Recommendations from Imperial College London to improve UK’s biopharma industry
Imperial College London has published new recommendations to boost the UK’s competitiveness across Biopharmaceuticals, Medtech and Telecommunications.
The ‘Sectoral Systems of Innovation and the UK’s Competitiveness’ reports assess the value-added per capita of each sector and how they compare internationally. The reports, authored by academic experts from Imperial College London, identify technological solutions and policy recommendations for government and industry to make the sectors more innovative and increase their value added.
The UK is faced with a dramatic slowdown in its rate of economic growth which is largely due to the declining rate of innovation and competitiveness of key sectors of the economy. This problem is common across G7 countries, and many are responding with a more active industrial policy to help drive economic growth. Notably, the US Administration’s CHIPS and Science Act and Inflation Reduction Act are designed to bolster US competitiveness and national security in key sectors such as renewable energy and semiconductors.
Policymakers are increasingly interested in sector-based policies to solve the UK’s own productivity problem. This kind of targeted support in areas such as R&D, skills and finance requires a clear understanding of what is going on in specific industries and what is needed to increase their value added per capita. Over the past year, joint teams from Imperial College London’s Faculty of Engineering and Business School have looked in detail at the competitiveness of the UK’s Biopharmaceuticals, Medical Technology and Telecommunications sectors.
Common themes across all three sector reports are the need to:
- Create more innovative, collaborative and flexible regulatory environments that can align with key markets such as the EU and US where beneficial;
- Anticipate the opportunities and challenges posed by rapid advances in digital technologies;
- Raise innovation productivity through targeted policy interventions and, where appropriate, the adoption of new business models.
The launch of the reports follows the Inaugural Innovation and Growth Conference 2023 earlier this year, which brought together policymakers, academics and industry representatives to discuss how to increase UK productivity and competitiveness.
At EPM, we concentrated our focus on the pharmaceutical industry. Therefore, we will be presenting their findings and suggestions as they relate to the pharmaceutical/biopharmaceutical industry:
The UK has a strong and longstanding reputation for the life sciences, two world-leading pharma companies, and many small start-ups and new players. The biopharma sector contributes a GVA of around £15 billion annually to the UK economy and 400,000 jobs. The sector has a 3.36% compound annual growth rate (CAGR) since 2016. However, there are concerns about sustaining the sector's global competitiveness.
Pharmaceutical companies around the world are experiencing pressures associated with the declining productivity of drug R&D, tightening regulations, and downward price pressure by health systems and governments seeking better value for money. But several homegrown challenges also threaten to derail the UK’s ambitions in this sector. These include a decrease in clinical trials conducted in the NHS, which raises concerns about the attractiveness of the UK for launching new drugs, regulatory divergence between the UK and other major markets, slower access to newly approved medicines compared to some other countries, and the erosion of the drugs manufacturing sector.
Despite a strong research base and an emerging data science sector targeting pharma R&D, the UK has not been successful in growing large UK biopharma companies - the sector is dominated by small and medium-sized enterprises (SMEs) that are frequently acquired by companies from the USA or elsewhere before they scale-up.
To address these challenges and enhance the sector's future ability to create strong and dynamic biopharma companies, policymakers should focus on regulatory clarity and harmonisation, particularly with the European Union, NHS procurement practices, fostering the emerging data science sector, and considering how a high-value drugs manufacturing sector can be supported.
The report also calls for policymakers to improve financial support for the scale-up of promising small companies or risk early technologies and IP being sold prematurely to foreign companies.
Overall, the goal for government must be an integrated national life sciences R&D ecosystem which supports drug discovery, early clinical development, and uptake into healthcare, reducing R&D development cycles and costs, and ultimately producing more attractive investment opportunities.