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Workshop ”InDeCS-H: Development of Healthcare Biotechnology SMEs“ 10 th September 2009 Budapest

Workshop ”InDeCS-H: Development of Healthcare Biotechnology SMEs“ 10 th September 2009 Budapest Strategy for Hungarian pharmaceutical and biotechnology industry András BAKÁCS Head of Department Department for Knowledge Economy Ministry for National Development and Economy. Background.

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Workshop ”InDeCS-H: Development of Healthcare Biotechnology SMEs“ 10 th September 2009 Budapest

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  1. Workshop ”InDeCS-H: Development of Healthcare Biotechnology SMEs“ 10th September 2009 Budapest Strategy for Hungarian pharmaceutical and biotechnology industry András BAKÁCS Head of Department Department for Knowledge Economy Ministry for National Development and Economy

  2. Background • August 2008: new concept in the Hungarian development policy: sector specific industrial and innovation policy programmes shall be prepared • October 2008: the financial and economic crisis further emphasized the need for sector specific development policy

  3. Priority sectors • Priority sectors chosen by the Government: • ICT, • pharmaceutical industry and biotechnology, • automotive industry, • logistics, • Why these sectors? • knowledge-intensive • high growth and value added capacity • contribution to the competitiveness of the economy

  4. Strategy and Action Plan • The Pharmaceutical and Biotechnology Action Plan was adopted by the Government on 8th July 2009 • The Action Plan is based on the main findings of two preparatory studies prepared by KPMG and HBA • The Action Plan focuses on healthcare biotech

  5. Relation between pharmaceuticals and biotechnology Hungarian red biotech sector Hungarian Pharma Industry Mostly private SMEs, less than 25-50 employees Young sector: All companies established after 1990, most of them after 2000 Hungarian ownership Rapid growth, acquisitions High risk, slow return original R&D activity Most of the turnover comes from global markets, B2B relation, from services Major problems are related to R&D, enterprise development, accessing international markets Some large companies, registered on the stock exchange Traditional: Companies established before 1990, some of them before world war I Multinational owners Organic growth Low risk, generic R&D activity Most of the turnover comes from domestic and neighbouring markets, B2C relation, from products Major problems are related to consumption and sale, costs and profits in relation to pricing and reimbursement system Source: Convincive Consulting, 2008

  6. Pharmaceutical industry in Hungary • 100 years expertise • 75% of turnover from exports, 15 000 employees • 53% of the complete turnover produced by the 10 largest companies

  7. Goals • General objectives: • To provide favourable regulatory and development policy environment in order to increase the competitiveness of pharma and biotech companies in Hungary • Specific objectives of the Action Plan: • To promote the restructuring of Hungarian pharma industry according to international trends, building on the advantages of domestic biotech sector • To enhance the role of biotechnology in pharmaceutical innovation and to increase the number of international R&D centers based on domestic knowledge • To promote university industrial relations, mobility, human resources, knowledge transfer • To enhance the role of biotech sector in accessing markets for domestic pharmaceutical research

  8. Pillar I: R&D • Taking into account the specific features of pharma and biotech industry in resource allocation • Enhancing the increase of R&D expenditures by tax regulation • Promoting access to finance of biotech SMEs • Introducing Young Innovative Company (YIC) status in Hungary • Streamlining the incubator programmes • Promotion of life sciences and scientific studies to young people • Providing the necessary human resource supply for pharma and biotech R&D by education and attracting experts working abroad • Better exploitation of clinical R&D

  9. Pillar II:Production • Promoting pharma and biotech investments in Hungary by active marketing and investment promotion programs • Providing the necessary human resource supply for pharma and biotech R&D by education and attracting experts and sector managers working abroad

  10. Pillar III: Regulatory environment • Reconsidering of the sector-specific regulatory environment, analysis of tax and legal burdens on pharma industry and biotech companies from the competitiveness point of view and harmonise them with the practice of neighbouring countries • Accelerating the drug registration process

  11. Conclusions The first year of governmental industrial policy has significant results: • The government and the industry have started an active cooperation, • A R&D related tax allowance will be introduced next year: 20% in 2010 and 100% in 2011

  12. Thank you for your kind attention! andras.bakacs@nfgm.gov.hu

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