We Are Resilient is the webinar organized by Presans to address current issues of industrial resilience. In this second episode, we address the question of the future of the pharmaceutical sector, taking as a starting point the inadequacy of the supply of active ingredients in France, revealed by the Covid-19 crisis. The speakers of this webinar come from academic, industrial, and entrepreneurial backgrounds, allowing for complementary and highly informative insights:
- Bernard Meunier, chemist, Emeritus Director of Research at the CNRS, former President of the Academy of Sciences, former President of the CNRS, and scientific advisor to Seqens;
- Gérard Guillamot, Scientific Director of Seqens; former R&D Director of PCAS, he began his career at Merrell Dow Pharma, then Schwartz Pharma, PCAS, Seqens;
- Maya Said received her Ph.D. in Science from MIT in Computer Science and Biological Systems. She is currently CEO of Outcomes4Me and Independent Director of the French biotech company Transgene and the US biotech company Pieris Pharmaceuticals. She was Senior Vice President Global Head of Oncology Policy and Market Access at Novartis, and Vice President, Global R&D, Strategy, Science Policy and External Innovation at Sanofi and Principal at the Boston Consulting Group (BCG);
- Jean-Marc Paris, former Director of Research at Rhodia and currently a Fellow Presans, specializing in chemistry.
Why take an interest in the future of the pharmaceutical industry through the case of Seqens?
Seqens is a pharmaceutical chemistry company with industrial chemistry capabilities located in France. This situation is the result of a development strategy that is the opposite of that of most other pharmaceutical and specialty chemical groups. This webinar provides an understanding of the factors that have driven what is proving to be a remarkable industrial success story.
04:02: The evolution of the pharmaceutical sector over the last 40 years; the impact of molecular biology and genetics on a sector traditionally based on chemistry and biochemistry; the contrast between the evolution in the USA and the evolution in France and Germany ;
05:32: the Covid-19 crisis reveals the harmful consequences of this evolution through the disruption of drug supply;
07:45: The difficulties of supply of active ingredients have existed for 20 years in pharmacies in France;
09:17: the history of Seqens, a chemical company;
18:14: human, organizational and ecological resilience;
21:00: a review of the historical context of the pharmaceutical sector: consolidation, globalization, intellectual property; public-private partnerships;
25:58: A look back at generic drugs;
27:54: a systemic flaw in the cost-cutting strategy;
30:55: equation for relocating the pharmaceutical industry to Europe;
31:53: questions focusing on the changes to be implemented (what to do?);
34:11: strengthening the chemical education system;
35:44: inertia to be overcome;
36:42: repatriation of talent;
37:44: an example of success and attractiveness: the University of Strasbourg;
39:10: the attractiveness of France and Europe; Lyon’s ecosystem;
40:07: heterogeneity of health systems; the different components of a public-private partnership system;
41:21: American example of partnerships around the NIH and the BARDA; the case of China; the case of Europe and France; argument in favor of the establishment of a Ministry of Industry within the French government to overcome the current situation, with a Minister who himself comes from the industry;
48:33: the role of foundations in therapeutic innovation; 1800 foundations in the USA including Bill & Melinda Gates;
51:06: France must reject the concept of a post-industrial society;
52:01: evolution of French hospitals; reactivity to the Covid crisis19 ;
53:51: return on industrial equilibrium; possibilities opened by new methodologies (flow chemistry) and by progress in chemistry; case of vanillin;
57:02: Wouldn’t the logic of profitability be enough to encourage relocation of industrial activities in the pharmaceutical sector; the need for capital; reduction of the differences in labor costs with China; the French government must reduce the pressure on productive capital and labor costs;
59:30: the difference between France and Germany;
59:53: the investment decision in a globalized world; the stability factor; Switzerland’s success;
63:05: the importance of the issue of innovation in the field of care; possibilities of telemedicine and big data;
64:45: the importance of chemical drugs is underestimated;
65:40: Chemistry must stop being frowned upon;
67:36: Need a Minister of State for Industry;
69:00: the importance of industrial synergies.
My four takeaways
Those involved in the relocation of industrial activities
The relocation of industrial activities requires a cooperative balance between the following actors :
- Health systems, including regulatory authorities;
- Training and research institutions;
- Industrial companies;
- Research foundations;
- Public authorities;
- Citizen organizations, especially local ones.
Each actor on this list is organized and has an awareness of its objective. All of them are mentioned in the webinar. The national and European factor should be added, as it would make it possible to envisage a balance based on the common good. It is up to the political system to achieve coordination around such a balance.
The industrial relocation equation
The case of Seqens suggests that the industrial factors that allow the development of a profitable activity are the following:
- Process innovation;
- Incremental product innovation;
- Global marketing to find outlets at appropriate volume levels (e.g. the North American market);
- Human, organizational and ecological resilience;
- Career attractiveness.
However, the industry is only one component of the relocation equation. Profitability depends on factors that also depend on the other players in the relocation process:
- Health systems have to make a trade-off between minimizing drug costs and innovation, and supply resilience; they also have to reduce the burden of administrative management on operational staff, especially in hospitals;
- Training and research institutions must increase the weight of scientific teaching to train the engineers and technicians that the relocation of industrial activities requires;
- Research foundations must be able to benefit from an adapted fiscal framework;
- Public authorities must rely on centers of academic and industrial excellence; they must reduce the pressure on industrial activity (tax burdens on productive capital and labor); public procurement, public capital, as well as competition and environmental law, are other key levers;
- Citizen organizations must integrate the realities of industrial relocation and turn the page on post-industrial society.
The greatest challenge for France is well known. It lies in the blocking power of the rest of the system’s activities by certain actors who, by this means, defend their interests and their position in the current balance. Faced with this reality, companies have in the past tended to opt for an exit strategy, setting up their productive activities elsewhere. The question that is therefore raised is that of cooperation within the system.
Taking into account the political dimension of the challenge
One of the decisive aspects of this future cooperative balance lies in the rebalancing of profiles within the political leadership bodies. The current preponderance of legal and financial profiles seems to lead to largely sub-optimal performance of the system in the long term. This theme was raised by Professor Bernard Meunier, but I note that other voices have been raised for some time now to draw the country’s attention to this point; I am thinking in particular of Pierre Vermeren.
Our participants have given convincing arguments to steer the new cooperative balance towards renewed public-private partnerships, which can find various forms (cooperatives, for example) capable of financing productive investments that will enable relocated industrial activities to be both competitive and resilient.
Launch new synergies between industrial partners, based on technological themes
The industrial players (non-competing) can also take the initiative to pool their resources in order to explore new technological potentials, as well as possible complementarities between applications and sectors of application of these technologies. In the same spirit, Presans organizes Synergy Factories, focusing on future technological themes of interest to a variety of sectors. I strongly encourage our readers working in the industry to show their interest in this type of cooperative approach by filling in this form!