NetherlandsPharma reportMarch 2011

MARCH 2011 FOCUS REPORTS S2

SPONSORED SUPPLEMENT

Country Report

This sponsored supplement was produced by Focus Reports.

Project Director: Elyse DeutscherEditorial Coordinator: Manuel Felipe B. MendozaContributors: Koen Liekens,

Irina Afanassenko & Leonardo Barquero

For exclusive interviews and more info, please log onto or write to contact@focusreports.net

Despite its diminutive size, the Netherlands has historically carried a large weight in the world because of certain cultural endowments: small but united, entrepreneurial, innovative, and externally oriented. During the Dutch

Golden Age, the “Low Country” monopolized international trade and commerce, giving rise to tulip manias, artistic masters, and the world’s first multinational corporation. Though the sun has long set on that era, the historic imprint of the Netherlands’ open mindedness to the world defines its present industrial standing. Today, the pharmaceutical industry looks to the Netherlands for a world-class medical infrastructure, new standards in innovation, and a closely-knit community of stakeholders. Like many countries, the Netherlands will need to adopt new approaches to tackle the increasing challenges of cost-containment pressures and fiscal austerity. But as history has proven, “going Dutch” has come to mean a proactive nature and ambitious attitude that makes no challenge too big.

The Night Watch, Rembrandt van Rijn, Rijksmuseum, Amsterdam

NetherlaNds: Innovation through Collaboration

More spotlights on pharmaceutical markets worldwide at

Value through Innovation

Even after more than a century of experience, we remain intensely curious.

For the sake of future generations.

Boehringer Ingelheim has always remained true to its character as an

independent family-owned company - today, it operates with 142 affiliates

in 50 countries. Research is our driving force. And we equate success as a

pharmaceutical company with the steady introduction of truly innovative

medicines. With more than 41,500 employees worldwide and a track record

build up in nearly 125 years, we are continuously dedicated to improving

the outlook for a healthier life.

www.boehringer-ingelheim.nl

17032 BI adv Aquarium 203x273mm.indd 1 20-12-10 12:17

MARCH 2011 FOCUS REPORTS S2

SPONSORED SUPPLEMENT

Country Report

This sponsored supplement was produced by Focus Reports.

Project Director: Elyse DeutscherEditorial Coordinator: Manuel Felipe B. MendozaContributors: Koen Liekens,

Irina Afanassenko & Leonardo Barquero

For exclusive interviews and more info, please log onto or write to contact@focusreports.net

Despite its diminutive size, the Netherlands has historically carried a large weight in the world because of certain cultural endowments: small but united, entrepreneurial, innovative, and externally oriented. During the Dutch

Golden Age, the “Low Country” monopolized international trade and commerce, giving rise to tulip manias, artistic masters, and the world’s first multinational corporation. Though the sun has long set on that era, the historic imprint of the Netherlands’ open mindedness to the world defines its present industrial standing. Today, the pharmaceutical industry looks to the Netherlands for a world-class medical infrastructure, new standards in innovation, and a closely-knit community of stakeholders. Like many countries, the Netherlands will need to adopt new approaches to tackle the increasing challenges of cost-containment pressures and fiscal austerity. But as history has proven, “going Dutch” has come to mean a proactive nature and ambitious attitude that makes no challenge too big.

The Night Watch, Rembrandt van Rijn, Rijksmuseum, Amsterdam

NetherlaNds: Innovation through Collaboration

More spotlights on pharmaceutical markets worldwide at

Value through Innovation

Even after more than a century of experience, we remain intensely curious.

For the sake of future generations.

Boehringer Ingelheim has always remained true to its character as an

independent family-owned company - today, it operates with 142 affiliates

in 50 countries. Research is our driving force. And we equate success as a

pharmaceutical company with the steady introduction of truly innovative

medicines. With more than 41,500 employees worldwide and a track record

build up in nearly 125 years, we are continuously dedicated to improving

the outlook for a healthier life.

www.boehringer-ingelheim.nl

17032 BI adv Aquarium 203x273mm.indd 1 20-12-10 12:17

Country ReportSPONSORED SUPPLEMENT

S3 FOCUS REPORTS MARCH 2011

SPONSORED SUPPLEMENT

MARCH 2011 FOCUS REPORTS S4

Country Report

Small iS beautifulAt an initial glance the Netherlands might not seem like the most attractive of phar-maceutical markets. Sandwiched in between big brothers France, Germany, and the United Kingdom, a modest population of over 16.5 million Dutch inhabitants hardly drives global growth for multinationals. But it is precisely the assets derived from a small market, mixed with a unique Dutch identity, that makes the Netherlands an ideal desti-nation for international commerce, pharma-ceuticals included.

That the Netherlands is a country literally built on ingenuous innovation goes a long way in explaining the creative flair of the culture. Inhospitable below-sea-level conditions bred infrastructural novelties in the form of iconic windmills and Amsterdam’s dizzying array of canals. Cooperation, collaboration, and coalition-building were essential for survival. Furthermore, the country’s rich history as a trader nation engendered a sharp commercial instinct. Trans-

lated to today’s pharmaceutical industry, inge-nuity, collaboration, and commercial prowess are embodied in a “build, bundle, and benefit” approach—the three-pillar strategy of the Dutch life sciences and health sector to combine the country’s strong research talents with commer-cial opportunities through public/private part-nerships and various investment vehicles.

“We are very good at the way of doing re-search, clinical research predominantly,” says Dr. Michel A. Dutrée, general manager of Ne-farma, the leading association for research-based pharmaceutical companies in the Neth-erlands. “The Netherlands has invested heavily in clinical research infrastructure that is based

in universities and the country’s top hospitals. We have almost 28 top clinical hospitals whose excellent medical specialists provide valuable research for industry. Our research strength and good relationships with biotech firms and universities is a major reason why big and intermediate pharmaceutical com-panies are interested in the Netherlands.”

Further underpinning the attractiveness of the Netherlands for pharmaceutical and life sciences companies is a strong pipe-line of top-level talent. Dutch education levels are consistently ranked among the highest in the world. A 2007 Global Talent Index of the Economist Intelligence Unit placed the Netherlands third (after the US and Canada) in its ability to attract and pro-mote talent. Similarly, in the 2008 Times Higher Education World University Rankings, 11 of the Netherlands’ 12 universi-ties ranked among the world’s top 200.

As Dutrée explains, “In contrast to other European coun-tries, we have a network of universities here. Rather than competing with each other, Dutch universities work together since, ultimately, they are all government financed. Private financing streams do exist for Dutch universities, but base funding all comes from the government. It is very easy for government and industry to work together in the Netherlands since we are such a small country. The collaboration between the two entities is very pleasing for government.”

“A typical and more traditional Dutch strength that comes from being a small country is to be very internationally oriented with an inclination for going all over the world,” assesses Jan Wisse, managing director of Niaba, a leading Dutch biotech-nology association. Consistent with this trait, approximately 87 percent of Dutch over age 15 speak English, 65 percent speak German, and 25 percent speak French, according to the Minis-try of Economic Affairs. Strength in small numbers, ingenuous innovation, and openness to the world have indeed branded the Netherlands as a gateway to Europe. Top 50-pharmaceutical companies such as Amgen and Genzyme have chosen the coun-try as its headquarters for European activities.

Pharma in the local contextMost pharmaceutical executives rank the Netherlands as first among the “next tier” of European markets behind France, Germany, Italy, Spain, and the UK. “The Netherlands has been for years a significant market for the international pharma-ceutical industry,” states Michael Dumas, country manager of the Italian pharmaceutical giant Menarini in the Netherlands, “not by volume and turnover, but through the innovative char-acter, the high level of carrying out clinical studies, the level of planning and organization, and infrastructure in the coun-try.” Translated to the bottom line, Curd Lejaegere, manag-ing director of Daiichi-Sankyo Benelux, notes that “financial performance for pharmaceuticals in the Netherlands typically has slow uptakes, but continuous growth. Other markets have initial steep curves which eventually flatten out after two years. Initial returns and results take longer in the Netherlands, partly driven by entrance guidelines or initial market accessibility con-straints, but continuous growth can be counted on.”

According to Nefarma, pharmaceuticals generated $4.88 billion (€3.55 billion) in total revenues in 2009. Employing over 50,000 people—27 percent in R&D—and accounting for 9 percent of private Dutch R&D investment, a 2010 study by

Minister Edith Schippers, the Netherlands Minister of Health

“It is very easy for government and industry to work together in the Netherlands since we are such a small country. The collaboration between the two entities is very pleasing for government.”

