Could The UK Be Losing Its Pharma Luster? - Pharmaceutical Technology

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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?


Pharmaceutical Technology Europe
Volume 23, Issue 5

What next?

The UK's Ministerial Industry Strategy Group (MISG) continues to meet twice a year as part of the follow-up to the implementation of the PICTF recommendations. The latest review available from PICTF is for 2009, and it paints an optimistic view for the UK (8). Key highlights include the fact that the UK's corporate taxation rates are more favourable than those of the US and Japan, and that there is an upward trend in annual numbers of new graduates in subjects considered relevant to the UK pharma industry. The report also focused on the fact that 16 of the world's top-selling 75 medicines were discovered and developed in the UK — more than any other country except for the US. In light of the closure of Pfizer's Sandwich facility, which was often considered the jewel in the crown of UK R&D because of its role in development of a certain Pfizer blockbuster, it will be interesting to see what the next PICTF report contains.

The reaction of the government to Pfizer's decision will beimportant for a number of reasons. A primary concern is the economic impact that the closure will have on the local economy in Kent. Not only is the company a major employer in the area, but many other local businesses supplying goods and services depend on its presence for their own viability. Initial estimates suggest that outside Pfizer, 3000 extra jobs could be lost when contractors and other small businesses lose a major source of their revenue (9). The government has said that it will seek to preserve R&D activity in the area through discussions with other firms in the pharmaceutical sector, but it is difficult to see why such companies would commit themselves to high level investment in Sandwich, given that Pfizer has exited despite its long association with the area (10).

Other multinational pharmaceutical companies will be watching closely as they weigh up decisions to streamline their own operations. Although GSK's CEO, Andrew Witty, recently stated that Pfizer's decision had nothing to do with the UK business environment, there must be considerable unease over what lies ahead for the domestic industry (11). The UK Government's efforts to implement costcontainment measures have tended to be more direct in recent years, such as price cuts, which have angered companies. In 2008,the ABPI warned that the pharma industry had cut UK jobs by 10% over the previous three years because of the pricing environment, and claimed that there was a "direct link between job cuts and changes to the pricing mechanism" (12).

It certainly seems as though pharma companies are not happy with the UK at the moment and, as with most things, the likes of Pfizer will vote with their feet.

References

1. BBC, Pfizer to close UK research site (2011). http://www.bbc.co.uk/

2. EFPIA, The Pharmaceutical Industry in Figures (2010). http://www.efpia.eu/

3. ABPI, The pharmaceutical industry in the UK (2011). http://www.abpi.org.uk/

4. UK Department of Health, "Pharmaceutical Industry Competitiveness Task Force" (2001). http://www.dh.gov.uk/

5. Department of Health, "Pharmaceutical industry competitiveness and performance indicators" (2010). http://www.dh.gov.uk/

6. EurActiv, "G10 Medicines Group makes recommendations to enhance pharmaceutical competitiveness" (2002). http://www.euractiv.com/

7. European Commission, "High Level Group on innovation and provision of medicines" (2002). http://ec.europa.eu/

8. Bioscience Innovation and Growth Team, "Bioscience 2015" (2004). http://www.bioindustry.org

9. Business For Kent, "Shockwaves of Pfizer closure will be felt across Kent" (2011). http://www.businessforkent.co.uk/

10. InPharm, "Pfizer's CRO plans for Sandwich will have limited impact" (2011). http://www.inpharm.com/

11. Sky News, "Glaxo Backs UK After Rival's Plant Closure" (2011). http://news.sky.com/

12. The Telegraph, "UK Drug firms to slash workforce by 10pc" (2008). http://www.telegraph.co.uk/


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