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>Yet European Biopharma and chemicals engineering remains competitive despite having similar issues as a similar capex heavy industry with a significant IP comp

>Yet European Biopharma and chemicals engineering remains competitive despite having similar issues as a similar capex heavy industry with a significant IP component. It's really just an institutional issue. Pharma is not a commodity nor resembling anything like "free market" competition. It's a crazy patent minefield, massive regulatory moat, massive state subsidies and government protectionism plus sometimes backroom deals between pharma and politicians. Nothing remotely similar to commodities like consumer software and hardware.

alephnerd 11mo ago
> Nothing remotely similar to commodities like software and hardware First, what I should have done earlier in this conversation because I keep forgetting how broad and complex of an industry this is: What do you mean by the semiconductor industry? No country other than the US has an end-to-end domestic pipeline from design to fabrication to packaging to developing EDAs. For this thread, I have limited my conversation to fabrication and package. These industries have largely coalesed around the US and Korea/Japan/Taiwan/China/ASEAN for decades because of industrial policies and educational programs. For chip design, this industry is largely limited to the US, Israel, India, China, and Taiwan for decades due to a number of key hires at Intel back in the 1990s. The strategy needed to develop a domestic chip design ecosystem is completely distinct from that for developing a domestic fabrication or packaging ecosystem. > Pharma is not a commodity nor resembling anything like "free market" competition It very much is depending on the type of compound, just like it is depending on the type of semiconductor (or downstream components). > It's all about patents, massive regulatory moats, massive state subsidies and government protectionism plus backroom deals between pharma and politicians Hate to break your cherry, but that's all industries. I remember our lawyers spending months working with the trade promotion ministry of a certain CEE state along with KPMG in order to get a sweet heart deal to open a dev hub in an IT park that was associated with a politically connected oligarch. The economics of biopharma really aren't that different from semiconductors: 1. You have an entirely separate design phase that is completely independent of synthesis/fabrication 2. You have entire sub-segments of the industry devoted just to synthesis/fabrication along with testing 3. Both are high capex/low margins industries, as Asian players in both China and India have largely disrupted the generics market while higher margin IP tends to be owned by the American subsidiaries of European Biopharma companies 4. It doesn't necessarily make sense to synthesize low margins APIs when you will inevitably be undercut by American, Chinese, or Indian players so the best solution is to specialize in design because that at least allows you to own IP. ------ This is a question for each individual European nation, because this is something that the European Union cannot solve - do EU nations actually care about developing industrial policies intended to develop domestic capacity or not in specific industries. If so, does each European nation actually have the state-level capacity and the human capital capacity to start making a case for investment. Additionally, can any European state give the 50%-150% capital subsidy grants or 0-1% interest rate loans that countries like South Korea, Japan, China, Taiwan, the US, and India along with their state-level components? After chatting with my friends who work on these types of questions in Bruxelles as well as a couple larger European capitals, the answer was no, simply because the fiscal leeway just doesn't exist and the demand really doesn't exist either. If Volkswagen AG or Groupe Renault is pushed into a corner, they will just shift manufacturing out of Europe and towards China or India respectively.
- jack_tripper 11mo ago
  >Hate to break your cherry, but that's all industries. It's not binary where it either it is or it isn't but there's various levels to it and Pharma gets special privilege over industries like cars, phones or semiconductors, since it deals with people's lives. > as Asian players in both China and India have largely disrupted the generics Then why did I never took an Indian or Chinese made paracetamol, but all generics in my EU country I ever took from the pharmacy ware locally made? Meanwhile I can't buy a locally made laptop, smartphone, GPU, it's all Asian made goods.
  - alephnerd 11mo ago
    > Then why did I never took an Indian or Chinese made paracetamol, but all generics in my EU country I ever took from the pharmacy ware locally made Because it was synthesized using Chinese and Indian sourced "Active Pharmaceutical Ingredients" (APIs) [0], both of whom synthesize around 80% of all APIs required by European pharma manufacturers. The EU is trying to rectify this, especially after COVID when India decided to stop all exports of APIs and pharmaceuticals to Europe in order to prioritize domestic production [1], but it still takes time (they started in 2021, and it'll probably take another 5-7 years to build the critical mass needed to rebuild a domestic ecosystem). > Meanwhile I can't buy a locally made laptop, smartphone, GPU, it's all Asian made goods Becuase, as I have kept elucidating on multiple occasions on this thread, the entire ecosystem for these goods simply does not exist in Europe, and no European member state is interested in opening their pocketbooks to subsidize manufacturers to move to Europe in order to begin manufacturing the intermediate parts needed. Countries like those across ASEAN, South Korea, Japan, Taiwan, China, the US, and India offer millions to billions of dollars in hard cash, land, tax subsidizes, or a mix of all 3 in order to attract or retain manufacturers. EU member states simply does not do the same for electronics. Some of them absolutely do so for biopharma (such as Denmark), but by and large they tend to be exceptions of the rule. > Pharma gets special privilege over industries like cars, phones or semiconductors, since it deals with people's lives Ime, Pharma PLIs and incentives are fairly comparable to those that would be provided to electronic industries as well. The same tax sops India gave to attract Apple to TN were similar to those that India gave Novartis and Bayer decades ago, and China has been using the same subsidy program it used to attract electronics manufacturing to attract and become a major player in the biopharma space. [0] - https://pharmacia.pensoft.net/article/172383/ https://pharmacia.pensoft.net/article/172383/ [1] - https://www.statnews.com/2021/05/05/india-vaccine-heist-shoddy-regulatory-oversight-imperil-global-vaccine-access/ https://www.statnews.com/2021/05/05/india-vaccine-heist-shod...

