U.K. Pharma Industry Under Threat as Investment Shifts to U.S.
The U.K. government is facing a challenge in retaining its pharmaceutical industry, with other countries luring investments away. Lord Patrick Vallance, the Minister for Science, Innovation, Research and Nuclear, has acknowledged the need for a solution.
Pharmaceutical companies are increasingly investing in the United States, with major players like Roche, Bayer, Pfizer, and others announcing multi-billion dollar plans. This shift is due to incentives and challenges such as US tariff threats and underappreciation of innovation support by the UK government. Meanwhile, the U.K. life sciences sector has been losing credibility due to long-standing tensions between pharma and the government.
Talks between the U.K. government and pharma over the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) have collapsed, with the industry seeking more than just a resolution to the impasse. They want a commitment from the government to invest in innovation and provide a front door to the NHS for innovative medicines. The government proposed putting £1 billion into the market over three years, but talks broke down without an agreement.
The U.K. has seen a reduction in investment and jobs, with Sanofi's headcount decreasing from over 2,000 in 2013 to below 600. Meanwhile, other countries like the U.S., Belgium, Ireland, Singapore, and Germany are capitalizing on the U.K.'s failure to deliver change. Merck, AstraZeneca, and others have also reduced or paused investment plans in the U.K.
The U.K. government is under pressure to retain its pharmaceutical industry, with two U.K.-based multinational companies, AstraZeneca and GSK, employing close to 10,000 people each. Lord Vallance has acknowledged the need for a solution, and the government is facing calls to invest in innovation and provide market access terms that the industry wants.
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