Throwing the baby out with the bathwater

  • Posted on 19.11.2010

Throwing the baby out with the bathwater


John Wilkinson

Former Chief Executive of Eucomed


Health and Consumer Affairs Commissioner, John Dalli, made a typically balanced speech about his vision for health on the European agenda at a meeting organised by Friends of Europe. The high-level summit entitled ‘An Innovative Healthcare Agenda for Europe’,  was held this week in the magnificent setting of the Bibliotheque Solvay, in the heart of the ‘European district’ of Brussels. Outlining the four pillars of his strategy, he spoke about innovation, equity of access for all Europeans, quality and sustainability. In a very strong statement he linked these around the innovation agenda. His words were ‘ that survival of European health systems is dependent on innovation is now a given’.

Is this statement really true? It may well be in thoughtful policy circles in Brussels and perhaps some member states but I am really not sure that this ‘given’ has penetrated far into the mindsets of those responsible for running health systems across Europe and beyond. Here is the dilemma: if innovation is the solution to delivering high quality, sustainable healthcare to all citizens in Europe then how do we square this with almost universal efforts to dismantle incentives for individuals, institutions and businesses to invest in new and innovative technologies? These disincentives range from simple consequences of the financial crisis, which has resulted in a drying up of seed funding for the companies that take clinical inventiveness and turn it into tangible products, right through to a variety of mechanisms that governments are using to force down prices and raise the cost of doing business. I was staggered to learn yesterday that there was very little research and development going on in the area of new antibiotics because the projections on return on investment were so low as to be unattractive. This seems at odds with societal needs where infectious diseases are both resurgent and increasingly threatening in a very mobile world. I am not familiar with the dynamics of the pharmaceutical industry which are clearly very different from the medical technology sector but some parallels are clear. If businesses have no confidence that they can make a return on investment in new and innovative products because the market does not value these or has mechanisms designed to strip the price to a bare minimum, then the investment will not be forthcoming and the pace of innovation will slow to a crawl.

Innovation has already delivered huge value. Over the last 20 years, hospital stay times have reduced by 50% in most parts of Europe. Most of that has been enabled by new technology. Without it we would need double the number of fully staffed hospital beds that we have now. That is a very large number indeed. Similarly life expectancy at birth has extended by 4 years in the same period. Using the UK yard stick for evaluating new drugs, technologies and procedures, the QALY (Quality Adjusted Life Year), each extra year is worth something between €25,000 and €35,000. So collectively, over the last 20 years, we have added a huge number in terms of value to the population of Europe. I cannot do the sums because the number is too large. Of course, not all of this value can be ascribed to innovations in medical technology but a very large part can be. Much of what we do today to diagnose and treat patients involves vital technologies in the chain of events.

We must be careful not to ‘throw the baby out with the bathwater’ and ensure that the conditions continue to exist in Europe that will allow innovators to continue to deliver the huge value that they have provided before. The wall of demand arising out of the ageing of society can only be addressed by very different approaches to deploying resources. Shredding incentives for the innovators that will enable further change is not the answer and a better appreciation of where the costs lie and what can be done to redistribute them more effectively will be key.

– John Wilkinson, Eucomed Chief Executive

The comments are closed.