Global value chains and international pharmaceutical policy.

Area of Science:

• Biopharmaceutical Industry
• Health Informatics
• Digital Health

Background:

• The biopharmaceutical industry is undergoing rapid digitalization, driven by precision medicine and evolving healthcare paradigms.
• Measuring the integration and value contribution of Information and Communication Technology (ICT) within the life sciences sector is crucial.
• Understanding the interplay between the life science and IT industries is essential for assessing the changing value systems.

Purpose of the Study:

• To analyze the diffusion and value contribution of ICT within the global value chain (GVC) of the biopharmaceutical industry.
• To assess the extent to which ICT is integrated into chemical and pharmaceutical products and processes.
• To explore the economic implications of ICT adoption, including connectivity costs, in key global markets.

Main Methods:

• Utilized the Trade in Value Added (TiVa) dataset from the GVC-OECD project to analyze global value chains.
• Selected key indicators including foreign value-added share of gross exports and ICT imports in the chemical/pharmaceutical sector.
• Analyzed trade data for the chemical (including pharmaceuticals) and ICT industries across the USA, Switzerland, France, Germany, UK, and Japan.

Main Results:

• Information and Communication Technology (ICT) accounts for only 0.5% to 1% of the value added in final chemical and pharmaceutical products.
• The USA exhibits higher connectivity service prices compared to Japan and Germany, potentially reflecting its open innovation model.
• Analysis highlights the need for comprehensive data beyond traditional trade metrics to capture the full digital economy.

Conclusions:

• The rapid digitalization of life sciences necessitates the development of novel measurement approaches.
• Existing datasets like TiVa are valuable for specific IT components but insufficient for the entire digital economy.
• The global value chain concept, while useful, requires supplementary data on connectivity and ICT investments (e.g., EU KLEMS) for a complete picture in the biopharmaceutical sector.