— DR. MiChEl A. DUTRéE, gEnERAl MAnAgER, nEFARMA

CENTRE OF INTERNATIONALEXCELLENT

Education, research and business come together at Utrecht Science Park. A stimulating environment where knowledge and ideas are generated, exchanged and applied.

Houses a number of institutions with a strong track record inthe field of life sciences, including the University MedicalCenter Utrecht, the Hubrecht Institute, the faculties of Scienceand Veterinary Medicine of Utrecht University, HU Universityof Applied Sciences Utrecht and the nearby National Institutefor Public Health and the Environment.

Provides a wealth of expertise related to sustainability thanksto the presence of the faculties of Geosciences and Science of Utrecht University, TNO, Deltares, HU University of AppliedSciences Utrecht, Utrecht Centre for Earth and Sustainabilityand Climate-KIC.

Is home to more than 50 companies among which are morethan 20 Life Sciences companies such as Genmab, Kendle,Merus Biopharmaceuticals and Danone (2012).

A highly convenient location right in the heart of theNetherlands, close to the historic centre of the city of Utrechtand to the relaxed and beautiful countryside of the region.

MORE THAN JUST A LOCATIONUtrecht Science Park is partly financed by the European Fund for Regional Development www.utrechtsciencepark.nl

USP advert Focus Report_Opmaak 1 13-01-11 17:15 Pagina 1

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Small iS beautifulAt an initial glance the Netherlands might not seem like the most attractive of phar-maceutical markets. Sandwiched in between big brothers France, Germany, and the United Kingdom, a modest population of over 16.5 million Dutch inhabitants hardly drives global growth for multinationals. But it is precisely the assets derived from a small market, mixed with a unique Dutch identity, that makes the Netherlands an ideal desti-nation for international commerce, pharma-ceuticals included.

That the Netherlands is a country literally built on ingenuous innovation goes a long way in explaining the creative flair of the culture. Inhospitable below-sea-level conditions bred infrastructural novelties in the form of iconic windmills and Amsterdam’s dizzying array of canals. Cooperation, collaboration, and coalition-building were essential for survival. Furthermore, the country’s rich history as a trader nation engendered a sharp commercial instinct. Trans-

lated to today’s pharmaceutical industry, inge-nuity, collaboration, and commercial prowess are embodied in a “build, bundle, and benefit” approach—the three-pillar strategy of the Dutch life sciences and health sector to combine the country’s strong research talents with commer-cial opportunities through public/private part-nerships and various investment vehicles.

“We are very good at the way of doing re-search, clinical research predominantly,” says Dr. Michel A. Dutrée, general manager of Ne-farma, the leading association for research-based pharmaceutical companies in the Neth-erlands. “The Netherlands has invested heavily in clinical research infrastructure that is based

in universities and the country’s top hospitals. We have almost 28 top clinical hospitals whose excellent medical specialists provide valuable research for industry. Our research strength and good relationships with biotech firms and universities is a major reason why big and intermediate pharmaceutical com-panies are interested in the Netherlands.”

Further underpinning the attractiveness of the Netherlands for pharmaceutical and life sciences companies is a strong pipe-line of top-level talent. Dutch education levels are consistently ranked among the highest in the world. A 2007 Global Talent Index of the Economist Intelligence Unit placed the Netherlands third (after the US and Canada) in its ability to attract and pro-mote talent. Similarly, in the 2008 Times Higher Education World University Rankings, 11 of the Netherlands’ 12 universi-ties ranked among the world’s top 200.

As Dutrée explains, “In contrast to other European coun-tries, we have a network of universities here. Rather than competing with each other, Dutch universities work together since, ultimately, they are all government financed. Private financing streams do exist for Dutch universities, but base funding all comes from the government. It is very easy for government and industry to work together in the Netherlands since we are such a small country. The collaboration between the two entities is very pleasing for government.”

“A typical and more traditional Dutch strength that comes from being a small country is to be very internationally oriented with an inclination for going all over the world,” assesses Jan Wisse, managing director of Niaba, a leading Dutch biotech-nology association. Consistent with this trait, approximately 87 percent of Dutch over age 15 speak English, 65 percent speak German, and 25 percent speak French, according to the Minis-try of Economic Affairs. Strength in small numbers, ingenuous innovation, and openness to the world have indeed branded the Netherlands as a gateway to Europe. Top 50-pharmaceutical companies such as Amgen and Genzyme have chosen the coun-try as its headquarters for European activities.

Pharma in the local contextMost pharmaceutical executives rank the Netherlands as first among the “next tier” of European markets behind France, Germany, Italy, Spain, and the UK. “The Netherlands has been for years a significant market for the international pharma-ceutical industry,” states Michael Dumas, country manager of the Italian pharmaceutical giant Menarini in the Netherlands, “not by volume and turnover, but through the innovative char-acter, the high level of carrying out clinical studies, the level of planning and organization, and infrastructure in the coun-try.” Translated to the bottom line, Curd Lejaegere, manag-ing director of Daiichi-Sankyo Benelux, notes that “financial performance for pharmaceuticals in the Netherlands typically has slow uptakes, but continuous growth. Other markets have initial steep curves which eventually flatten out after two years. Initial returns and results take longer in the Netherlands, partly driven by entrance guidelines or initial market accessibility con-straints, but continuous growth can be counted on.”

According to Nefarma, pharmaceuticals generated $4.88 billion (€3.55 billion) in total revenues in 2009. Employing over 50,000 people—27 percent in R&D—and accounting for 9 percent of private Dutch R&D investment, a 2010 study by

Minister Edith Schippers, the Netherlands Minister of Health

“It is very easy for government and industry to work together in the Netherlands since we are such a small country. The collaboration between the two entities is very pleasing for government.”

— DR. MiChEl A. DUTRéE, gEnERAl MAnAgER, nEFARMA

CENTRE OF INTERNATIONALEXCELLENT

Education, research and business come together at Utrecht Science Park. A stimulating environment where knowledge and ideas are generated, exchanged and applied.

Houses a number of institutions with a strong track record inthe field of life sciences, including the University MedicalCenter Utrecht, the Hubrecht Institute, the faculties of Scienceand Veterinary Medicine of Utrecht University, HU Universityof Applied Sciences Utrecht and the nearby National Institutefor Public Health and the Environment.

Provides a wealth of expertise related to sustainability thanksto the presence of the faculties of Geosciences and Science of Utrecht University, TNO, Deltares, HU University of AppliedSciences Utrecht, Utrecht Centre for Earth and Sustainabilityand Climate-KIC.

Is home to more than 50 companies among which are morethan 20 Life Sciences companies such as Genmab, Kendle,Merus Biopharmaceuticals and Danone (2012).

A highly convenient location right in the heart of theNetherlands, close to the historic centre of the city of Utrechtand to the relaxed and beautiful countryside of the region.

MORE THAN JUST A LOCATIONUtrecht Science Park is partly financed by the European Fund for Regional Development www.utrechtsciencepark.nl

USP advert Focus Report_Opmaak 1 13-01-11 17:15 Pagina 1

Country ReportSPONSORED SUPPLEMENT

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MARCH 2011 FOCUS REPORTS S6

Country Report

Italy $0.18

France

Spain

$0.21

$0.15

UK

Netherlands $0.10

$0.11

0%

Germany $0.19

Average price/SU (US$)

Netherlands vs EU5: Generic Market volume Penetration by Country

Netherlands already has high generic penetration of unprotected market with low generic priceand very fast penetration after patent expiry

Source: IMS Health, MIDAS, Market Segmentation MAT Sept 2010 – Ethical, Retail, Unprotected Market based on SU, Netherlands Xponent

80%70%60%50%40%30%20%10%

supply. When a manufacturer has cor-nered the lowest price of a medicine, within one to two months they find themselves having to supply far greater quantities, regardless of production ca-pacity. Petro recalls “one company that reduced the price of a product below the 5 percent bandwidth. Suddenly a small preferred company with less than 1 percent market share was responsible for supplying 80 to 90 percent of the to-tal market. Companies are not going to order products if they are not preferred, which makes things very dangerous. The customer—the patient—is suffering.”

