The 2012 UK Life Science Industry Leaders Survey* highlights a concern that the UK is losing its position as a center for global R&D. Nick Stephens, chief executive of executive search organization RSA, presents results from the survey and draws out some themes that are relevant to the industry as a whole.
These are challenging times for the UK life sciences industry as it copes with a host of issues. Some of these are impacting the industry worldwide and others, such as the reorganization of the UK’s National Health Service (NHS) and the introduction of new commercial arrangements, are specific to the UK.
Enjoying this article? Have the leading Biopharma news & analysis delivered daily on email by signing up for our FREE email newsletter here.
Recurring throughout the report is a palpable concern that the UK could lose its position as a center for global pharmaceutical research and development. There is a belief that government could be doing more to support the industry, as this extract from the “Wave a Magic Wand” section of the survey suggests:
“Put a big flag on the cliffs of Dover and say the UK is open for business and welcomes world-class clinical research back to our shores. Get all the NHS Trust CEOs in a room and tell them that their jobs are on the line unless they get fully square behind the NHS, supporting and embracing research. Make rates of corporate tax and tax credits the envy on research the envy of the world.”
The survey is now an annual feature of the UK Life Sciences sector, so it is interesting to look back and see how, if at all, things have changed over the last 12 months. In 2010 the three key messages from life science leaders were:
• The UK is not competing effectively in the global marketplace
• Create the right environment for growing early phase, smaller companies
• Make the most of the NHS and a talent for innovation and discovery
2010 also highlighted four key issues: the cost of operating in the UK, reorganization of the NHS, regulatory burdens, and fiscal and tax incentives to enable small companies to grow.
Some targeted support for R&D
The government has made progress on this last point in terms of providing some targeted support for R&D. Foremost amongst these is the Patent Box scheme, which applies a 10% corporation tax rate to profits derived from all active patents from April 2013. This does give an incentive for companies in the UK "to retain and commercialize existing patents and to develop new innovative patented products."
There have also been new tax credits for R&D, whereby a company can set tax against National Insurance contributions and income tax. This is ideal for small biotechnology companies which tend not to make profits but instead innovate toward acquisition by larger companies. Another positive sign has been the £800 million ($1.25 billion) invested in the National Institute for Healthcare Research.
These rays of sunshine in an otherwise overcast economy have done little to raise the spirits of UK life science leaders. In 2010, 60% were optimistic about the government’s engagement with and support for the industry, but in the space of 12 months, half of these lost faith. Now just one in three general managers has a positive outlook; and this amongst a group that tends to exude a positive attitude no matter what the challenge.
Gauging value of new therapies
Further into the survey, the causes for concern become more concrete. Payer evidence mechanisms - gauging the value of new therapies across a range of criteria - are becoming an increasingly common feature of health care management and the UK is no exception. This year we polled leaders on the new UK value-based pricing system and the results were not positive. Three out of five felt that it would reduce market access (and therefore patient access to novel drugs). Over half felt that it would cause the UK to fall behind as an early launch market; 70% felt it would delay launches in the UK and 40%, that it would reduce return on investment.
The reorganization of the NHS and the associated changes to the model of engagement is a major issue in the UK because during the periods of change everything grinds to a halt. It exacerbates an already difficult situation where multiple “hurdles” limit patient access to novel and effective medicines. It’s a far cry from the days when a representative sat down and talked to a doctor who would then decide whether to prescribe a particular drug.
When it came to suggesting solutions for some of the current challenges, respondents highlighted the need for flexibility (organizations and process) and innovation. Central to this is the current enthusiasm for “open innovation” with external partners - for example R&D scientists in universities, small biotech companies, even competitors - to achieve new therapies and medicines.
Fears on off-shoring
In the UK’s preclinical R&D, there were concerns about off-shoring (90%), the cost of pre-clinical research (74%) and increasing regulation (64%). In clinical research and regulatory affairs, concerns center on the impact of NHS changes (90%), the cost and speed of clinical trials in the UK (81%), and increasing regulatory burden (68%).
The real concern for the UK pharmaceutical business is that business will go offshore. Pfizer’s decision to move its anti-infectives business to Shanghai (though recent changes in China may indicate a silver lining) was proof that the alarm bells were for real. Moving to emerging markets may no longer give huge cost-savings but it remains a very real threat to the UK
The general message from the survey is that the UK is doing itself few favors when it comes to making itself an attractive place to undertake clinical trials.
The UK is still the biggest and most appropriate current set up for research and development but it is going to have to do a lot more if it is to retain this position. Central to this is the alignment of the health care sector, regulatory environments and educations systems, to deliver positive outcomes for both patients and the industry. If the UK doesn’t do this, there are others that will. And it will be their patients and economy that benefit, Mr Stephens concludes.
