Could The UK Be Losing Its Pharma Luster?

Despite initiatives to encourage multinational pharma companies to conduct R&D in the UK, the country may be losing its edge; is Pfizer's decision to exit a key site earlier this year the beginning of a mass exodus?
May 01, 2011


Nathan Jessop
When Pfizer decided to close its R&D site in Sandwich it renewed concerns over the UK's attractiveness to the pharma industry. The site employs 2400 people and although Pfizer has stated that some positions will be transferred to other sites or to other companies working with Pfizer, it is expected that most staff will be made redundant over the next two years (1).

Historically, the UK has been one of the leading forces in the world of pharmaceuticals. The pharma industry is also a major contributor to the country's economy. The job losses at Pfizer have come at an unfortunate time with the UK economy still emerging from recession and unemployment remaining high. According to the European Federation of Pharmaceutical Industries and Associations (EFPIA), the innovative pharmaceutical industry is an "important engine of economic recovery", which means that the UK can ill afford to lose investment from a company of Pfizer's size and stature (2). It's not just Pfizer either; a number of other companies have announced cuts in the UK, including AstraZeneca, GSK and Novartis.

The pharma industry's economic importance to the UK is illustrated by figures from the Association of the British Pharmaceutical Industry (ABPI), which show that the industry has been a net earner for the country for the past 30 years (3). In 2009, the pharmaceutical industry invested £4.4 billion (€5 billion) in UK R&D and employed 72?000 staff. For a number of years, however, EFPIA has been concerned about a drift in investment away from Europe to the US and to the fast-growing economies of Brazil, China and India (2). According to EFPIA, excessive interventions by European national governments to control healthcare expenditure have dented multinational pharma companies' confidence to invest in the region. The organisation will, no doubt, be alarmed by Pfizer's decision to downgrade its investment in the UK, and the fact that it may prompt other large companies to reconsider their presence in the country.