Legemiddelindustrien

Policy document
Business development in Norway

• Norway must institute broad-based government investment in the medical industry that considers the value chain of the entire industry, from research to patient ("the sixth investment area").
• Biomedicine can be an important growth industry for Norway, and a means of responding to the great social challenges we face in the years ahead.
• New, innovative medicinal products that are found to be cost-effective for society must be introduced and made available to patients.
• There is a need for incentives to encourage greater commercialisation of medical research and cooperation on research and business development between the industry, the regional health authorities, the universities and the TTOs.
• There is a need for long-term capital that is earmarked for the healthcare industry and takes account of the long development course of new medicinal products. This entails new seed capital and an adjustment of Investinor's mandate.
• Funding schemes through the Research Council of Norway and Innovation Norway must be geared to manufacturing and the long-term research and development needs of the industry.
• It must be attractive for the global pharmaceutical industry to invest in research and development projects in Norway.
• The groundwork must be laid for framework conditions that take account of the fact that a biomedical industry is global from the start.

Vision
The industry shall:

• make valuable contributions to GDP, export revenues and jobs
• be a significant manufacturing industry
• further develop important expertise and innovation in Norway
• be of benefit to Norwegian patients, and contribute to solutions to major social challenges
• help to ensure that the community benefits from the substantial government research investment in medicine
• ensure that Norway is involved in the next economic and technological advance - the "bioeconomy".
• contribute to Norway attaining its national research target of 3% of GDP.

The healthcare industry as Norway's sixth investment area - an integrated strategy
Biomedicine constitutes a substantial part of the Norwegian healthcare industry. Biomedicine (biological and pharmaceutical development) is a knowledge-based industry which through research and innovation achieves medical advances that benefit the entire healthcare service. The industry can contribute to meet healthcare challenges in Norway as well as those facing many countries in the world, and at the same time contribute to wealth creation and important export revenues for Norway and the establishment of new jobs.

Many countries have recognised the potential in biomedicine and have established or are establishing national healthcare investment programmes. A similar concerted Norwegian effort is required if we are to remain competitive.

Today's many different initiatives (National Strategy for Biotechnology, the Research Council's new biotechnology programme, the National Healthcare plan, Innomed, the research and innovation strategies of the regional health authorities etc.) will benefit from overarching coordination. Government involvement in the industry will also be an important signal to private investors to inject private capital into an industry with a growing need for funding in the years ahead.

Basis for biomedical business development in Norway
Norway is well positioned to succeed in biomedicine because:

• biomedicine is Norway's strongest field of research. Almost 60% of all publications are in the fields of medicine/health/natural science
• a vigorous new growth of small, high-potential biomedical companies has been nurtured into being, organised through focused clusters and organisations (including the Oslo Cancer Cluster, Nansen Neuroscience Network, Oslo Medtech, Biotekforum, LMI, Inven2, etc.)
• a steadily increasing share of research and wealth creation takes place in small, young companies. The large multinationals base their R&D activities on alliances with small companies and thereby provide a market for the latter.
• the global pharmaceutical industry established in Norway contributes cutting-edge expertise in product development as well as business development, resources and expertise for clinical research, access to international networks and access to innovative medicinal products
• a pharmaceutical industry with manufacturing is established in Norway. This is a source of very important expertise for start-up businesses wanting to manufacture in Norway.
• we have unique medical registers and biobanks (the Cancer Register, HUNT, etc.) and proximity to natural resources (marine research, bioprospecting).

Commercialisation of pharmaceutical research and making new, innovative drugs available
A broad-based government strategy in which healthcare policy underpins key industrial policy objectives is needed to release the potential of the Norwegian biomedical industry. The government must use its policy on medicinal products to reward innovation in the field of pharmaceuticals by rapidly employing and making available to patients new and innovative medicinal products that are found to be cost-effective for society.

Incentives must be established to encourage greater commercialisation of medical research. Patenting and investigative pharmaceuticals research must be a source of qualifying credits and be rewarded in the same way as other research. It is also necessary to establish a fruitful research and business development collaboration between the industry, the regional health authorities, the universities and the TTOs. An expansion of 'Skattefunn', the tax relief scheme for research and development, and other tax incentives that benefit the community will encourage private investment in R&D-intensive business development. It must also be more attractive for the global pharmaceutical industry to invest in research and development projects in Norway and to form partnerships with Norwegian start-up companies.

Need for long-term capital
A whole generation of promising start-up companies is now being hit by a drying up of capital. In practice, important parts of the government policy implementation system are not reaching the industry. At the same time, unrest in the capital market makes it very demanding to raise private long-term risk capital.

The course of research and development of medicinal products is very long and capital-intensive. The industry is dependent for its development on long-term risk capital. It is crucial that the industry itself contribute to educating potential investors about the industry, but part-financing by the government will be very important for attracting the necessary competent private capital. Consequently, the current government investment funds should be reviewed and adapted to the long-term development phase of the industry.

Biomedicine should be included as a specific investment area in Investinor's mandate. This would enable the fund to build up the necessary internal expertise. New seed capital is required urgently, and funds should be earmarked to ensure that they are transferred to the medical industry.

The government policy implementation system and programmes
The government policy implementation system and funding schemes must be geared to manufacturing and the industry's long-term research and development needs. This means that the Research Council of Norway and Innovation Norway must take into account the distinctive nature of the industry and gear its programmes and allocation criteria so as to give high priority to commercial business development. It is important that these systems have continuity and predictability, so that vulnerable start-up companies do not suffer.