Offering his view of the preference policy, Dr. P.F. Bongers, chairman of Bogin, the Dutch generics association assesses that “for the generics industry, if only the lowest price possible is the guiding principle next to long periods of preference, then you are endanger-ing the continuity and quality of supply. Our aim is for fair market competition, but the preference system is not stimu-lating normal market competition with-in generics.”

uPhill for the innovatorSR&D companies are equally squeezed by price pressures between generics penetration affecting reimbursement schemes and the maximum price levels for their medicines. Introduced in 1991, the GVS system is a reimbursement

price for therapeutically interchangeable drugs. Medicines with equivalent modes of action are clustered into one group, with the average price calculated based on comparable doses. The first price be-low the average is the reimbursement

price. With such high generic penetra-tion, traditional lines for R&D compa-nies in the Netherlands such as primary care have become relatively small. As Ul-off Münster, managing director of Mer-ck-Serono in the Netherlands explains, “The most important step is to get to the reimbursement stage. This is a market-specific issue because copayments are not well accepted in the Netherlands, unlike in other European countries. If a medicine is not reimbursed in this coun-try, the introduction of this new medi-cine does not make much sense.”

The maximum price for pharmaceu-ticals in the Netherlands is determined by the average prices of comparable drugs from four reference countries:

Roland Berger Strategy Consultants cites the high-quality, cost-effective health-care that pharmaceuticals provide by imparting health and wealth to Dutch society. Cost-effective is a defining term for pharmaceuticals in the Netherlands. The same study concluded that in 2008, the Netherlands spent only $430 (€313) per person on medicines—10 percent below the European average. In 2010, pharmaceutical expenditures were es-timated to account for only 9 percent of the €60 billion ($82.5 billion) total Dutch healthcare budget, similarly low for European averages. Largely driving these trends is a greater than 70 per-cent generic penetration rate, among the highest in Europe. Generic penetration, however, is just a piece of what many local executives describe as the unsus-tainable pressures of cost-containment in the Netherlands today.

a turning PointDespite enviable research infrastruc-ture and a knowledge economy that are conducive for the pharmaceutical industry in the Netherlands, enormous cost-containment pressures make it dif-ficult to bring products to market with favorable returns.

The Netherlands underwent a major

overhaul in 2006 by implementing a uni-versal insurance mandate to curb soaring healthcare costs. Previously a public sys-tem, the Health Insurance Act of 2006 required every Dutch citizen to purchase health coverage from a private insurer, with the government establishing qual-ity of care guidelines. The theory behind managed competition was for providers

to attract as many patients as possible and allow freedom of mobility across insurers to stimulate better quality care.

Successfully, compulsory insurance now covers all but approximately 1 per-cent of the Dutch population. However, a negative side-effect since 2006 has been a preponderant shift in deciding power to the health insurers who are nei-ther equipped nor incentivized to uphold

quality. A growing one-sided cost focus on reforms risks overshooting its initial objectives and jeopardizes the long-term sustainability of pharmaceutical care.

Penny wiSe, Pound fooliSh?Managed competition has effectively increased the buying power of insurers without a concurrent rise in advising power by pharmaceutical companies. The generics industry has been hit par-ticularly hard by a cost-containment “preference policy.” In 2006 “along came a new stakeholder to the table called health insurance companies, which made this business completely different,” says Kalman Petro, manag-ing director of Actavis Benelux, No. 3 in the Dutch generics market. The prefer-ence policy means that when a number of medicines contain the same active agent, only the cheapest medicine—the “preferred product”—is reimbursed, as decided by the insurance companies rather than physicians or pharmacists. This has created deflationary pressures with prices being pushed to their low-est. The policy has realized noticeable

returns, with generics prices dropping over 53 percent from May 2003 to April 2010, according to Roland Berger. But the industry has reached a dangerous point in which cheaper prices are doing more harm than good.

Some manufacturers have stopped making certain economically unviable products, moving the picture away from healthy competition to uncertainty of

The Merck Netherlands team

“The long-term sustainability of the business will come through our ability to show that we are able to create solutions rather than just delivering a product.”

— DR. UlOFF MünSTER, MAnAging DiRECTOR, MERCk

Country ReportSPONSORED SUPPLEMENT

S5 FOCUS REPORTS MARCH 2011

SPONSORED SUPPLEMENT

MARCH 2011 FOCUS REPORTS S6

Country Report

Italy $0.18

France

Spain

$0.21

$0.15

UK

Netherlands $0.10

$0.11

0%

Germany $0.19

Average price/SU (US$)

Netherlands vs EU5: Generic Market volume Penetration by Country

Netherlands already has high generic penetration of unprotected market with low generic priceand very fast penetration after patent expiry

Source: IMS Health, MIDAS, Market Segmentation MAT Sept 2010 – Ethical, Retail, Unprotected Market based on SU, Netherlands Xponent

80%70%60%50%40%30%20%10%

supply. When a manufacturer has cor-nered the lowest price of a medicine, within one to two months they find themselves having to supply far greater quantities, regardless of production ca-pacity. Petro recalls “one company that reduced the price of a product below the 5 percent bandwidth. Suddenly a small preferred company with less than 1 percent market share was responsible for supplying 80 to 90 percent of the to-tal market. Companies are not going to order products if they are not preferred, which makes things very dangerous. The customer—the patient—is suffering.”

Offering his view of the preference policy, Dr. P.F. Bongers, chairman of Bogin, the Dutch generics association assesses that “for the generics industry, if only the lowest price possible is the guiding principle next to long periods of preference, then you are endanger-ing the continuity and quality of supply. Our aim is for fair market competition, but the preference system is not stimu-lating normal market competition with-in generics.”

uPhill for the innovatorSR&D companies are equally squeezed by price pressures between generics penetration affecting reimbursement schemes and the maximum price levels for their medicines. Introduced in 1991, the GVS system is a reimbursement

price for therapeutically interchangeable drugs. Medicines with equivalent modes of action are clustered into one group, with the average price calculated based on comparable doses. The first price be-low the average is the reimbursement

price. With such high generic penetra-tion, traditional lines for R&D compa-nies in the Netherlands such as primary care have become relatively small. As Ul-off Münster, managing director of Mer-ck-Serono in the Netherlands explains, “The most important step is to get to the reimbursement stage. This is a market-specific issue because copayments are not well accepted in the Netherlands, unlike in other European countries. If a medicine is not reimbursed in this coun-try, the introduction of this new medi-cine does not make much sense.”

The maximum price for pharmaceu-ticals in the Netherlands is determined by the average prices of comparable drugs from four reference countries:

Roland Berger Strategy Consultants cites the high-quality, cost-effective health-care that pharmaceuticals provide by imparting health and wealth to Dutch society. Cost-effective is a defining term for pharmaceuticals in the Netherlands. The same study concluded that in 2008, the Netherlands spent only $430 (€313) per person on medicines—10 percent below the European average. In 2010, pharmaceutical expenditures were es-timated to account for only 9 percent of the €60 billion ($82.5 billion) total Dutch healthcare budget, similarly low for European averages. Largely driving these trends is a greater than 70 per-cent generic penetration rate, among the highest in Europe. Generic penetration, however, is just a piece of what many local executives describe as the unsus-tainable pressures of cost-containment in the Netherlands today.

a turning PointDespite enviable research infrastruc-ture and a knowledge economy that are conducive for the pharmaceutical industry in the Netherlands, enormous cost-containment pressures make it dif-ficult to bring products to market with favorable returns.

The Netherlands underwent a major

overhaul in 2006 by implementing a uni-versal insurance mandate to curb soaring healthcare costs. Previously a public sys-tem, the Health Insurance Act of 2006 required every Dutch citizen to purchase health coverage from a private insurer, with the government establishing qual-ity of care guidelines. The theory behind managed competition was for providers

to attract as many patients as possible and allow freedom of mobility across insurers to stimulate better quality care.

Successfully, compulsory insurance now covers all but approximately 1 per-cent of the Dutch population. However, a negative side-effect since 2006 has been a preponderant shift in deciding power to the health insurers who are nei-ther equipped nor incentivized to uphold

quality. A growing one-sided cost focus on reforms risks overshooting its initial objectives and jeopardizes the long-term sustainability of pharmaceutical care.

Penny wiSe, Pound fooliSh?Managed competition has effectively increased the buying power of insurers without a concurrent rise in advising power by pharmaceutical companies. The generics industry has been hit par-ticularly hard by a cost-containment “preference policy.” In 2006 “along came a new stakeholder to the table called health insurance companies, which made this business completely different,” says Kalman Petro, manag-ing director of Actavis Benelux, No. 3 in the Dutch generics market. The prefer-ence policy means that when a number of medicines contain the same active agent, only the cheapest medicine—the “preferred product”—is reimbursed, as decided by the insurance companies rather than physicians or pharmacists. This has created deflationary pressures with prices being pushed to their low-est. The policy has realized noticeable

returns, with generics prices dropping over 53 percent from May 2003 to April 2010, according to Roland Berger. But the industry has reached a dangerous point in which cheaper prices are doing more harm than good.

