Read the Conversation
EF: Merck Healthcare is poised for growth in 2024. Do you see this year as a challenge or an opportunity?
PK: Poland's economic opportunities align closely with observed growth data. Reimbursement conditions and access to innovative treatments have improved, which is a crucial factor for investing in innovation in Poland and conducting business. The good news is that Poland, which has historically been lagging, has progressed from the 25th to the 21st position in EU reimbursement rankings. While commendable, further enhancements are vital, considering Poland's stature. Despite progress, healthcare spending per capita remains one of the EU's lowest at 1,700EUR/capita vs. 3.6k/capita EU average, which suggests healthcare spending needs to be a strategic focus for Poland. Although improvements have been made, Poland must address its third-lowest rank in reimbursement waiting times and the limited number of innovations available to Polish patients – with only 42 available in Poland out of a total of 160 licenced between 2017 and 2020. Enhancing reimbursement efficiency and fostering innovation are imperative for Poland's continued advancement given the relationship between health and productivity in any society.
Furthermore, even when products are reimbursed in Poland, there is strict prescribing control limiting reimbursement to a smaller population than the drug's actual license. 78% of available innovative medicines are reimbursed to a limited group of patients vs the licenced indication in Poland. This challenge impacts patients, hinders access to expected treatments, doesn’t encourage innovation and in the long term, fails to exploit the potential of innovation to reduce the indirect costs of the health and social care system. Addressing this hurdle is crucial for fostering innovation and supporting both patients and pharmaceutical companies.
Despite challenges, there is immense potential in Poland. Merck maintains a diverse portfolio, supplying established brands and innovative products across various disease areas, such as fertility, cardiovascular medicine, endocrinology, diabetes, multiple sclerosis, and oncology. However, reimbursement barriers have delayed the launch of innovative products in Poland relative to other EU markets.
The upcoming reimbursement of IVF in Poland is noteworthy, reflecting positive changes. Merck is a global market leader in fertility with significant experience, science and expertise in this area.
However, while access to medication remains a challenge, Merck aims to go beyond mere product supply. With a mission to help create, improve and prolong the lives of patients, the ultimate goal is to ensure patients receive necessary medication promptly, prompting efforts to improve patient journeys through technology and partnerships. Overcoming healthcare system challenges in Poland is a priority for Merck to accelerate patient access to vital treatments.
EF: Could you provide more details about Merck's presence in Poland and the nation’s strategic importance to the group?
PK: In Poland, our three sectors— healthcare, life sciences, and electronics—are well-represented. Our healthcare business effectively reaches the market, providing patients access to medications and conducting ongoing clinical research, with over 45 trials completed and 18 currently underway involving more than 750 patients across 100 clinical research sites across Poland.
Our life science sector is integral to domestic pharmaceutical businesses, supplying products, services, and reagents. It also supports research and development by being a key supplier to approximately 90 percent of Polish universities. Finally, our shared service center in Wrocław is one of only three such centers globally for Merck. In total Merck employs close to 1000 employees in the country which has and continues to grow consistently. This is because Poland offers exceptional access to talent, language proficiency, and a highly qualified technical workforce.
We also have a unique regulatory hub in Poland, reflecting the country's highly educated and motivated workforce, which the organization actively supports.
As a European-based organization, Merck is a key partner to help ensure the security of supply. 12/18 of our product sites are situated in Europe where all of the products in our portfolio have manufacturing capability in Europe. 45% of our total number of employees are based in Europe (26,500 people across 32 countries, with 1,800 directly in R&D, and around 2,000 indirectly. However, Merck also benefits from an international international supply chain creating further balance, scale and security.
Governments should prioritize both the short-term security of supply and also security of supply of innovation. Europe's innovation performance has declined over the past two decades, with a widening R&D investment gap between the US and the EU, now at $25 billion. China's increasing prominence in R&D spending further emphasizes the need for strategic planning. Europe attracted 41% of global R&D investment 20 years ago, but in 2020 this was reduced to only 31%. In the period 2015-2020, Europe attracted 17% of global clinical trials compared to 64% in the US.
Concerns arise from the current EU pharmaceutical strategy review, where the current balance between affordable access to innovation and supporting innovation is at risk of getting the balance wrong. Specifically, proposals, such as reducing regulatory data protection and narrowing of the definition of unmet medical need (UMN), may exacerbate the already widening innovation gap with the rest of the world. The security of innovation is crucial to avoid being at the mercy of higher-priced innovation imports into the EU in the future.