Source:
thepharmaletter.com
These are challenging times for the UK life sciences industry as it copes with a host of issues. Some of these are impacting the industry worldwide and others, such as the reorganization of the UK’s National Health Service (NHS) and the introduction of new commercial arrangements, are specific to the UK.
Enjoying this article? Have the leading Biopharma news & analysis delivered daily on email by signing up for our FREE email newsletter here.
Recurring throughout the report is a palpable concern that the UK could lose its position as a center for global pharmaceutical research and development. There is a belief that government could be doing more to support the industry, as this extract from the “Wave a Magic Wand” section of the survey suggests:
“Put a big flag on the cliffs of Dover and say the UK is open for business and welcomes world-class clinical research back to our shores. Get all the NHS Trust CEOs in a room and tell them that their jobs are on the line unless they get fully square behind the NHS, supporting and embracing research. Make rates of corporate tax and tax credits the envy on research the envy of the world.”
The survey is now an annual feature of the UK Life Sciences sector, so it is interesting to look back and see how, if at all, things have changed over the last 12 months. In 2010 the three key messages from life science leaders were:
• The UK is not competing effectively in the global marketplace
• Create the right environment for growing early phase, smaller companies
• Make the most of the NHS and a talent for innovation and discovery
2010 also highlighted four key issues: the cost of operating in the UK, reorganization of the NHS, regulatory burdens, and fiscal and tax incentives to enable small companies to grow.
Some targeted support for R&D
The government has made progress on this last point in terms of providing some targeted support for R&D. Foremost amongst these is the Patent Box scheme, which applies a 10% corporation tax rate to profits derived from all active patents from April 2013. This does give an incentive for companies in the UK "to retain and commercialize existing patents and to develop new innovative patented products."
There have also been new tax credits for R&D, whereby a company can set tax against National Insurance contributions and income tax. This is ideal for small biotechnology companies which tend not to make profits but instead innovate toward acquisition by larger companies. Another positive sign has been the £800 million ($1.25 billion) invested in the National Institute for Healthcare Research.
These rays of sunshine in an otherwise overcast economy have done little to raise the spirits of UK life science leaders. In 2010, 60% were optimistic about the government’s engagement with and support for the industry, but in the space of 12 months, half of these lost faith. Now just one in three general managers has a positive outlook; and this amongst a group that tends to exude a positive attitude no matter what the challenge.
Gauging value of new therapies
Further into the survey, the causes for concern become more concrete. Payer evidence mechanisms - gauging the value of new therapies across a range of criteria - are becoming an increasingly common feature of health care management and the UK is no exception. This year we polled leaders on the new UK value-based pricing system and the results were not positive. Three out of five felt that it would reduce market access (and therefore patient access to novel drugs). Over half felt that it would cause the UK to fall behind as an early launch market; 70% felt it would delay launches in the UK and 40%, that it would reduce return on investment.
The reorganization of the NHS and the associated changes to the model of engagement is a major issue in the UK because during the periods of change everything grinds to a halt. It exacerbates an already difficult situation where multiple “hurdles” limit patient access to novel and effective medicines. It’s a far cry from the days when a representative sat down and talked to a doctor who would then decide whether to prescribe a particular drug.
When it came to suggesting solutions for some of the current challenges, respondents highlighted the need for flexibility (organizations and process) and innovation. Central to this is the current enthusiasm for “open innovation” with external partners - for example R&D scientists in universities, small biotech companies, even competitors - to achieve new therapies and medicines.
Fears on off-shoring
In the UK’s preclinical R&D, there were concerns about off-shoring (90%), the cost of pre-clinical research (74%) and increasing regulation (64%). In clinical research and regulatory affairs, concerns center on the impact of NHS changes (90%), the cost and speed of clinical trials in the UK (81%), and increasing regulatory burden (68%).
The real concern for the UK pharmaceutical business is that business will go offshore. Pfizer’s decision to move its anti-infectives business to Shanghai (though recent changes in China may indicate a silver lining) was proof that the alarm bells were for real. Moving to emerging markets may no longer give huge cost-savings but it remains a very real threat to the UK
The general message from the survey is that the UK is doing itself few favors when it comes to making itself an attractive place to undertake clinical trials.
The UK is still the biggest and most appropriate current set up for research and development but it is going to have to do a lot more if it is to retain this position. Central to this is the alignment of the health care sector, regulatory environments and educations systems, to deliver positive outcomes for both patients and the industry. If the UK doesn’t do this, there are others that will. And it will be their patients and economy that benefit, Mr Stephens concludes.
Source:
thepharmaletter.com
0 comments:
Post a Comment