The UK’s life sciences industry has experienced a “lost decade” in which its share of global investment and contribution to overall manufacturing growth have fallen, costing the economy about £45bn since 2010, according to the Institute for Public Policy Research.
The centre-left think-tank suggests that urgent action is needed if the sector is to play its part in sustaining the economy after Britain leaves the EU.
Successive prime ministers have trumpeted the contribution of life sciences, which contributes more than £30bn annually to UK economy, and claimed the country has unique strengths in the field that would help maintain its competitiveness globally after Brexit.
But the IPPR has found that since 2010, the UK’s ability to attract research and development spending in life sciences has declined, measured as a share of total global investment.
This equates to £15bn in funding going elsewhere with the US “a notable beneficiary,” the report found.
In 2016, the most recent year for which figures are available, UK R&D spending by pharma and biotech companies was £8.88bn compared with global spend of £126.8bn. In 2010 it was £9.49bn, while the global figure was a little over £102bn.
Over the same period, the value of pharmaceutical manufacturing has also stagnated relative to the growth of the wider UK manufacturing industry and as a results has contributed £29.5bn less to the economy than it would have done if it had kept pace, the researchers calculated.
The report criticised the government for failing to fully implement policies, such as those in the Life Sciences Industrial Strategy, aimed at boosting the sector. Nor had public investment in research and development risen fast enough, compared with expenditure in other advanced economies.
“This kind of long-term gain would more than justify a short-term outlay”, the IPPR said, adding the failure to support the sector had resulted in “a lost decade for an industry critical to the health and wealth of the nation.”
The uncertainty caused by Brexit has also weighed on the sector. More than 40 per cent of all UK medicinal products go to countries in the EU, making life sciences particularly vulnerable to reduced EU market access, the IPPR warned.
Worries about access to EU research programmes and clinical trials, freedom of movement for scientists and others in the field, the prospect of new tariffs and fears around the future regulatory regime and the level of alignment with mainland Europe were all dampening investment, it said.
Chris Thomas, who led the work, said that for all the rhetoric, successive governments had failed to implement policies to support the sector. “We must take immediate steps to mitigate Brexit, invest in research and implement existing commitments,” he said.
Among the measures it is calling for are: the maintenance of free movement for key life science workers; a co-operation agreement enabling continued access to EU funding programmes; and regulatory alignment and close working relationships with EU bodies, to ensure UK researchers and patients can continue to take part in clinical trials.
Secure seamless trade, equivalent to current levels, for pharmaceutical, medicinal and health technology products was also critical.
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