Lessons from the World’s Largest Biopharma Gathering

Lessons from the World’s Largest Biopharma Gathering

By Joe Damond, Global Chair, Health, Edelman Global Advisory

I recently returned from the Biotechnology Innovation Organization (BIO) 2023 International Convention, held June 5–8 in Boston, Massachusetts, with one key takeaway: Investment and innovation will surge in emerging market countries that build strong biopharma ecosystems—when policies match aspirations.

The BIO International Convention is known in biopharma industry circles as the “Davos of Drugs”—and for good reason. This year more than 19,000 executives and researchers from small and large global biotech and biopharmaceutical companies, policymakers, officials, and investors participated from more than 60 countries, and more than 55,000 formal partnering meetings were scheduled during the four-day conference. These BIO participants are on the lookout for the next big thing in medicine. They come with the capital, scientific expertise, manufacturing muscle, and commercial acumen to ferret out the most promising leads—and they are there to make deals that expand the ever-growing global biopharma ecosystem.

More than 30 countries were represented by official stands or pavilions, and dozens of states, provinces, and cities were present to make their case why innovators and investors should choose their location above all others. We can categorize these countries into two broad groups: the P-20 and the emerging markets.

The P-20 Dominates the Biopharma Landscape

The Pharmaceutical 20, or “P-20,” comprises the established, mature competitors in life sciences and innovative biopharmaceuticals. Led by the United States, Europe, and Japan, these 20 countries garner roughly 80% of the annual global investment in researching, discovering, developing, and manufacturing innovative vaccines and medicines such that most significant new medicines and vaccines—the game-changers in human health—originate in the P-20. They also capture the lion’s share of the estimated $150-175 billion that the private sector pours each year into making and marketing the next big thing in medicine and biologicals—half of which comes from the US alone.

For the rest of the world, the pickings are slimmer, with 180 or so other countries competing for the remaining 20% of global private investment. But among them are proverbial new kids on the block, a scrappy second group of countries—including Vietnam and a growing contingent from the Gulf region of the Middle East—that are making an enticing case for a closer look from investors and innovators.

Emerging Markets—and Opportunities—for Biopharma Investors and Innovators

At BIO, these emerging market countries signaled that they are interested and increasingly capable of creating attractive ecosystems where research and development can flourish, manufacturing can be done efficiently to the highest standards, and they can serve as new logistics, supply, and administrative hubs. National and provincial leaderships posture as agile, creative, and willing to collaborate with the private sector. Countries are also learning to value and foster the small startups that originate over 70% of all the new products approved by the US Food and Drug Administration and other global regulators.

This last point—the can-do, pro-business attitude—is notable for how it contrasts with the more traditional, less flexible stance toward the sector that some countries take. Even some leaders in the P-20 have been slow to adapt to the new realities of an increasingly competitive global marketplace, slipping into policy-making complacency after past successes. In the post-COVID era, many leading economies are resorting to short-term cost-containment strategies that could restrict access to new healthcare technologies and undermine incentives to invest in R&D. The result is opportunity for these emerging countries to rise into the P-20, compete for a greater share of the prize, and contribute more significantly to global health.

The aspirations are there. A refreshing sincerity and seriousness pervade both within these emerging markets and at BIO. There are challenges, however, and it is how these aspiring countries tackle the challenges and transform them into opportunities that will determine how fast and far they will rise.

What biopharma ecosystems are made of

Discussions with policymakers and officials at BIO 2023 ranged across topics that can be categorized as “hardware” or “software.” Many new competitors in the field focus on the hardware, or infrastructure, such as new investments in airports, highways, power grids, free zones, or areas designated as a “biopolis.” Almost every country competing in the sector offers some or a combination of these important hardware elements.

But to investors and innovators, the “software” on offer is often more critical. In a biopharmaceutical sector that is highly regulated, capital and science-intensive, and innovation-driven, it is a country’s laws, regulations, policies, and practices that shape its ecosystem and can make or break its global competitiveness. Countries that prioritize high intellectual property standards, pricing and reimbursement policies that recognize and reward innovation, flexible labor laws, and taxation that incentivizes innovation—and can shape these into a coherent, consistent package—will compete more effectively and rise more quickly than countries with hardware but no highly attractive operating system.

And then, underpinning the emerging countries that are moving fastest, there is another essential pillar—a kind of secret sauce: their leadership’s willingness to sit down with the private sector as genuine partners. The most sophisticated of them take an “all of government approach” that sees biopharma products not simply from the perspective of a consumer or payor, but from the point-of-view of a potential developer and innovator. In some countries we see a willingness to formalize the relationship, sometimes in the form of an industry-government advisory council to inform a vision, strategy, and policy roadmap. We also see a willingness to work together to solve common issues and seize opportunities, such as using digital technologies and other means to provide more equitable access and improved health care.

What it means for businesses

Businesses may have new opportunities to tap into aspirational countries that are emerging in the biopharma ecosystem:

• Opportunities may exist where companies least expect them. The global ecosystem is changing fast and, while some environments are becoming more challenging, new prospects are emerging.
• The swath and scope of potential global partners with advanced technologies and new services is growing, and worth exploring in greater depth.
• Government officials are often under-informed about the dynamic, transformative nature of innovation and new technologies in this sector, especially with respect to advanced technologies such as gene and cell therapies and gene editing.
• Many national health care systems and local pharma industries are unprepared for the coming disruptions that these changes will bring and the challenges and opportunities they will present. Business leaders need to prepare policymakers to proactively anticipate and adjust to such changes.
• Companies can also help policymakers and governments better understand the policies that drive investment and innovation.