But understandably affordability and access to current innovation is an essential concern for all governments. However, taking a value-based approach to pricing medicines could be a better solution to managing costs and optimising patient outcomes while also encouraging and stimulating the right kind of innovation from the industry. This is not a new idea but its adoption into practice remains problematic. This is where better partnership and collaboration could help accelerate progress by leveraging data, negotiating innovative pricing models, and risk-sharing. This could really help manage affordability and foster innovation simultaneously. As always the challenge lies in finding a balanced approach that benefits patients, and payors and supports innovation in the industry.
EF: Could you please describe your portfolio in detail?
PK: Poland not unlike other EU countries is having disease burden in specialised areas, such as multiple sclerosis and certain oncology treatments where Merck operates. That is why there is a drive to bring new innovations to the market. However, in Poland, there still exists a gap in disease areas that has been largely and more successfully addressed in other countries. For example, if you look at the treatment rate of hypothyroidism compared to what you would expect as an incidence level, patients in countries like the UK and France seem to have high diagnosis and treatment rates. However, it appears that there may be higher levels of undiagnosed and treated patients in Poland. There is a significant proportion of patients in Poland who, we assume, have the condition but have not been diagnosed. Furthermore, there are people who are diagnosed but not treated.
We are actively involved in trying to understand this situation more deeply. We are also looking into how can we partner with healthcare providers to improve the diagnosis rate and patient treatment. There is a burden, but the pattern of that burden might be different to other markets.
EF: How are you leveraging the common spaces in Infarma, and what are the trends that you are seeing when it comes to the discussions that you are having in the Union?
PK: Companies within the industry share a strong sense of unity, recognizing common issues and sharing a collective passion. While trade organizations can sometimes be in reactive mode to external factors I really believe in also having a proactive approach to create a vision for our purpose and how we can address challenges in collaboration between industry and healthcare organizations. I really believe we can achieve more together for the benefit of society as a whole and help Poland reach its true potential through better healthcare.
Partnerships are key for R&D but I also believe a lot can be achieved in driving non-scientific innovation, focusing on innovative ways of working. Transparency, shared objectives, and commitments are vital in breaking down intellectual barriers between private and public entities. Despite differing goals, numerous examples, such as the collaborative efforts during the COVID-19 pandemic, demonstrate the power of organizations from diverse backgrounds coming together to solve shared problems. Through transparent dialogue and a shared commitment to benefiting patients and society, collaborative solutions are achievable. The primary obstacle lies in ensuring consistent communication and true dialogue.
EF: When it comes to attracting and retaining talent, what skill set do you require for the future?
PK: I assess situations based on the balance of challenge and support. The most fulfilling work environment, in my perspective, combines high challenge with strong trust and support. Regardless of the organization, I strive to foster a culture where problems can be openly addressed with transparency and the right intentions. This atmosphere acknowledges and values individual differences, recognizing strengths and weaknesses as aspects of navigating collaboratively. Merck's high-impact culture aligns seamlessly with my personal philosophy.
We need to always question ourselves and create a wave of positivity and motivation. When it comes to retention, we of course look at the same things as many organisations - do the standard things like look at our rewards, terms, and conditions - the tangible things. However, I think what really differentiates us is the culture and the way we treat people. There is a genuine and consistent commitment to drive the business but also to develop employees and provide a great place to work where people can be themselves and feel great satisfaction in their work.
EF: If you had to create a road map for a sustainable healthcare system in Poland for the next 10 years, what would those be?
PK: My first pillar would be to have a disciplined, dedicated focus on patients. We need to fully understand patients’ issues and challenges and design healthcare around them to optimise outcomes in the most cost-effective way.
The second pillar revolves around the way that you treat healthcare professionals and the way that you support them. This will influence the way that they, in turn, treat and support patients. Productivity is very rarely driven by new procedures. Productivity is driven by engagement. There are challenges with affordability, some structural difficulties, and funding issues, but the best way of tackling those things is to get more out of less. The way to get more out of less is to have a highly engaged workforce that feels respected and supported and is also challenged to make a difference.
My third pillar would be partnerships. When you bring resources together and focus effort together, you are no longer fighting in opposite directions; you are moving in the same direction together. I would like to see a higher level of trust, openness, and partnership between public and private organizations for this reason.
EF: At the end of this year, what is it that you are going to be most excited to celebrate? What is it that you want to accomplish this year with your team?
PK: This is a very personal and private goal, but because I am half Polish and I have a deep emotional connection to the country. I want to, in all ways possible, elevate Poland to the level of visibility, credibility, and respect that it deserves within the company. I want Poland to move into the top five countries in Europe for Merck, which will bring greater positive focus onto the country for investment and also broaden the opportunities available to our employees working in Poland.