Some manufacturers have stopped making certain economically unviable products, moving the picture away from healthy competition to uncertainty of

The Merck Netherlands team

“The long-term sustainability of the business will come through our ability to show that we are able to create solutions rather than just delivering a product.”

— DR. UlOFF MünSTER, MAnAging DiRECTOR, MERCk

Country ReportSPONSORED SUPPLEMENT

S7 FOCUS REPORTS MARCH 2011

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MARCH 2011 FOCUS REPORTS S8

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ceutical companies. Annual spending on healthcare is forecast to reach $76.5 bil-lion (€55.7 billion) by the end of 2010, a 12 percent increase from 2005. In Oc-tober 2010 a new conservative govern-ment came to power to manage these challenges. The atmosphere they inherit will see total expenditure on health and

welfare services rise 3.3 percent to reach €63 billion ($87 billion) in 2011, accord-ing to the Ministry of Health, Welfare and Sport. Certain austerity measures in the 2011 budget will impact the re-imbursement of certain drug classes and save approximately €32 million ($44 million) for health insurers.

Belgium, France, Germany, and the UK. With a reference pricing arrangement, the tenuous macroeconomic situation sweeping Europe can have a potentially destabilizing effect on pharmaceuticals in the Netherlands. Han Brouwer, gen-eral manager of orphan drug special-ist Actelion’s Dutch affiliate, explains, “We have a very tight economic situa-tion here, much like the rest of Europe. European Union countries that are run-ning into financial difficulties are now cutting healthcare costs. Because our reference pricing is based on a basket of countries, we will face price cuts due to the fact that other countries have to decrease their healthcare prices for eco-nomic reasons. The price/quality phe-nomenon in the pharmaceutical busi-ness is eroding dramatically.”

A tricky road remains for the Dutch pharmaceutical industry and the Minis-try of Health, Welfare, and Sport. They must soundly manage austerity plans in the face of aging populations and rising healthcare costs while continuously in-centivizing innovation for biopharma-

Restructured for SuccessThe new, stronger roles of payer bodies in the system have led to vari-ous restructurings at the affiliate level for pharma-ceutical companies, often for the better, in order to revamp their commu-nication strategies with stakeholders. Ferring, the 60-year old Swiss bio-pharmaceutical specialist in reproductive health, urology, gastroenterology, and endocrinology, found that a whole new approach was needed in order to com-municate its value offering to the “new kid on the block.” Anita Goedknegt, general manager, explains that “prior to 2006 pharmaceutical companies had a large group

of sales representatives or account managers who were predominantly focused on the prescribers. The prescribers were the decision-makers with whom you needed to be in constant contact. After the policy change it was no longer just the doctor in charge. We as an organization needed to change everything—and I mean everything.”

Human resource changes were necessary in order to align Ferring’s structure, processes, and organizational attributes with evolving market needs. “Our growth was driven by a stronger connection between the organiza-tion and the market environment,” she explains. Growth and results for that matter have been extraordinary for Ferring since 2006, despite not introducing new products to the Dutch market until 2009. “Up to 2006, we were in a stable annual growth scenario. In that year we changed the entire organization, including its structure and quite some processes, which altogether created a ‘hockey stick growth’ for our affiliate.” Operating in niche markets of fertility, obstetrics, and inflammatory disease, Ferring has consistently relied on double-digit growth in volume, and is projecting similar success for 2011.

With 7 percent growth in 2009, Boehring-er Ingelheim continues to defy conven-tional growth in a 1 to 3 percent market uptake for R&D-based companies in the Netherlands. Perhaps by no coincidence, its above-average performance is attrib-uted to a different sales strategy. “Our approach in the Netherlands today is very different from what it was 10 years ago.,” says general manager Xander Bos. “Our approach then dictated that the larger the share of voice, the more market success—of course backed by the best products. Today we have several products in the market but share of voice is not central in our approach anymore. The size of our organization is still the same as it was five years ago, but over the past few years we have decreased the number of our sales representatives. Instead, we now have other people working in the market with more of a focus on account management activities.”

What has become increasingly central, however, is Boeh-ringer Ingelheim’s focus on engaging industry stakehold-ers to improve patient care. The flagship program to achieve this is Partners in Care Solutions (PICASSO). Co-founded in 2001 with Pfizer at the University Hospital of Maastricht, PICASSO consistently unites stakehold-ers in chronic obstructive pulmonary disease (COPD)—

pharmaceutical companies, specialists, physicians, patients, and dieticians—to optimize quality of care.

PICASSO initiates activities in four areas to achieve its goal: quantifying and measur-ing quality of care; supporting scientific research; aiding local innovations in COPD intervention; and increasing COPD aware-ness.

To date PICASSO has completed 12 scientific studies in COPD and has sup-ported 11 daily practices in care optimiza-tion. PICASSO has become a respected partner in the Dutch healthcare landscape with closely established partnerships

with renowned organizations such as The Netherlands Organization for Health Research and Development. Since 2004 PICASSO has also supported 15 projects that optimize care for COPD patients. According to Boehringer Ingelheim, COPD treatment over the past six years has increasingly moved toward identification, self manage-ment, spirometry, and undoing recurring bottlenecks associated with smoking prevention. A major testament to PICASSO’s success has been helping local caretak-ers recognize and circumvent bottlenecks in the care process—the starting point for discussion with caretakers that ultimately garners support for local initiatives.

Xander Bos, General Manager, Boehringer Ingelheim

Anita Goedknegt, General Manager, Ferring

Ferring HQ, St. Prex, Switzerland

PICASSO—Truly a Work of Art

“For the generics industry, if only the lowest price possible is the guiding principle next to long periods of preference, then you are endangering the continuity and quality of supply.”

— DR. P. F. BOngERS, ChAiRMAn, BOgin

Country ReportSPONSORED SUPPLEMENT

S7 FOCUS REPORTS MARCH 2011

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ceutical companies. Annual spending on healthcare is forecast to reach $76.5 bil-lion (€55.7 billion) by the end of 2010, a 12 percent increase from 2005. In Oc-tober 2010 a new conservative govern-ment came to power to manage these challenges. The atmosphere they inherit will see total expenditure on health and

welfare services rise 3.3 percent to reach €63 billion ($87 billion) in 2011, accord-ing to the Ministry of Health, Welfare and Sport. Certain austerity measures in the 2011 budget will impact the re-imbursement of certain drug classes and save approximately €32 million ($44 million) for health insurers.

Belgium, France, Germany, and the UK. With a reference pricing arrangement, the tenuous macroeconomic situation sweeping Europe can have a potentially destabilizing effect on pharmaceuticals in the Netherlands. Han Brouwer, gen-eral manager of orphan drug special-ist Actelion’s Dutch affiliate, explains, “We have a very tight economic situa-tion here, much like the rest of Europe. European Union countries that are run-ning into financial difficulties are now cutting healthcare costs. Because our reference pricing is based on a basket of countries, we will face price cuts due to the fact that other countries have to decrease their healthcare prices for eco-nomic reasons. The price/quality phe-nomenon in the pharmaceutical busi-ness is eroding dramatically.”

A tricky road remains for the Dutch pharmaceutical industry and the Minis-try of Health, Welfare, and Sport. They must soundly manage austerity plans in the face of aging populations and rising healthcare costs while continuously in-centivizing innovation for biopharma-

Restructured for SuccessThe new, stronger roles of payer bodies in the system have led to vari-ous restructurings at the affiliate level for pharma-ceutical companies, often for the better, in order to revamp their commu-nication strategies with stakeholders. Ferring, the 60-year old Swiss bio-pharmaceutical specialist in reproductive health, urology, gastroenterology, and endocrinology, found that a whole new approach was needed in order to com-municate its value offering to the “new kid on the block.” Anita Goedknegt, general manager, explains that “prior to 2006 pharmaceutical companies had a large group

of sales representatives or account managers who were predominantly focused on the prescribers. The prescribers were the decision-makers with whom you needed to be in constant contact. After the policy change it was no longer just the doctor in charge. We as an organization needed to change everything—and I mean everything.”

