Cancelled or paused investments in UK pharmaceutical R&D – from Merck & Co, AstraZeneca (AZ), Eli Lilly and others – highlight the precarious position of the country’s life sciences industry. The UK has a world-class academic base in its universities and research institutes, but that alone isn’t enough to convince multinational companies to choose to invest in UK facilities rather than elsewhere.
When questioned by the UK government’s science and technology committee this week, representatives from Merck and AZ made it abundantly clear that these decisions were significantly influenced by the UK’s restrictive rules on paying for new (and therefore expensive) drugs through the National Health Service. However, the moves also reflect frustration at what companies have characterised as a longer-term decline in support for innovation within the industry – across a range of factors including spending on new drugs, but also policies around immigration of top talent, ease of performing clinical trials, speed of regulatory assessment and financial incentives for research. The UK’s significance as a stand-alone pharmaceutical market has also decreased since leaving the EU.
The global pharmaceutical industry is in the middle of a significant belt-tightening phase, with several major companies – including Merck & Co – restructuring to cut costs. That puts pressure on investments to demonstrate the best possible value, with companies looking to deploy their available cash in areas where it attracts government support, and in the most industry-friendly environments. US president Donald Trump’s shake-up of trade policies also has many large companies committing to significant investments in US manufacturing and R&D.
While Merck’s investments have been cancelled outright, AZ and Lilly’s are – so far – only ‘paused’. It’s possible that those announcements are part of tactical negotiations to encourage the UK government to increase its support. However, in a rapidly changing commercial environment, it’s not hard to imagine an attractive prospect coming up, and those pauses being extended, potentially indefinitely.
That’s not to say the government should rush to shower pharmaceutical firms with everything they ask for. It doesn’t have the money, for a start. But perhaps there is room for more reasoned negotiations around some of the most pressing issues. By all accounts, company executives recognise the UK’s quality and potential, and see value in retaining close relationships with the UK’s research base – providing some of the systemic barriers can be at least lowered, if not removed.
No comments yet