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An economist’s perspective on Denmark’s plan for life science growth

Jakob Kjellberg VIVE

In March, the country released a 5-year plan for the industry. Here’s what’s new.

The life science industry is a critical contributor to the Danish economy, employing 38,000 people and accounting for 17 percent of total exports, more than agriculture or food. Life science exports were 107 billion kroner in 2016. To maintain momentum in this sector, in March, the government issued a Growth Plan for Life Science supported by 30 million Danish kroner yearly.

The plan has 36 initiatives under 6 areas: Making R&D attractive, increasing clinical research, ensure top-class medicines, improving access to qualified employees, promoting startups and digital enterprises, and supporting internationalization. Initiatives range from tweaking regulations and taxes to evaluating education and business models to opening a Danish Innovation Center in Boston. Activities are under a new life science unit at the Danish Ministry of Industry, Business and Financial Affairs.

For expert insights on the plan, Nordic Life Science talked with Jakob Kjellberg (JK), professor and program leader for health at VIVE, The Danish Center for Social Science Research.

NLS: What’s your overall impression of the plan?

JK: The Danish government has an ongoing relationship with the life science industry and listens to them because they’re a large part of the economy. It’s important to sustain the industry.

The Growth Plan isn’t a major direction change. It doesn’t have large amounts of new money. It has tax reductions for R&D and better targeting of existing resources and research money. The new Innovation Center in Boston was likely arranged before. Some initiatives, like increasing dialog among organizations, aren’t concrete and some, like the focus on digital transformations aren’t very targeted to pharma or medical science.

The unit at the Ministry of Danish Ministry of Industry, Business and Financial Affairs gives the industry easier access to people who understand that business area. They’ll listen when the industry has issues and they’ll try to do something about them.

NLS: What changes will affect the industry the most?

JK: Risk-sharing for drug subsidies is the most concrete initiative in the plan [under area 3, top-class medicines].

Denmark has been strict about giving general subsidies to all users of a medicine vs. individual subsidies for limited groups. That complicates the export market.

In a trial arrangement, pharmaceutical companies asking for general subsidies for a medicine might try risk-sharing, which is repaying the government for subsidies that exceed the Danish Medicine Agency’s estimate. That’s real change. It could affect how Denmark applies subsidies for medicines and the export market.

The plan supports more people employed full-time at the EMA [European Medicines Agency] to strengthen Denmark’s commitment to that agency. [In the wake of Brexit, EMA is moving from London to Amsterdam.]

Area 4, Access to a qualified workforce, has some tax regulation for people coming from abroad to work. It’s not a major change but makes things better. The industry is heavily dependent on recruiting top researchers but we’re a tiny country so we can’t supply them all ourselves. We have ongoing discussions about income and immigration in Denmark, but these initiatives are supposed to make things smoother for the industry.

NLS: Thank you for answering our questions. Any final observations?

JK: The plan is mainly the government asking the industry, as they’ve done previously, how can we serve you better so you can serve us as a country?

Photo of Jakob Kjellberg: VIVE