Human resource changes were necessary in order to align Ferring’s structure, processes, and organizational attributes with evolving market needs. “Our growth was driven by a stronger connection between the organiza-tion and the market environment,” she explains. Growth and results for that matter have been extraordinary for Ferring since 2006, despite not introducing new products to the Dutch market until 2009. “Up to 2006, we were in a stable annual growth scenario. In that year we changed the entire organization, including its structure and quite some processes, which altogether created a ‘hockey stick growth’ for our affiliate.” Operating in niche markets of fertility, obstetrics, and inflammatory disease, Ferring has consistently relied on double-digit growth in volume, and is projecting similar success for 2011.

With 7 percent growth in 2009, Boehring-er Ingelheim continues to defy conven-tional growth in a 1 to 3 percent market uptake for R&D-based companies in the Netherlands. Perhaps by no coincidence, its above-average performance is attrib-uted to a different sales strategy. “Our approach in the Netherlands today is very different from what it was 10 years ago.,” says general manager Xander Bos. “Our approach then dictated that the larger the share of voice, the more market success—of course backed by the best products. Today we have several products in the market but share of voice is not central in our approach anymore. The size of our organization is still the same as it was five years ago, but over the past few years we have decreased the number of our sales representatives. Instead, we now have other people working in the market with more of a focus on account management activities.”

What has become increasingly central, however, is Boeh-ringer Ingelheim’s focus on engaging industry stakehold-ers to improve patient care. The flagship program to achieve this is Partners in Care Solutions (PICASSO). Co-founded in 2001 with Pfizer at the University Hospital of Maastricht, PICASSO consistently unites stakehold-ers in chronic obstructive pulmonary disease (COPD)—

pharmaceutical companies, specialists, physicians, patients, and dieticians—to optimize quality of care.

PICASSO initiates activities in four areas to achieve its goal: quantifying and measur-ing quality of care; supporting scientific research; aiding local innovations in COPD intervention; and increasing COPD aware-ness.

To date PICASSO has completed 12 scientific studies in COPD and has sup-ported 11 daily practices in care optimiza-tion. PICASSO has become a respected partner in the Dutch healthcare landscape with closely established partnerships

with renowned organizations such as The Netherlands Organization for Health Research and Development. Since 2004 PICASSO has also supported 15 projects that optimize care for COPD patients. According to Boehringer Ingelheim, COPD treatment over the past six years has increasingly moved toward identification, self manage-ment, spirometry, and undoing recurring bottlenecks associated with smoking prevention. A major testament to PICASSO’s success has been helping local caretak-ers recognize and circumvent bottlenecks in the care process—the starting point for discussion with caretakers that ultimately garners support for local initiatives.

Xander Bos, General Manager, Boehringer Ingelheim

Anita Goedknegt, General Manager, Ferring

Ferring HQ, St. Prex, Switzerland

PICASSO—Truly a Work of Art

“For the generics industry, if only the lowest price possible is the guiding principle next to long periods of preference, then you are endangering the continuity and quality of supply.”

— DR. P. F. BOngERS, ChAiRMAn, BOgin

SPONSORED SUPPLEMENT

MARCH 2011 FOCUS REPORTS S10

Country Report

from criSiS SPringS oPPortunityDespite cost-containment measures that have been exacerbated with the greater role that health insurance companies have come to play in the system, there are some advantages.

Most immediately, it has emboldened companies, inciting some to raise their voices in defiance of reforms and mo-tivating them to succeed in the face of regulatory barriers. “The Dutch environ-ment still challenges Menarini to main-tain the level of investments, hoping that access to new medicines will be more driven by the general opinion of Europe,” says Dumas. “Finding the right balance between the system’s sustainability and fair prices rewarding innovation is criti-cal and far from easy.” Proudly present in over 110 countries and initially drawn to the Netherlands in 1996 because of high-quality infrastructure, organization of healthcare, and top-level physicians, Menarini’s commitment to a vast inter-national presence guarantees a commit-ted fight for its established product lines in the Netherlands.

The added layer of a payer body has also forced pharmaceutical companies to be more methodical and meticulous in presenting the pharmacoeconomic value of their products. This has indeed penetrated the commercial mentality of Merck-Serono, a market leader in the Netherlands through biotechnology products in fertility, neurodegenerative disorders, and oncology. According to Münster, “The new landscape will in-crease the complexity of any decision-making process which already is not so easy in this country. There are lots of bodies involved and various layers to work through in order to come to a reimbursement decision. We as an in-dustry, and Merck as a company, need to better understand what drives these decisions. We need to understand in the larger sense what will make the future pharmaceutical world tick.” He adds that as a result, “we will need to in-

crease our effort to strongly document not only the long-term clinical value of our new products, but also the pharma-coeconomic value. It will not be enough to show only clinical data in the future.”

Ultimately, the right products in niche markets will always drive growth, even in the face of cost-containment, as experienced by Italian-based Chiesi. The Netherlands was one of Chiesi’s first startup affiliates outside of Italy, accord-ing to general manager Maurits Huigen. Established in 2007, immediately after

structural reforms to the healthcare sys-tem, Chiesi doubled its growth in the Netherlands in its first two years on the backs of products such as Foster for re-spiratory care; Bramitob, a tobramycin nebulization solution for the treatment of chronic lung infections; and Curosurf for the treatment of respiratory distress symptom in premature babies.

More importantly, such niche market opportunities will not limit themselves to pharmaceutical companies alone. Re-lated companies that are able to provide

“Finding the right balance between the system’s sustainability and fair prices rewarding innovation is critical and far from easy.”

— MiChAEl DUMAS, COUnTRy MAnAgER, MEnARini

Kijk op www.changingdiabetes.nl

voor meer informatie

have a look at changingdiabetes.com

Cha

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reg

iste

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trad

emar

k of

Nov

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563599 CD adv ENGLISH.indd 1 10-12-2010 12:20:26

Menarini was founded in 1886 in Napels. In 1915 its headquarters were established inFlorence. The Menarini Group is present in more than 100 countries with almost 13.000employees and creating a turnover (2009) of 2.797 million euro.

Menarini constantly invests in research. All the research is executed in six R&D centres. One important centre is the Campus in Pomezia (Rome) in which in 2003 Menarini Biotechwas established, focussing on the full product research, development and production ofbiotechnology.

The Menarini Group continues to pursue two principal objectives: Research and Internationalisation.

Excellent results are being achieved that will ultimately allow the company to offer its ownresearch drugs to all patients throughout the world. Fundamental to the implementation of thestrategy is the number of international agreements with important multinational companies forthe licensing of innovative products. Menarini’s long history of successful licensingcooperation’s has consequently made it possible to share a great amount of internationalscientific culture.

Today Menarini has numerous licensing agreements for the European market. It is proud of itsexcellent reputation as an effective and efficient partner for the development of new productsand the dissemination of scientific information.

www.menarini.com

SPONSORED SUPPLEMENT

MARCH 2011 FOCUS REPORTS S10

Country Report

from criSiS SPringS oPPortunityDespite cost-containment measures that have been exacerbated with the greater role that health insurance companies have come to play in the system, there are some advantages.

Most immediately, it has emboldened companies, inciting some to raise their voices in defiance of reforms and mo-tivating them to succeed in the face of regulatory barriers. “The Dutch environ-ment still challenges Menarini to main-tain the level of investments, hoping that access to new medicines will be more driven by the general opinion of Europe,” says Dumas. “Finding the right balance between the system’s sustainability and fair prices rewarding innovation is criti-cal and far from easy.” Proudly present in over 110 countries and initially drawn to the Netherlands in 1996 because of high-quality infrastructure, organization of healthcare, and top-level physicians, Menarini’s commitment to a vast inter-national presence guarantees a commit-ted fight for its established product lines in the Netherlands.

The added layer of a payer body has also forced pharmaceutical companies to be more methodical and meticulous in presenting the pharmacoeconomic value of their products. This has indeed penetrated the commercial mentality of Merck-Serono, a market leader in the Netherlands through biotechnology products in fertility, neurodegenerative disorders, and oncology. According to Münster, “The new landscape will in-crease the complexity of any decision-making process which already is not so easy in this country. There are lots of bodies involved and various layers to work through in order to come to a reimbursement decision. We as an in-dustry, and Merck as a company, need to better understand what drives these decisions. We need to understand in the larger sense what will make the future pharmaceutical world tick.” He adds that as a result, “we will need to in-

crease our effort to strongly document not only the long-term clinical value of our new products, but also the pharma-coeconomic value. It will not be enough to show only clinical data in the future.”

