As Britain underperforms against global trends for pharma investment and research, yet another pharmaceutical giant scraps plans to invest in the UK.
As US pharmaceutical giant Merck scraps plans for a £1 billion research centre in London and plans to make 125 scientists redundant, Britain continues to tumble down global rankings for pharma investment and research.
Since 2018, UK pharmaceutical r&d investment has underperformed against global trends, with a significant slowdown starting in 2020, when UK growth fell to 1.9% a year, behind the global average of 6.6% annual growth. Pharmaceutical industry investment in r&d actually fell in 2023 by nearly £100 million.
Life sciences foreign direct investment into the UK was around 58% lower in 2023 than in 2017. Britain’s ranking among comparator countries fell from a high of second in 2017 to seventh place in 2023.
“The UK has a world-class science base and the potential to lead globally in developing the next generation of medicines and vaccines. But without a more competitive environment for investment, we risk losing out to other countries making bold moves to attract internationally mobile investment,” said Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry (ABPI) at the launch of its new pharmaceutical competitiveness framework.
To lose one drug manufacturer…
The damning framework stands in contrast to the government’s Life Sciences Sector Plan, launched only a month ago. Part of the government’s industrial strategy, it set out a ten-year mission to harness British science and innovation to deliver economic growth and a stronger, prevention-focused NHS. Then science and technology secretary Peter Kyle called the sector “one of the crown jewels of the UK economy”.
Instead, the framework was released to news that Merck had mothballed its £1 billion research centre in London. Due to open in 2027, construction has already started, though the US pharmaceutical giant is walking away by the end of the year.
In a brutal statement, the firm said that Britain is “not internationally competitive” and it complained about the “lack of investment in the life science industry and the overall undervaluation of innovative medicines and vaccines by successive UK governments.”
“We’ve really got to see it as a wake-up call to try and understand what is driving companies to make these difficult decisions and what can we do to turn that round,” Torbett told the BBC’s Wake Up To Money programme.
The news from Merck comes on the back of AstraZeneca’s announcement in February that the pharmaceutical firm had halted a planned £450 million investment in Speke after the government pulled back from the previous government’s offer of support.
Seen as uninvestable
Most perturbing of all is that Britain’s pharmaceutical sector understands Merck and AstraZeneca’s reasoning.
“The UK life sciences sector’s inherent strengths are being undermined as other countries outpace the UK in securing global investment,” said Steve Hopkinson, vice president and general manager of AbbVie UK.
“For government to achieve its ambition for the UK to be a top three global life sciences economy, as laid out in the Life Sciences Sector Plan, it must address longstanding underinvestment in innovative medicines and high clawback rates which continue to erode confidence in the UK,” he continued.
Guy Oliver, general manager of Bristol Myers Squibb UK and Ireland, said that the critical question is whether the government will respond with reform and funding that match the scale of the challenge.
“But this opportunity will slip away if the government does not urgently address the growth-limiting barriers our sector has consistently highlighted. These barriers are damaging patient access to innovation available in other countries, dampening investor confidence, creating broader contagion risks internationally, and restricting our ability to conduct trials in the UK,” he said.
The problem is, said Rippon Ubhi, UK & Ireland country lead and general manager of speciality care at Sanofi, is that the UK is increasingly being viewed as “uninvestable” within global boardrooms, a result of clawback rates and restrictive patient access to medicines.
“While other countries are actively investing in innovative medicines for patients, the UK is falling behind,” she said.
