COMMISSION STAFF WORKING DOCUMENT Executive summary of the impact assessment accompanying the document Proposal for a COUNCIL REGULATION on the Innovative Medicines Initiative 2 Joint Undertaking
Date: 2013-07-10
Institutions: European Commission
Subjects: EU programme, European Joint Undertaking, innovation, pharmaceutical industry, public-private partnership













EUR-Lex - 52013SC0246 - EN











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52013SC0246

COMMISSION STAFF WORKING DOCUMENT Executive summary of the impact assessment accompanying the document Proposal for a COUNCIL REGULATION on the Innovative Medicines Initiative 2 Joint Undertaking /* SWD/2013/0246 final */









COMMISSION STAFF WORKING
DOCUMENT
EXECUTIVE SUMMARY OF THE
IMPACT ASSESSMENT
accompanying the
document
Proposal for a
COUNCIL REGULATION
on the Innovative
Medicines Initiative 2 Joint Undertaking
This document summarises the impact assessment
for the Joint Technology Initiative (JTI) on innovative medicines (IMI),
established as a joint undertaking under the 7th Research Framework Programme.
The proposal has been produced in the context of the Union’s Multiannual
Financial Framework (2014-2020), and will contribute to the implementation of
the next EU Framework Programme for Research and Innovation, Horizon 2020.

1. Problem Definition
1.1. 
 The problem that requires action

An
ageing population increases the burden of chronic and degenerative diseases, putting
additional pressure on health and care systems at a time of stretched public
finances. Effective measures represent a significant part of the solution. However,
the role of research and development (R&D) in developing therapies is
declining, incentives for some classes of therapy (e.g. antibiotics) are all
but absent and structural issues stand in the way of multidisciplinary cooperation,
required to solve complex scientific problems that are characteristic of this
field. Failure to act is neither in the interest of European public health nor
of European competitiveness.
The
process of developing therapies is costly, involving many tests before
marketing approval can be given. These tests often demonstrate that the therapy
in question is unsuitable and thus the investment is lost. This creates an
incentive for manufacturers to invest in developing therapies which have a greater
chance of success, either because they resemble existing therapies or because
the potential return is very high. While this is a sensible business decision,
it is not necessarily in the general interest of the EU citizen.

1.2.    Key
problem drivers

The
relatively low investment in the biotechnology sector (vis-à-vis competitor regions) combined with
the fragmented, closed innovation model of drug development in Europe and the complexity of the process act as a disincentive to risk taking by industry. The
nature of the scientific challenges is such that data must be shared among
various stakeholders. Without a framework enabling this to happen in a
controlled environment, cooperation will not take place.

1.3.    Need
for public intervention

A
controlled environment will not evolve naturally in the commercial environment,
nor can it be achieved by the public sector alone. It can only come about
through public cooperation, where the various players (academia, industry,
SMEs, clinicians, regulators and patients) share resources, data and expertise,
while ensuring that the fruits of their collaboration are shared, risks and costs
reduced and productivity increased. The creation of such a risk-sharing
environment will reduce the failure rate and those carrying out tests will have
a greater incentive to test a wider variety of therapies to the benefit of all
concerned, both in terms of promoting public health and legitimately protecting
commercial interests.

1.4.    The
EU’s right to act and the application of the subsidiarity principle

The
right of the EU to act in this field is provided under Article 187 of the Treaty
on the Functioning of the EU, authorising the setting up of ‘joint undertakings or any other structure necessary for
the efficient execution of Union research, technological development and
demonstration programmes’.

1.4.1. The required public
intervention can only be provided at European level

Measures
at EU level to support trans-national and cross-sector cooperation between
firms on strategic research agendas will help to establish ‘critical mass’, in
particular through joint agenda setting, mobilisation of additional funding and
increased leverage on industrial R&D investment.

1.4.2.
Investing at EU level can produce savings in healthcare costs and services

The
research programme will lead to a better classification of diseases,
significantly improving diagnoses and treatments. This will prevent patients’
unnecessary exposure to the adverse effects of ineffective treatments during
clinical development or medical practice. In the latter case, savings have been
achieved by discontinuing an ineffective or
inappropriate treatment. For example, an analysis carried out in France has demonstrated the monetary benefit of molecular diagnosis of cancer patients. Investing
€ 1.7 million in molecular diagnosis has resulted in savings of € 34
million by not administering the cancer drug Iressa® to patients for whom it is
ineffective. Even bigger savings can be expected from the classification of
chronic diseases.