Ultimately, the right products in niche markets will always drive growth, even in the face of cost-containment, as experienced by Italian-based Chiesi. The Netherlands was one of Chiesi’s first startup affiliates outside of Italy, accord-ing to general manager Maurits Huigen. Established in 2007, immediately after

structural reforms to the healthcare sys-tem, Chiesi doubled its growth in the Netherlands in its first two years on the backs of products such as Foster for re-spiratory care; Bramitob, a tobramycin nebulization solution for the treatment of chronic lung infections; and Curosurf for the treatment of respiratory distress symptom in premature babies.

More importantly, such niche market opportunities will not limit themselves to pharmaceutical companies alone. Re-lated companies that are able to provide

“Finding the right balance between the system’s sustainability and fair prices rewarding innovation is critical and far from easy.”

— MiChAEl DUMAS, COUnTRy MAnAgER, MEnARini

Kijk op www.changingdiabetes.nl

voor meer informatie

have a look at changingdiabetes.com

Cha

ngin

g D

iabe

tes®

is a

reg

iste

red

trad

emar

k of

Nov

o N

ordi

sk A

/S

563599 CD adv ENGLISH.indd 1 10-12-2010 12:20:26

Menarini was founded in 1886 in Napels. In 1915 its headquarters were established inFlorence. The Menarini Group is present in more than 100 countries with almost 13.000employees and creating a turnover (2009) of 2.797 million euro.

Menarini constantly invests in research. All the research is executed in six R&D centres. One important centre is the Campus in Pomezia (Rome) in which in 2003 Menarini Biotechwas established, focussing on the full product research, development and production ofbiotechnology.

The Menarini Group continues to pursue two principal objectives: Research and Internationalisation.

Excellent results are being achieved that will ultimately allow the company to offer its ownresearch drugs to all patients throughout the world. Fundamental to the implementation of thestrategy is the number of international agreements with important multinational companies forthe licensing of innovative products. Menarini’s long history of successful licensingcooperation’s has consequently made it possible to share a great amount of internationalscientific culture.

Today Menarini has numerous licensing agreements for the European market. It is proud of itsexcellent reputation as an effective and efficient partner for the development of new productsand the dissemination of scientific information.

www.menarini.com

Country ReportSPONSORED SUPPLEMENT

S11 FOCUS REPORTS MARCH 2011

SPONSORED SUPPLEMENT

MARCH 2011 FOCUS REPORTS S12

Country Report

“If you want to be involved in diabetes care, the only right way forward is to become a complete stakeholder in the treatment process. It is also why we have been changing our organizational setup in ways that are probably not ideal for short-term commercial interests, but are ways that we believe are necessary in order to be a long-term partner in dia-betes care on a local and regional level. For example, we have been setting up account managers with no commercial objectives.” In practice, Novo Nordisk has the ambition to incentivize its repre-sentatives based on HBA1C indicators—a measurement of glycated hemoglobin in the blood, often considered one of the best ways to check for diabetes. In link-ing representatives with eventual HBA1C tests, Novo Nordisk’s incentives would be “purely based on improvements in quality of care, not on how many prod-ucts they sell,” says Lommerde.

Small iS beautiful … and efficientComfortably growing between 3 and 5 percent in the Netherlands on the backs of overall market expansion and Victoza, its main driver, Novo Nordisk feels quite at home in the Netherlands. Despite its vast global presence spanning offices in 76 countries, the Netherlands is a role-model market for Novo Nordisk.

“We are the 10th largest Novo Nord-isk affiliate, so our absolute contribution to the group’s performance is signifi-cant,” according to Lommerde. “Gener-ally speaking, we are typically ahead of the game in the Netherlands with a lot of new initiatives taking place here. Health-care reforms happen in every country, of course, and are not specific to the Neth-erlands. But because we are smaller and industry players know each other a little bit better, some initiatives are very well organized and take place a bit faster here. For that reason I think that a good way for a company to get acquainted with new initiatives is to roll them out first in the Netherlands. This is also a cultural

improved outcomes in a cost-effective manner generally carry the potential to play an increasingly important role un-der budget-tight regimes. An example as such is Netherlands-based Agendia, providing breast cancer patients with what President and CEO Dr. Bern-hard Sixt describes as “pathologyon-demand.” Dubbed “cancer’s crystal ball,” the FDA-cleared MammaPrint, provides physicans with a breast cancer

recurrence test that will identify those patients where chemotherapy or hor-monal therapy will work. “MammaP-rint reduces the incidence of unneces-sary treatment and improves the quality of treatment for those who do need it. Medical costs are reduced, patients re-ceive better care, and many patients are spared the unnecessary burden of che-motherapy; it is truly a win-win-win situation,” Sixt explains.

the new PharmaGreater connectivity between organiza-tion and market environment speaks to an overarching theme: Pharmaceutical companies are increasingly looking to move beyond product to solution; to become a total partner rather than just a supplier. Local industry executives al-most unanimously agree that this will define the “new pharma” of tomorrow. “The long-term sustainability of the business will come through our ability to show that we are able to create solu-tions rather than just deliver a product,” says Münster.

Local industry executives almost unanimously agree that this will define the new pharma of tomorrow. “Just a product is not enough. New pharma needs to be solution-oriented rather than focusing only on the pharmaceutical ‘hardware’—that is, the product,” says Münster. “On top of that, there should not be the slightest doubt that we will deliver top quality and that we are ready and able to ensure high standards. The long-term sustainability of the business will come through our ability to show that we are able to create solutions rather than just delivering a product.” Part-nering with the industry and reshaping organizational processes have played a large part in Novo Nordisk’s success in the Netherlands. “Novo Nordisk wants to change diabetes, with products being just a part of the process,” says Nether-lands general manager Erik Lommerde.

The “Other” InnovationPharmaceutical companies are in busi-ness to break new barriers in innovative medicines. But thinning pipelines and price pressures make conventional innovation harder to come by. With numerous cost-containment reforms in the past five years many industry leaders view the Netherlands as prohibitive for new innovation. How-ever, with a fresh set of eyes and an active agenda on patient care, French pharmaceu-tical company Ipsen’s local Dutch affiliate is redefining a standard for success when it comes to innovation.

“We are a small organization with limited budgets so we must be creative to develop meaningful solutions,” says Dr. Adrienne M. de Waal, country manager of the Netherlands. Therefore in addition to flagship lines in neurology, en-docrinology, and an orphan drug treating IGF-1 deficiency—a child growth hormone—Ipsen considers its customer approach and market entrance as equally important determinants of its innovation. Developing specific home-care programs for patients in which nurses administer injections directly in patients’ homes, provide treatment followup, and report feedback to the doctor, Ipsen places itself as close and supportive to the patient as possible. “Innovation from this perspective translates to being very service-oriented,” says de Waal. “From a patient perspective it is very customer friendly to have dedicated home care, compared to the alternative of additional visits to a general practitioner or the hospital.”

Ipsen’s shift to more Web-based services is another element of the “other” innovation that it provides. “We cooperate in specific medical projects with doctors by facilitating the construction of databases that collect historical

and current treat-ment information for a very rare and genetically inherited disease. By building this database and ana-lyzing the informa-tion, doctors can deduct the best treatment. Future patients will benefit from this information and receive the best

treatment right from the start. The setup of this database has been judged as innovation for patients; without it they are treated by ‘trial and error’ to receive the best options.”

Dr. Adrienne M. de Waal, Country Manager, Ipsen

“Because we are smaller and industry players know each other a little bit better, some initiatives are very well organized and take place a bit faster here.”

— ERik lOMMERDE, gEnERAl MAnAgER, nOvO nORDiSk

Dr. Bernhard Sixt, President & CEO, Agendia

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Adv. Ipsen 111,4 x 117,475 mm.pdf 1 22-12-10 10:43

Country ReportSPONSORED SUPPLEMENT

S11 FOCUS REPORTS MARCH 2011

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MARCH 2011 FOCUS REPORTS S12

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“If you want to be involved in diabetes care, the only right way forward is to become a complete stakeholder in the treatment process. It is also why we have been changing our organizational setup in ways that are probably not ideal for short-term commercial interests, but are ways that we believe are necessary in order to be a long-term partner in dia-betes care on a local and regional level. For example, we have been setting up account managers with no commercial objectives.” In practice, Novo Nordisk has the ambition to incentivize its repre-sentatives based on HBA1C indicators—a measurement of glycated hemoglobin in the blood, often considered one of the best ways to check for diabetes. In link-ing representatives with eventual HBA1C tests, Novo Nordisk’s incentives would be “purely based on improvements in quality of care, not on how many prod-ucts they sell,” says Lommerde.

