database. And now you can ask very interesting questions. Who is the individual or group of individuals who are most likely to solve this problem? Have they ever filed a patent application? Have they ever started a company? You can do really amazing things and you don't have to throw everything open to open competition. So, so I think we need to rethink a lot of our ways we do things because of the potential and I suppose the threat that's been opened up by AI. And I think we can do some of those things very very well. So my two kind of governing pieces would be you need direction with competition. So you need to set a direction but you need to have competition within that. Uh and then you also need to look at the whole value chain that you talked about that earlier. You need to think about how you get it discovery how you move that through to potentially uh a clinical application. how you scale that into something where you can serve uh global needs. And I think those two those two principles and and thinking out of the box. So how could we think out of the box with grant applications in the future? Here's an idea. I'm going to confess that this is my personal input into one of the horizon things. It may not happen and it may be a silly idea. It's just my idea. So um take it for that. But supposing we had a collaboration between a large company, say a small biotech company, maybe an academic collaborator in a European grant and the purpose of that was to do something. Okay, it was maybe to make something or discover something or whatever. At the end of that application, if the funer, in this case, the commission said, if this is successful and the large company decides to take it forward, we will pay 30% of the cost of procurement of the product. You could easily justify that. It's absolutely within the rules because first procure has a high risk etc. with a product. So you put a prize almost at the end of the grant application and that prize is to drive the application of whatever it is you're trying to solve and that does two things. First of all incentivizes people to solve the problem and secondly it means that you can move faster and it makes Europe more competitive. So I think we need to be thinking about things like this as different ways of doing things that incentivize companies, academics, innovators, um, uh, startup companies to work in a kind of value chain faster and incentivized. So it's like direction with competition clearly if you don't meet the needs and that tells you a lot because if the company is going to invest further in taking it forward, what do you need all this assessment application stuff for? Nobody's going to be committing that sum of money for something that's silly. So it becomes really quite interesting. I think our current systems will be challenged in a way that many people have not even seen the wall, never mind the writing on the wall from artificial intelligence. It's going very fast. It's being implemented very fast and I don't think the current systems will survive uh in that kind and I think it opens up completely new opportunities. So I'm not a pessimist. I'm actually very optimistic. I just think we need to think of new ways of doing things. You know, I was interviewed by a very aggressive journalist recently and I said that I wish I was 40 years old uh because I could then uh implement all this AI but I'm 71 so I can't do this. And she said, "You're 71. I'm very sorry for disturbing an old man." And hung up. [laughter] So now I have discovered how to get rid of nasty journalists. So, I'm just going to tell him I'm old and senior. I don't know what to do. >> That leads us actually nicely into our next little bit of our discussion to do with research and skills. And you mentioned AI and and we'll get to whether you think our education and workforce policies are keeping up to date with all of the developments in these areas. Um, but Rachel, in your line of work and what you do, where are you seeing the most significant skill gaps emerging at the moment? Yeah. So I think it's it's been fascinating actually looking at the the profile of the the skills change over the last number of years within life sciences. And I think we're absolutely seeing now is the convergence between you know science, technology, data and all the the points that Mark has made there around the opportunity and impact around AI. So I think you know fundamentally we've done really well at building up you know the the the skills base and continuing to evolve on the STEM courses and so forth but the whole space around digital literacy is one that we continue to need to focus on you know at a European level and and at national levels to really drive that adoption of technology at a much earlier stage so we just become much more proficient and can unlock some of the great potential that's going to come because we see the investments are there in the data infrastructure see the potential to align much better at an international and at a European level around this. So I think that we we don't know what the future looks like just yet to to mark some of Mark's points. So I think the convergence piece and multidisciplinary skills are critically important here. So how do we develop those advanced therapies, you know, using new technologies? How do we digitize and create smart sustainable manufacturing environments that help us to have that agility in terms of production but also that build [clears throat] the innovation in and design for sustainability through the process as well and then what do we do with all the data how do we create products faster better how do we move through the regulatory processes faster better and indeed ideulate what the next generation looks like so I think being able to build that mult multiddisciplinary capability into the research and into the skills base critically important and having I suppose more uh faster and more innovative pathways to learning. You know, this is about lifelong learning. You know, manufacturing environments build up their capability over many many years. You don't just flip a switch overnight and you're digitized, you know. So, we need to make sure that we enable the workforce in terms of people coming into the workforce and people that are already in the workforce to adapt and adopt these new skills, new technologies and then apply them and optimize them going forward. And I think that's critically important. It's one of the key pillars for us as part of our own strategy and it's absolutely critical at a European level that we uh we really