Intangible assets in the European health industry: the case of the pharmaceutical sector

In this chapter, we analyse intangible assets in the pharmaceutical industry, in order to derive insights as to their nature and their determinants, as well as implications for the health industry model. We define intangible assets as knowledge and capabilities that, combined together and with tangible assets, generate innovation, increase productivity and value. This definition implies an emphasis on complementarities between assets and activities. The major implication of the analysis is to provide a deeper rationale for the health industry model. The latter model considers health as a system, between health case providers, financing organisations and health care producers (i.e. producers of drugs, medical apparels, etc.), because their separate consideration leads to the ignorance of important spillovers between the various parts. We show that the major source of spillovers appears to be the complementarity between tangible and intangible assets, and the rise of intangible assets observed in most industrialised countries over the last decades is the reason for the rise in spillovers in the health industry, hence the need to consider it as a system. Policy implications in terms of the competitiveness of the European pharmaceutical industry are also drawn.