Measuring the “innovation footprint“ of the industrial healthcare industry

July 03, 2017

Using the pharmaceutical company Novartis as an example, Fraunhofer ISI has examined the contributions a multinational company makes to the innovation process in Germany. The study focused on the impacts of innovation on key areas such as the health system, education and research, infrastructure as well as industry and politics.

Research-based industry plays a key role in innovation. It can meet demand for innovative solutions quickly and can give important impulses for the innovation system. This applies in particular to companies in the research-intensive healthcare industry. But what is the influence of a single company on an innovation system? And what effects do the innovation activities of a pharmaceutical company have?

In order to find answers to these questions, the Fraunhofer Institute for Systems and Innovation Research ISI developed a new methodological approach and applied it for the first time in the study “Innovation impacts of the industrial health industry - the example of Novartis“. Fraunhofer ISI investigated on behalf of the pharmaceutical company, what its contributions are to the German innovation system. This “innovation footprint“ generates an overall picture of Novartis’ innovation impacts on the basis of a comprehensive understanding of innovation: In order to capture the different innovation activities, they were clustered into fields of innovation and the innovation effects were then identified with the aid of established innovation indicators and qualitative approaches.

The study shows that Novartis is closely connected to the German education and research system. As a result of research projects funded by Novartis Germany, this often leads to joint publications with scientific institutions or publications authored solely by Novartis. Here clinical research takes on a special role: Roughly 40 percent of publications sponsored by Novartis are in the field of clinical research. For the company’s own publications, it is about a quarter. In the medical sector, basic research accounts for a quarter of the publications by Novartis. Also clinical research and especially university hospitals benefit from clinical Novartis studies because they improve their research infrastructure (for example by establishing coordination offices for clinical research or dedicated study teams)  as well  as the quality of research overall (for example through certified study centers).

Further positive effects are generated through measures and events to exchange knowledge, to network and for training and further education. In this context the establishment of regional cooperation networks can be mentioned, in which the German Novartis locations play an important role. Innovations developed in these networks range from product innovations, new combinations of existing components (Rudolstadt/Thuringia), process innovations by introducing robotic systems (Wehr/Baden Wuerttemberg) to innovative forms of organization for the cooperation between creative SMEs and large companies (Teltow/Brandenburg).

Doctors on the other hand benefit from the accreditation of innovative, and in the case of Biosimilars also comparatively cheap, medication and therapeutic approaches to treat their patients. They are already involved in clinical trials prior to market approval and can gain experience with promising substances early on. This is particularly relevant as in addition to university hospitals numerous non-university hospitals all over Germany are involved in such trials. Additionally, socio economic studies commissioned by Novartis make important information on (follow-on) costs and benefits of therapies available to ministries and actors in the health system.

Patients also benefit directly from innovation activities. New substances and therapeutic approaches aim to improve their health and/or quality of life. Participating in clinical studies by Novartis facilitates early access to such new substances and therapies. Also collaboration between patients Novartis outside of clinical trials can result in major improvements: At the location of Rudolstadt for example, a new inhaler design was developed. It makes the use for patients much simpler, which in turn leads to a better therapeutic effect.

The study also looked at concrete impacts of individual aspects on the overall health system. Using the example of Biosimilars it can be shown that ultimately entire health systems can benefit from innovation activities: The Novartis subsidiary Sandoz was the first company to introduce a Biosimilar product onto the market and in the run-up supported the development of guidelines for a European accreditation procedure for Biosimilars. This European accreditation procedure was the blueprint for the development of respective guidelines in other countries. In the meantime, Biosimilars were accredited by different suppliers in Europe, the USA and other countries. The use of more cost-effective Biosimilars could have a long-term positive effect on expenditures on pharmaceuticals in the German health system.

Dr. Thomas Reiss, head of the Competence Center New Technologies at Fraunhofer ISI, coordinated the study for Novartis and summarizes the findings, “Our analysis shows that the innovation footprint of Novartis extends far beyond the pharmaceutical industry. Not only important sectors of the national innovation system benefit from cooperations with Novartis, but above all regional innovation centers, which gain advantages from the resulting learning processes.“ Reiss also points out that the new concept of the innovation footprint focuses on positive innovation impacts, possible negative effects of the innovation activities are not included.

Professor Marion A. Weissenberger-Eibl, director of Fraunhofer ISI, explains, “Such a concept as it was used in this study can be continually adapted and used for example for regular innovation monitoring. I could therefore imagine applying it also to innovation benchmarking which allows cross sectoral and interdisciplinary comparisons regarding innovation performance.“

The Fraunhofer Institute for Systems and Innovation Research ISI analyzes the origins and impacts of innovations. We research the short- and long-term developments of innovation processes and the impacts of new technologies and services on society. On this basis, we are able to provide our clients from industry, politics and science with recommendations for action and perspectives for key decisions. Our expertise is founded on our scientific competence as well as an interdisciplinary and systemic research approach.