1.5.    The
achievements of the current IMI

The IMI Joint Undertaking has produced a
number of important results:
·          
considerable
leverage effect on industrial R&D investment by virtue of a € 1 bn
contribution from the European Commission and a contribution in kind of € 1 bn
from the European Federation of Pharmaceutical Industries and Associations
(EFPIA);
·         
enhanced cooperation — the IMI Joint Undertaking
brings together large-scale industry, SMEs and research organisations from across
the European Union;
·         
joint production of comprehensive strategic
research agendas and coordination of other policies due to the involvement of
patient organisations and regulatory bodies;
·         
an open innovation model — the IMI Joint
Undertaking has contributed to the transition from a closed to an open model of
innovation in biomedical and pharmaceutical research.

1.6.    The lessons learnt
from IMI

Despite
these achievements, the implementation of IMI and the 2011 interim evaluation have
revealed a number of shortcomings:
·         
the legal instruments used for setting up the
JTIs, and in particular their status as Union bodies, need to be made more flexible;
·         
the participation rules applied to/by JTI joint
undertakings, in reflecting the needs of the various partners, add to the complexity
of the initiative;
·         
monitoring and evaluating achievement of the
targets included in the strategic research agenda and technical work plans need
to be improved;
·         
horizontal policy coordination needs to be
strengthened (e.g. the advisory potential of the European Medicines Agency
(EMA) should be fully exploited);
·         
internal and external communication needs to be
strengthened.
The
shortcomings identified stem from the initial design and constitute a starting
point for improving the design of the IMI Joint Undertaking, under Horizon 2020.
2. Objectives
The
general and specific objectives that have been identified are based on the
outcomes of the public consultation, the problems and drivers and the
achievements and lessons learnt from IMI.

2.1. Overall
objectives

The overall
objective is to improve European citizens´ health and wellbeing by providing
new and more effective diagnostics and treatments while helping safeguard the
future international competitiveness of the European biopharmaceutical and life
science industries such as diagnostics, vaccines, biomedical imaging and
medical information technologies. The IMi2 Joint Undertaking will implement
Horizon 2020 objectives, in particular as defined in the Health, demographic
change and wellbeing societal challenge, and will address the public health
challenges identified in the World Health Organisation report on priority
medicines for Europe and the World.

2.2. Operational objectives

The operational
objectives of this initiative are to:
·       
provide structures that facilitate partnerships
along the entire life science research and innovation cycle, such as from early
discovery to product development, to pharmacovigilance research and
surveillance, in an effective innovation-driven collaborative setting that is
focused on optimising life sciences research and innovation for diagnostics,
prevention and therapeutic agents and approaches, and support for the
development of evidence-based regulation;
·       
establish networks for open innovation along the
whole innovation cycle of novel medical research and technologies, bringing
public research institutions, academia, life science industries, SMEs, patient
organisations, regulators, payers, public health authorities and the animal
health sector;
·       
reduce the fragmentation of research and
innovation and increase the level of private-sector spending in Europe;
·       
develop and implement strategic agenda setting
in a pan-European structure with the necessary critical mass and budget,
ensuring continuity and allowing life science industries to make long term
investment plans;
·       
facilitate research that provides evidence
earlier in the drug and vaccine development process through risk-sharing
mechanisms.
2.3. Specific objectives
The
specificl objectives are to:
·         
improve by 2020 the success rate in clinical
trials by 30 % in diseases identified in the ‘Priority Medicines for Europe and the World WHO Report’;
·         
reduce to five years the time taken to reach
clinical proof of concept in immunological, respiratory, neurological and
neurodegenerative diseases;
·         
develop at least two new therapies for diseases
for which there is a high, unmet need and limited market incentives:
antimicrobial resistance (two new classes in the past 30 years) or Alzheimer’s
disease (only two treatments of limited efficacy have ever been developed);
·         
develop diagnostic markers for four diseases
(among those mentioned above), clearly linked to clinical relevance and
approved by regulators;
·         
develop a transparent and comprehensive
infrastructure model to gather data on disease incidence and the  medico- and
socio-economic burden of major infectious diseases;
·         
develop tested novel biomarkers to predict
vaccine efficacy and safety (two markers each) early on in the process, to
improve multiple-candidate screening to achieve a 50 % reduction in the
failure rate in phase III clinical trials;
·         
develop two novel adjuvants for human use to
increase the body’s immune response to vaccines, boosting in particular
reaction in specific target groups such as the elderly and non-responders;
·         
identify, for two major infectious diseases and two
types of cancer or chronic disorder (e.g. autoimmune diseases), at least: two
novel predictive models for efficacy and two novel predictive models for safety;

