According to statistics, our SMEs in the pharmaceutical and diagnostics sector receive only about a quarter of their risk money compared to their European competitors.
Finland the pharmaceutical and health technology industries are doing exceptionally well. Exports of health technology alone exceeded 2.4 billion euros last year. Both exports and the trade surplus have grown by about nine percent annually throughout the 2010s. Bayer and Orion, the leaders of our pharmaceutical industry, are also investing in increasing their production.
However, not all the conditions for the industry to flourish are in place. Our pharmaceutical and diagnostic SMEs receive only about a quarter of their risk money compared to their European competitors. The reason for the shortage is the lack of private equity funds investing in the pharmaceutical and diagnostics sectors. Foreign money cannot be found in a growth company unless a Finnish investor makes a simultaneous investment. Funding for the start-up phase must, in principle, be done entirely domestically, and we also lack risk investors for this phase.
European regulation of health technology and drug development is tightening. This is believed to facilitate the shift of manufacturing from the Far East to Europe. A medicine or health technology product manufactured here is an eco-act globally because the industry is acting responsibly. It is time to increase domestic production right now, when the market is also growing.
The European Commission’s recovery funding for Finland must be used for renewal and directed to areas of real growth. Due to the long product development cycles in the pharmaceutical and diagnostic sectors, it is difficult to set up mutual funds with private money alone. The creation of funds should therefore be promoted, in part, with public funding. This will also leverage private money for companies and secure growth in exports and employment. Security of supply in an important sector is best realized in Finnish industry.
Senior Vice President, HealthTurku
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