drive that upskilling because you know the innovation is coming at at pace and it's how do we harness that and then how do we ideulate and and and drive the next way forward. Thank you Rachel. We'll be coming to you very shortly so get your questions ready and um you'll be able to put them to any of our panelists today. Anuk just picking up with you on on what we've been talking about. Do you believe that our education and workforce policies have have kept pace with developments whether that is AI whether it's biio manufacturing advanced therapies and so on. >> No thanks Audrey. Well, abs well I would say first of all because indeed we've been talking a lot in terms of competitiveness as we need infrastructure we need the right policies but at at the end of the day innovation happens because of people and and because of smart people coming together um using AI in a smart way. So that at the end of the day that's also what matters and I I would say I mean this is less an area where I have deep expertise but I have visited quite a few of our sites. also across Europe. We have our major research side also in Belgium and and of course we have all the manufacturing and R&D also in Ireland. If I see at what speed also our way of manufacturing is changing the AI that we use to things that had to happen like visual inspection by people before now being done again by machines. we need to think about reskilling and and redeploying some of the people that were doing more manual work. Um, and we we need to continue to have the best possible people that can do this work as well in in and that you know so therefore I I have two uh young daughters myself both are at university level now and I think yeah the level of education in Europe is still at a very high level. the collaborations between universities and and we do that at J&J a lot. The ecosystems that were referred to before uh big companies, scales, biotech, startups, universities. I mean, we need that is the right approach, right? That should not be seen as as um big pharma companies taking over smart small startups. No, those ecosystems are what is needed to to make it work. And therefore, yeah, you need the right education and the right skill set for the future because in other regions, this is happening also full speed. And and I think yeah, particularly if we look at the the China biotech 2050 agenda. I mean, it's all about innovation and having the right skill set, attracting students from from Europe to come to China versus the US. So these are also very important areas where you know less may be something that I'm directly involved in as a employee of J&J but as a mother of two young girls that will have to enter the workforce in about 5 to 10 years something that keeps me awake. Yes. >> Thank you Anuk Thomas. What do you think to that question thing is we're nicely going to all chapters of the biotech. So AI and data is also a specific one. But on the skills, yes, I think I mean two thoughts. First on preserving that scientific excellence, fully agree with Anuk. I think China produces 100,000 PhDs every year. I mean it's not like it's a static situation. I mean even keeping this excellence requires sustained investment. What we looked at particularly in the biotech act with this competitiveness angle is the the issue of biio manufacturing which takes indeed infrastructures capacity but also a very specific kind of workforce and many companies we were speaking to were explaining to us that it's not easy to find people to do this more manual labor but with an advanced understanding of biology. I mean you're typically manipulating the the cells of the disease cells of a patient if you drop them I mean it's to be handled with care you're not dealing with simple chemicals um and there we don't have or standardized approach in Europe it's not easy to find this workforce and many companies actually told us they spend the first six or even nine months training these people these new hires uh to be able to to work in their company so there I think Ireland is an example that is very much looked because you have an institute called Nybert so the national institute for bio research and I mean basically the T stands for training u and it's something we looked at in the context of the biotech act it inspired also partly a chapter on this biomman boosting the biomuing capacity also through training I think it's something we will continue to look at and we're in contact with neighbor because again it's seen as a model many Many times we are told we need more ny birds in Europe. Uh meanwhile when you look at nightboard they have a global kind of alliance but where most of the members are actually not European. You have many different US states. I think there is collaboration with Korea. I mean many people come from outside to see how you do things near London and I think there there is also a domain where we can make more use of this European scale that we mention over and over uh by by by having a more European approach to what NIPER does as a concrete example. >> Thomas, thank you. We left you on your own there. Our apologies. We should have helped you out a little bit. [laughter] Thank you very much. Um Mark, just before we bring our audience in for some questions, do you think the Biotech Act One that we're talking about now, is that going to do the job? Is it going to make Europe more competitive in this sector? >> I hope so. And I think it will be down to member states. So I think the ambition is there with the commission. There's always a tension with member states um who understandably uh are reluctant to give up control or so-called competitive advantage. So I think all European uh member states, Ireland included, need to balance, you know, what what is sensible in the national interest to devolve to Europe. And I think if we keep that in mind, then if we can streamline things with the biotech act, if we can do the same thing with the 28th regime for uh companies, we'll be in good shape. the more we bulcanize it and the more we think actually we need to retain this because we want to be more competitive than the other country the less effective it will be and that's the tension and that will always be the tension um and I think that's for the those in the room to think about actually sometimes you can get country advantage by giving something up and being at a more panuropean level and that's the challenge >> Thomas the word you were looking for was training that's the T This podcast [music] is brought to you by the IEA. Sharing ideas, shaping policy.