Small iS beautiful … and efficientComfortably growing between 3 and 5 percent in the Netherlands on the backs of overall market expansion and Victoza, its main driver, Novo Nordisk feels quite at home in the Netherlands. Despite its vast global presence spanning offices in 76 countries, the Netherlands is a role-model market for Novo Nordisk.

“We are the 10th largest Novo Nord-isk affiliate, so our absolute contribution to the group’s performance is signifi-cant,” according to Lommerde. “Gener-ally speaking, we are typically ahead of the game in the Netherlands with a lot of new initiatives taking place here. Health-care reforms happen in every country, of course, and are not specific to the Neth-erlands. But because we are smaller and industry players know each other a little bit better, some initiatives are very well organized and take place a bit faster here. For that reason I think that a good way for a company to get acquainted with new initiatives is to roll them out first in the Netherlands. This is also a cultural

improved outcomes in a cost-effective manner generally carry the potential to play an increasingly important role un-der budget-tight regimes. An example as such is Netherlands-based Agendia, providing breast cancer patients with what President and CEO Dr. Bern-hard Sixt describes as “pathologyon-demand.” Dubbed “cancer’s crystal ball,” the FDA-cleared MammaPrint, provides physicans with a breast cancer

recurrence test that will identify those patients where chemotherapy or hor-monal therapy will work. “MammaP-rint reduces the incidence of unneces-sary treatment and improves the quality of treatment for those who do need it. Medical costs are reduced, patients re-ceive better care, and many patients are spared the unnecessary burden of che-motherapy; it is truly a win-win-win situation,” Sixt explains.

the new PharmaGreater connectivity between organiza-tion and market environment speaks to an overarching theme: Pharmaceutical companies are increasingly looking to move beyond product to solution; to become a total partner rather than just a supplier. Local industry executives al-most unanimously agree that this will define the “new pharma” of tomorrow. “The long-term sustainability of the business will come through our ability to show that we are able to create solu-tions rather than just deliver a product,” says Münster.

Local industry executives almost unanimously agree that this will define the new pharma of tomorrow. “Just a product is not enough. New pharma needs to be solution-oriented rather than focusing only on the pharmaceutical ‘hardware’—that is, the product,” says Münster. “On top of that, there should not be the slightest doubt that we will deliver top quality and that we are ready and able to ensure high standards. The long-term sustainability of the business will come through our ability to show that we are able to create solutions rather than just delivering a product.” Part-nering with the industry and reshaping organizational processes have played a large part in Novo Nordisk’s success in the Netherlands. “Novo Nordisk wants to change diabetes, with products being just a part of the process,” says Nether-lands general manager Erik Lommerde.

The “Other” InnovationPharmaceutical companies are in busi-ness to break new barriers in innovative medicines. But thinning pipelines and price pressures make conventional innovation harder to come by. With numerous cost-containment reforms in the past five years many industry leaders view the Netherlands as prohibitive for new innovation. How-ever, with a fresh set of eyes and an active agenda on patient care, French pharmaceu-tical company Ipsen’s local Dutch affiliate is redefining a standard for success when it comes to innovation.

“We are a small organization with limited budgets so we must be creative to develop meaningful solutions,” says Dr. Adrienne M. de Waal, country manager of the Netherlands. Therefore in addition to flagship lines in neurology, en-docrinology, and an orphan drug treating IGF-1 deficiency—a child growth hormone—Ipsen considers its customer approach and market entrance as equally important determinants of its innovation. Developing specific home-care programs for patients in which nurses administer injections directly in patients’ homes, provide treatment followup, and report feedback to the doctor, Ipsen places itself as close and supportive to the patient as possible. “Innovation from this perspective translates to being very service-oriented,” says de Waal. “From a patient perspective it is very customer friendly to have dedicated home care, compared to the alternative of additional visits to a general practitioner or the hospital.”

Ipsen’s shift to more Web-based services is another element of the “other” innovation that it provides. “We cooperate in specific medical projects with doctors by facilitating the construction of databases that collect historical

and current treat-ment information for a very rare and genetically inherited disease. By building this database and ana-lyzing the informa-tion, doctors can deduct the best treatment. Future patients will benefit from this information and receive the best

treatment right from the start. The setup of this database has been judged as innovation for patients; without it they are treated by ‘trial and error’ to receive the best options.”

Dr. Adrienne M. de Waal, Country Manager, Ipsen

“Because we are smaller and industry players know each other a little bit better, some initiatives are very well organized and take place a bit faster here.”

— ERik lOMMERDE, gEnERAl MAnAgER, nOvO nORDiSk

Dr. Bernhard Sixt, President & CEO, Agendia

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Adv. Ipsen 111,4 x 117,475 mm.pdf 1 22-12-10 10:43

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sponsible for more than 80 percent of that €1.2 billion goal, with the rest of the countries in Europe contributing to the other 20 percent. Within the region, however, Benelux is more than favor-ably competing with the UK and our turnover is in fact high-er than theirs.” In ad-dition to turnover, the strength of the Benelux cluster offers advantag-es to the Daiichi-Sankyo Group and, by exten-sion, serves as a model for any pharmaceuti-cal company spreading across Europe. “Future affiliates, can learn from our experience in product-launching sequences. All of the countries lined up next to each other have launch sequences. Products can be spread all over Europe but you have to study how to implement them and ex-tract the best lessons from the successes and failures, which is what we have gained considerable experience from in this region,” he notes.

engineS of innovationThe Netherlands drew global head-lines across the pharmaceutical com-munity in the summer of 2010 with the announcement of the closure of two large-scale R&D centers. In June, Merck announced the closure of Orga-non’s R&D facilities in southern Hol-land. Operations will be shifted to the US as part of a corporate strategy to streamline global activities. Previously a homegrown Dutch success story before being acquired by Schering-Plough, Or-ganon’s closure and the expected layoff of 2,200 jobs dealt a major blow to the local industry. Last September, Abbott similarly announced the closure of its Weesp-based R&D facility (near Am-sterdam), resulting in the loss of 510 lo-cal jobs. Dr. Dutrée of Nefarma called the Organon announcement a symptom

of “what happens if the government does not have a proper strategy for inno-vation.” The renowned Dutch research culture and knowledge economy took a hit, according to some.

More positive views in the pharma-ceutical and life sciences community look past Organon and Abbott to the richness of the country’s science parks. Leiden Bio Science Park, approximately 30 min-utes from Amsterdam, is the largest life sciences knowledge cluster in the Netherlands and home to more than 70 specialized life sciences companies.

The younger and rapidly growing Utre-

cht Science Park began in 2005 and has since successfully attracted more than 30 companies and knowledge institutes in the life sciences and sus-tainability sectors. In addition to three premier knowledge institutions—the University of Utrecht, the University Medical Center of Utrecht, and the University of Applied Science—and steadfast support from the City and Province of Utrecht, managing direc-tor Alie Tigchelhoff believes that much of the park’s strengths lies in its ability to network with and leverage the cre-ative industry resources of nearby cities Amersfoort and Hilversum. We want to attract companies in the life sciences and sustainability side, but we do that in combination with the cities around us,” she explains. “We are the motor of the science industry and we link to larger networks that extend beyond just the city of Utrecht.” To Tigchel-hoff, Utrecht Science Park’s value offer means sharpening its core focus area rather than stretching them thin. “As sustainability is a broad field, we have had to target a core focus which is com-ing to be bio-based sciences and water. In life sciences we have a focus on pub-

lic health, which involves everything from infectious diseases, immunology, and zoonosis.” She adds that in addi-tion to those core life sciences fields, “we are also working on stem cells and cancer. Hubrecht Institute, an institute of the Royal Academy of Sciences that is globally renowned for its work on stem cells, works in close cooperation with the Utrecht Medical Center.”

the road ahead2011 and 2012 will be pivotal years for shaping the future of the Dutch pharma-ceutical industry. Against soaring costs, a new government will be tasked with ensuring accessible, affordable health-care while still promoting a continuous supply of high-quality pharmaceutical treatments. Industry is collectively urg-ing the authorities to keep a long-term perspective with regards to the health-care system and not jeopardize long-run sustainability for short-term cost gains.