·         
strengthen the link between human and veterinary
vaccine research.

3. Policy Options

The impact assessment considered four main
policy options:
1.       
Business-as-usual:
continuation of the current IMI JTI under Horizon 2020, managed by the Joint
Undertaking. Under this option, IMI remains focused on building a collaborative
system for biomedical R&D in Europe and speeding up the development of
effective and safer medicines for patients.
2.       
No
public-private partnership (PPP) or ‘zero option’: use of Horizon 2020
collaborative projects only. This option facilitates the formulation of common
objectives at project level but does not accommodate the formulation of cross-project
execution of strategic agendas. Industry participation takes place on a
project-by-project basis.
3.       
Contractual
PPP to implement Horizon 2020 actions falling under the ‘Health, demographic
change and wellbeing’ societal challenge. Under this option, an industry
partnership agreement is concluded and industry proposes a strategy and advises
on work programmes. Whilst EU commitment and contribution is set at the launch
of PPP, financing amounts and topics are subject to approval under an annual
work programme.
4.       
Modernised
JTI: expands the objectives and activities of the IMI Joint Undertaking in line
with Horizon 2020 objectives; broadens the scope of the current programme and
improves its governance.

4. Assessment
of Impacts and Comparison of Options

The
four policy options were compared on a range of key parameters, assessing
public involvement in life sciences research and innovation.
The
outcome of this comparison is that the ‘Modernised JTI’ option is the preferred
option. It achieves critical mass at programme and project level; fosters
scientific excellence in biopharmaceutical and life science research, which
impacts on innovation and is enhanced through financial support from scientific
ideas to the market, a stronger output orientation and better dissemination of
research results; greater scientific and innovation impact translates into
larger downstream economic, competitiveness, social and public health impacts; and
allows for more flexibility and reduced administrative costs for applicants and
participants, and publically funded entities, such as academic and SMEs,
benefit from administrative simplification. This option also
maximises cost-effectiveness.
The case of the ‘zero option’ makes the formulation
of cross-project execution of strategic agendas difficult. Critical mass
is compromised and the level of flexibility, accessibility and broader
horizontal policy coordination is lower than with the ‘Modernised JTI’ option.
This would translate into smaller economic, competitiveness, social and public
health impacts.
The ‘Contractual PPP’ option accommodates the formulation
of cross-project execution of strategic agendas, but it constitutes a ‘light’
approach to a public-private partnership, with an indicative budget only and a rather
limited commitment from industry.
Summary
comparison of options (impact compared with the BAU scenario)
   || No PPP || PPP || Modernised JTI 
 Public health impacts || -- || - || +++ 
 Social impacts || -- || - || ++ 
 Economic and competitiveness impacts || - || - || ++ 
 Innovation impacts || -- || - || ++ 
 Critical mass of resources || -- || - || + 
 Leverage effect (overall R&I resource mobilisation) || -- || - || = 
 Participation of industry and SMEs || -- || - || ++ 
 Strategic agenda || -- || - || + 
 Addressing fragmentation || - || - || ++ 
 Administrative cost and efficiency of governance || - || -- || = 
 Coherence || = || = || ++ 
 Efficiency || -- || = || ++ 
 Effectiveness || -- || = || ++ 

5. Monitoring And
Evaluation

An appropriate monitoring and evaluation system
set up at programme and project level, including a set of approved key
performance indicators, will enable an assessment to be made of whether the IMI2
Joint Undertaking is achieving its objectives, with the Governing
Board overseeing the work of the Executive Director and the Programme Office. 
The external evaluation for the entire programme
will be organised by the Commission. An interim evaluation will be carried out
before the end of 2017 and a final evaluation after the conclusion of the
programme in 2024.