alephnerd 11mo ago

> Nothing remotely similar to commodities like software and hardware First, what I should have done earlier in this conversation because I keep forgetting how broad and complex of an industry this is: What do you mean by the semiconductor industry? No country other than the US has an end-to-end domestic pipeline from design to fabrication to packaging to developing EDAs. For this thread, I have limited my conversation to fabrication and package. These industries have largely coalesed around the US and Korea/Japan/Taiwan/China/ASEAN for decades because of industrial policies and educational programs. For chip design, this industry is largely limited to the US, Israel, India, China, and Taiwan for decades due to a number of key hires at Intel back in the 1990s. The strategy needed to develop a domestic chip design ecosystem is completely distinct from that for developing a domestic fabrication or packaging ecosystem. > Pharma is not a commodity nor resembling anything like "free market" competition It very much is depending on the type of compound, just like it is depending on the type of semiconductor (or downstream components). > It's all about patents, massive regulatory moats, massive state subsidies and government protectionism plus backroom deals between pharma and politicians Hate to break your cherry, but that's all industries. I remember our lawyers spending months working with the trade promotion ministry of a certain CEE state along with KPMG in order to get a sweet heart deal to open a dev hub in an IT park that was associated with a politically connected oligarch. The economics of biopharma really aren't that different from semiconductors: 1. You have an entirely separate design phase that is completely independent of synthesis/fabrication 2. You have entire sub-segments of the industry devoted just to synthesis/fabrication along with testing 3. Both are high capex/low margins industries, as Asian players in both China and India have largely disrupted the generics market while higher margin IP tends to be owned by the American subsidiaries of European Biopharma companies 4. It doesn't necessarily make sense to synthesize low margins APIs when you will inevitably be undercut by American, Chinese, or Indian players so the best solution is to specialize in design because that at least allows you to own IP. ------ This is a question for each individual European nation, because this is something that the European Union cannot solve - do EU nations actually care about developing industrial policies intended to develop domestic capacity or not in specific industries. If so, does each European nation actually have the state-level capacity and the human capital capacity to start making a case for investment. Additionally, can any European state give the 50%-150% capital subsidy grants or 0-1% interest rate loans that countries like South Korea, Japan, China, Taiwan, the US, and India along with their state-level components? After chatting with my friends who work on these types of questions in Bruxelles as well as a couple larger European capitals, the answer was no, simply because the fiscal leeway just doesn't exist and the demand really doesn't exist either. If Volkswagen AG or Groupe Renault is pushed into a corner, they will just shift manufacturing out of Europe and towards China or India respectively.

jack_tripper 11mo ago
>Hate to break your cherry, but that's all industries. It's not binary where it either it is or it isn't but there's various levels to it and Pharma gets special privilege over industries like cars, phones or semiconductors, since it deals with people's lives. > as Asian players in both China and India have largely disrupted the generics Then why did I never took an Indian or Chinese made paracetamol, but all generics in my EU country I ever took from the pharmacy ware locally made? Meanwhile I can't buy a locally made laptop, smartphone, GPU, it's all Asian made goods.
- alephnerd 11mo ago
  > Then why did I never took an Indian or Chinese made paracetamol, but all generics in my EU country I ever took from the pharmacy ware locally made Because it was synthesized using Chinese and Indian sourced "Active Pharmaceutical Ingredients" (APIs) [0], both of whom synthesize around 80% of all APIs required by European pharma manufacturers. The EU is trying to rectify this, especially after COVID when India decided to stop all exports of APIs and pharmaceuticals to Europe in order to prioritize domestic production [1], but it still takes time (they started in 2021, and it'll probably take another 5-7 years to build the critical mass needed to rebuild a domestic ecosystem). > Meanwhile I can't buy a locally made laptop, smartphone, GPU, it's all Asian made goods Becuase, as I have kept elucidating on multiple occasions on this thread, the entire ecosystem for these goods simply does not exist in Europe, and no European member state is interested in opening their pocketbooks to subsidize manufacturers to move to Europe in order to begin manufacturing the intermediate parts needed. Countries like those across ASEAN, South Korea, Japan, Taiwan, China, the US, and India offer millions to billions of dollars in hard cash, land, tax subsidizes, or a mix of all 3 in order to attract or retain manufacturers. EU member states simply does not do the same for electronics. Some of them absolutely do so for biopharma (such as Denmark), but by and large they tend to be exceptions of the rule. > Pharma gets special privilege over industries like cars, phones or semiconductors, since it deals with people's lives Ime, Pharma PLIs and incentives are fairly comparable to those that would be provided to electronic industries as well. The same tax sops India gave to attract Apple to TN were similar to those that India gave Novartis and Bayer decades ago, and China has been using the same subsidy program it used to attract electronics manufacturing to attract and become a major player in the biopharma space. [0] - https://pharmacia.pensoft.net/article/172383/ https://pharmacia.pensoft.net/article/172383/ [1] - https://www.statnews.com/2021/05/05/india-vaccine-heist-shoddy-regulatory-oversight-imperil-global-vaccine-access/ https://www.statnews.com/2021/05/05/india-vaccine-heist-shod...