Underpinning the continued success of healthcare and pharmaceuticals in the Netherlands is the long-term viabil-ity of innovation—for so long a defin-ing trademark of the country. Innova-tion that comes through to the market on all fronts—technological, patient care, and marketing—benefits all stake-holders, from government, to patients, to healthcare providers, and companies as economic players. To meet the chal-lenges that come with ensuring innova-tion government of course cannot act alone. Greater communication and col-laboration amongst all industry stake-holders is necessary in order to frame and achieve common needs. Perhaps no culture is as historically well versed in collaborating to innovate as the Nether-lands. An American pharmaceutical ex-ecutive recently assigned to the Nether-lands best sums up the Dutch ability to overcome the odds: “A word that I use to describe my colleagues quite often is pragmatic. It is not fancy, it is not fluffy, it is just all about getting it done.”

element of the Netherlands—we are ea-ger to try new things and are not afraid to fail sometimes.”

Not being afraid to fail has defined Actelion in the Netherlands. General manager Han Brouwer recalls the “ulti-mate entrepreneurial spirit” of starting the Netherlands-Benelux affiliate from nothing. “We did not have a product since it was not yet approved by the Eu-ropean Medicines Agency. I started from my garage and worked from my wooden desk with a 25-meter cable for my tele-phone,” he recounts. From that rawness Actelion has leveraged the small Dutch landscape and its orphan drug portfolio to build and shape new pharmaceutical markets. “We are selling orphan drugs which make up a specialty market, with the dynamics being much different than traditional big pharmaceutical compa-

nies.” Playing a different ballgame in a small market, a key component of Acte-lion’s success is its unique relationship between talent and corporate strategy. This orphan drug business needs a dif-ferent approach, which means that we have to look for unique people with

different competency sets than most pharmaceutical companies. Whereas in traditional pharma most people are part of the system, we try to build the system around the competency set of individu-als,” say Brouwer.

With 12 affiliates throughout Eu-rope, Daiichi-Sankyo has the largest presence of any Japanese pharmaceuti-cal company in Europe. The company’s European Group goal is to average 10 percent annual growth and €1.2 bil-lion ($1.6 billion) in net sales by 2012. While the Big Five markets will clearly drive growth, the Netherlands carries a large weight in group performance when regionally clustered as a Benelux entity. Referring to Benelux’s relative importance, Curd Lejaegere, Manag-ing Director Benelux, Daiichi-Sankyo, notes that “the top five markets are re-

Alie Tigchelhoff, Managing Director, Utrecht Science Park

Curd Lejaegere, Managing Director Benelux, Daiichi-Sankyo

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sponsible for more than 80 percent of that €1.2 billion goal, with the rest of the countries in Europe contributing to the other 20 percent. Within the region, however, Benelux is more than favor-ably competing with the UK and our turnover is in fact high-er than theirs.” In ad-dition to turnover, the strength of the Benelux cluster offers advantag-es to the Daiichi-Sankyo Group and, by exten-sion, serves as a model for any pharmaceuti-cal company spreading across Europe. “Future affiliates, can learn from our experience in product-launching sequences. All of the countries lined up next to each other have launch sequences. Products can be spread all over Europe but you have to study how to implement them and ex-tract the best lessons from the successes and failures, which is what we have gained considerable experience from in this region,” he notes.

engineS of innovationThe Netherlands drew global head-lines across the pharmaceutical com-munity in the summer of 2010 with the announcement of the closure of two large-scale R&D centers. In June, Merck announced the closure of Orga-non’s R&D facilities in southern Hol-land. Operations will be shifted to the US as part of a corporate strategy to streamline global activities. Previously a homegrown Dutch success story before being acquired by Schering-Plough, Or-ganon’s closure and the expected layoff of 2,200 jobs dealt a major blow to the local industry. Last September, Abbott similarly announced the closure of its Weesp-based R&D facility (near Am-sterdam), resulting in the loss of 510 lo-cal jobs. Dr. Dutrée of Nefarma called the Organon announcement a symptom

of “what happens if the government does not have a proper strategy for inno-vation.” The renowned Dutch research culture and knowledge economy took a hit, according to some.

More positive views in the pharma-ceutical and life sciences community look past Organon and Abbott to the richness of the country’s science parks. Leiden Bio Science Park, approximately 30 min-utes from Amsterdam, is the largest life sciences knowledge cluster in the Netherlands and home to more than 70 specialized life sciences companies.

The younger and rapidly growing Utre-

cht Science Park began in 2005 and has since successfully attracted more than 30 companies and knowledge institutes in the life sciences and sus-tainability sectors. In addition to three premier knowledge institutions—the University of Utrecht, the University Medical Center of Utrecht, and the University of Applied Science—and steadfast support from the City and Province of Utrecht, managing direc-tor Alie Tigchelhoff believes that much of the park’s strengths lies in its ability to network with and leverage the cre-ative industry resources of nearby cities Amersfoort and Hilversum. We want to attract companies in the life sciences and sustainability side, but we do that in combination with the cities around us,” she explains. “We are the motor of the science industry and we link to larger networks that extend beyond just the city of Utrecht.” To Tigchel-hoff, Utrecht Science Park’s value offer means sharpening its core focus area rather than stretching them thin. “As sustainability is a broad field, we have had to target a core focus which is com-ing to be bio-based sciences and water. In life sciences we have a focus on pub-

lic health, which involves everything from infectious diseases, immunology, and zoonosis.” She adds that in addi-tion to those core life sciences fields, “we are also working on stem cells and cancer. Hubrecht Institute, an institute of the Royal Academy of Sciences that is globally renowned for its work on stem cells, works in close cooperation with the Utrecht Medical Center.”

the road ahead2011 and 2012 will be pivotal years for shaping the future of the Dutch pharma-ceutical industry. Against soaring costs, a new government will be tasked with ensuring accessible, affordable health-care while still promoting a continuous supply of high-quality pharmaceutical treatments. Industry is collectively urg-ing the authorities to keep a long-term perspective with regards to the health-care system and not jeopardize long-run sustainability for short-term cost gains.

Underpinning the continued success of healthcare and pharmaceuticals in the Netherlands is the long-term viabil-ity of innovation—for so long a defin-ing trademark of the country. Innova-tion that comes through to the market on all fronts—technological, patient care, and marketing—benefits all stake-holders, from government, to patients, to healthcare providers, and companies as economic players. To meet the chal-lenges that come with ensuring innova-tion government of course cannot act alone. Greater communication and col-laboration amongst all industry stake-holders is necessary in order to frame and achieve common needs. Perhaps no culture is as historically well versed in collaborating to innovate as the Nether-lands. An American pharmaceutical ex-ecutive recently assigned to the Nether-lands best sums up the Dutch ability to overcome the odds: “A word that I use to describe my colleagues quite often is pragmatic. It is not fancy, it is not fluffy, it is just all about getting it done.”

element of the Netherlands—we are ea-ger to try new things and are not afraid to fail sometimes.”

Not being afraid to fail has defined Actelion in the Netherlands. General manager Han Brouwer recalls the “ulti-mate entrepreneurial spirit” of starting the Netherlands-Benelux affiliate from nothing. “We did not have a product since it was not yet approved by the Eu-ropean Medicines Agency. I started from my garage and worked from my wooden desk with a 25-meter cable for my tele-phone,” he recounts. From that rawness Actelion has leveraged the small Dutch landscape and its orphan drug portfolio to build and shape new pharmaceutical markets. “We are selling orphan drugs which make up a specialty market, with the dynamics being much different than traditional big pharmaceutical compa-

nies.” Playing a different ballgame in a small market, a key component of Acte-lion’s success is its unique relationship between talent and corporate strategy. This orphan drug business needs a dif-ferent approach, which means that we have to look for unique people with

different competency sets than most pharmaceutical companies. Whereas in traditional pharma most people are part of the system, we try to build the system around the competency set of individu-als,” say Brouwer.

With 12 affiliates throughout Eu-rope, Daiichi-Sankyo has the largest presence of any Japanese pharmaceuti-cal company in Europe. The company’s European Group goal is to average 10 percent annual growth and €1.2 bil-lion ($1.6 billion) in net sales by 2012. While the Big Five markets will clearly drive growth, the Netherlands carries a large weight in group performance when regionally clustered as a Benelux entity. Referring to Benelux’s relative importance, Curd Lejaegere, Manag-ing Director Benelux, Daiichi-Sankyo, notes that “the top five markets are re-

Alie Tigchelhoff, Managing Director, Utrecht Science Park

Curd Lejaegere, Managing Director Benelux, Daiichi-Sankyo

email: info@focusreports.net