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UK pharma concerned about the future

Confidence in the future of the UK pharma industry has reached a significant low point, the Association of the British Pharmaceutical Industry (ABPI) announced in London on March 19.

Confidence in the future of the UK pharma industry has reached a significant low point, the Association of the British Pharmaceutical Industry (ABPI) announced in London on March 19. A survey by ComRes, an independent research company, showed that 83 per cent of pharma companies polled believed the market environment will deteriorate over the next 12 months. During a joint press conference with the ABPI and the Confederation of British Industry (CBI), details of the survey indicated that pharma is concerned about the future level of R&D investment.

Factors such as the credit crunch, market instability and the latest concerns on the Government's position on the Pharmaceutical Price Regulation Scheme (PPRS) are said to behind pharma's concerns. John Cridland, deputy director general of the CBI, said: ìDespite our considerable strengths, in this Fair Isle, on pharma, we face some big challenges. "Self evidently, in an increasingly globalised economy, competition is getting fiercer day by day."

A total of 101 pharma companies responded to the ComRes survey that asked questions about their level of confidence for the future of pharma in the UK. Just over three quarters of the respondents said that they are not confident in the UK pharmaceutical market environment.

The ABPI and the CBI want to send a clear message to the Government that pharma R&D in the UK could face dramatic decline if investment levels are not maintained. Nigel Brooksby, president of the ABPI, said: "There is certainly a flattening of the investment we are attracting into the UK.

"We are very good at attracting investment and very good at using that investment but this is certainly not a time to become complacent." Cridland said: "There is a real danger that all of us outside the industry, the broader economy, government, and public policy makers, could take this industry for granted.

"It [pharma] is a world class industry and there are very deep routed reasons why it is based in the UK, but that base could be damaged if the Government takes the wrong decision."

Although UK pharma accounts for only 3 per cent of the global market, it attracts 10 per cent of the world's medicines R&D investment, accounting for a quarter of the UK's research sector. In total, the UK can lay claim to producing 18 per cent of the world's innovative medicines, remaining the second most important source globally of new drugs, surpassing countries such as Germany, Japan, and France.

Brooksby said: "It is the basic research and development which is the future of that [pharma] sector. That is what is going to make a real difference to the lives of patients, save lives, change lives.

"That is what I want to make sure we have not become complacent about in the UK. I would like to see even more investment coming into the UK; 10 per cent is fine but why stop at 10?"

Just over a third (35 per cent) of the companies polled said that they are expecting the level of R&D investment to decrease with 42 per cent of them forecasting a decline in the amount of UK-based drug manufacturing.

Dr Richard Barker, director general of the ABPI, said: "There isn't any sign yet that the UK is becoming a more innovative market and taking up new medicines more rapidly."

UK pharma currently employs 70,000 people, 40 per cent of whom work in R&D, but job losses have already occurred across the industry with more cuts threatened due to market instability and investment woes. PPRS Termination Last week the Government formally announced that it has terminated the current five year deal on the PPRS and intends to enter into renegotiations.

The PPRS has been in place for 50 years and has served as an important way for the Government to cap pharma profits, passing on the saving to the taxpayer, but also as a means of stability for predicting investment and R&D activity in the UK.

News that the PPRS could be scrapped by the Government has heightened concerns for pharma and Dr Barker said "that has to be in the minds of the executives responding" to the survey. The Government gave formal notice in March that it intends to renegotiate the PPRS but has stipulated September 2008 as the month in which discussions on the matter are expected to be completed.

Dr Barker said: "This is the first time that the Government said they wish to terminate the existing deal and renegotiate. "The discussions are much broader than they have ever been before. Our goal and I hope it's also Government's goal is to get to a mutual agreement on these principals as soon as we can."

When asked if the impact would be felt greatest by the NHS consumer or the pharma industry, Dr Barker said: "The impact on the consumer, i.e. the patient is an indirect one but still one in the long term."

"The quality of the medical schools, their ability to attract the best students themselves to work at their school eventually has an impact on the top of the medical pyramid. So you don't want to have a third world medical system - that won't benefit anybody."

Cridland said: "With almost £4bn of annual R&D spend, the sector is the flagship for wider innovation in the UK, and a bellwether for the UK's ability to thrive in a knowledge-based economy in the future."

20th March 2008

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