Biotech: A Major Contributor to 
Pharma Global Business

Presently, the international economy and, consequently, the pharmaceutical sector are experiencing very hard times: both are recording a significant decrease of 
worldwide employment levels. The same situation may 
be detected in Italy as well, however, in 2008 Italian 
industry showed remarkable signs of vitality which confirm its leading role in Europe and worldwide. In particular, 
the Italian pharmaceutical environment plays a 
fundamental role for the industrial sector, for the 
economic and scientific growth of the country as a 
whole, and for the well-being of citizens.

Italy is one of the world's leading manufacturing countries, ranking third in Europe and fifth in the world in terms of employed personnel. Particularly on the demand side Italy ranks sixth among the advanced economies with a total domestic spending of €17.5 billion at ex-factory prices, compared to a world total of €489.9 billion, (corresponding to a 3.5 % share).

In the Italian market, with 235 companies producing pharmaceutical specialities and 101 processing raw materials, the sector is characterised as follows:

• 69,500 employees who are among the most qualified in the industrial panorama: over 90 % have a degree or an academic qualification;
• 6,230 R&D employees, representing 9 % of all employees (compared to an industrial average of 1 %);
• €23 billion in production, of which 53 % addressed to export;
• €12 billion in total export, of which €9.3 represented medicinal products, thanks to which a positive trade 
balance in this sector has been recorded since 1995 (€522 million in 2008);
• €2.3 billion in investments, of which €1.2 in R&D (13.5 % of the manufacturing industry) and €1.1 in high-tech manufacturing plants;
• €1 billion in three-year research and production investments, already invested by the companies within the framework of "Programme Agreements"; and
• €3.5 billion in directly generated taxation and social contributions, corresponding to over 20 % of public pharmaceutical spending.

Compared to other large industrial sectors, the pharmaceutical industry boasts the highest levels of productivity. This hallmark depends on the drive to innovation, the high level of investments in increasingly advanced and efficient plants and equipments, and last but not least, the excellence of its human resources. Accordingly, it represents one of the competitive advantages of the Italian economy: managers in international companies operating in Italy appreciate the productivity, flexibility and creativity, which are increasingly important features for R&D in a niche market.

Research in Italy

The pharmaceutical industry has the highest intensity of research of all the industrial sectors and its leading industries invest an amount corresponding to more than 15 % of their turnover. The industry's widespread project capacity, which is also reflected in the investment plans announced by large, medium-sized and small companies, confirms pharmaceutical leadership in the field of research. This and its great productive vocation represent the characteristics that make the pharmaceutical industry not only one of the largest and most advanced "Made in Italy" sectors, but also places it at the centre of the knowledge economy. In fact since 2000, clinical trials in Italy have risen by more then 30 %, with a growing concentration in phases I and II, from 28.6 % in 2000 to more than 40 %.

Biotechnology Industry In Italy

At the end of 2008, 190 companies were investing in biotech R&D exclusively focused on the healthcare sector (out of 260 biotechnological companies in Italy). They accounted for close to €14.5 billion in overall sales, of which more than €5.1 billion generated from the sale of products and innovative technologies. Moreover, they invested €1.3 billion in biotech R&D and employed approximately 41,000 people, 7,684 in R&D.
On the basis of an analysis of the business models of the 190 companies investing in biotech R&D in the life science industry, it is possible to identify: 33 multinational companies, 26 companies with a primarily domestic orientation, as well as 131 university spin-offs, industrial spinouts and start-ups. In accordance with their own strategic plans, these companies are carrying out investments in R&D with the purpose of enhancing their pipelines with the addition of innovative products that will allow them, inter-alia, to extend the period of patent coverage.

According to the classification of products under development, these can be divided into 14 therapeutic areas, among which the following areas standout for their critical mass: antineoplastics and immune modulators (38 %), central nervous system products (12 %), and dermatology and cardiovascular products (both 7 %).

Commitment To Rare Diseases

The most important contributions for the treatment of rare diseases (which are mainly of genetic origin) come from biotech pharmaceutical research and genetic engineering. Furthermore, many orphan drugs are actually biotech drugs.

Rare diseases refer to pathologies that affect no more than five people out of 10,000. The World Health Organisation has surveyed over 7,000 diseases (of which the greater part affect children) that altogether afflict more than 25 million people in Europe and around two million in Italy.
On account of their complexity, which refers to both their therapeutic and ethical nature (on average three to five years investigations are necessary before reaching a diagnosis), rare diseases call for a new policy that combines public and private skills in social solidarity arrangements that observe the principle of subsidiary. This is the direction taken by the "Industrial Innovation Project - Industry 2015" in choosing the area of rare and neglected diseases as an area for action.

This project comes on top of other measures, such as programme agreements to promote investment in production and R&D in Italy, the fund for the promotion of research and advanced training in the field of biotechnologies and the increase in the ceiling of tax credits for research.