The United Kingdom government has made the life science industry a focal point of its turnaround strategy, but data that have dripped out over the past few months show companies are spending less and less on developing and manufacturing drugs in the state.
Data released by the Office of National Statistics this week show the U.K.'s drug manufacturing output has fallen by a quarter over the period the government has held office, making it a net importer of medicines for the first time. The downward slide in manufacturing has been matched by the trend in R&D investment. Annual pharma R&D investment peaked at £4.9 billion ($7.5 billion) in 2011; since then it has fallen 17%. The £4.1 billion spent by the local industry on R&D in 2013 was the lowest amount since 2007.
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| U.K. Prime Minister David Cameron |
The slump isn't for lack of effort or attention from the government. Jo Swinson, a politician in the department of business, said this week that more civil servants are working on implementing the life science strategy than on any other industry bar construction. An estimate of the workload of civil servants released by Swinson shows 6.1 full-time equivalents are focused on life sciences, most of whom occupy fairly senior positions within the organization. Life sciences is the only sector to which the equivalent of one full-time grade 6 civil servant--the level below deputy director--is dedicated.
Parsing out the effect of this focus will prove tricky. And even if R&D investment starts to improve, the uptick might come too late for the current government to claim credit. Prime Minister David Cameron came to power at the high watermark for U.K. pharma R&D investment, after which cutbacks by the likes of Novartis ($NVS) and Pfizer ($PFE) rocked the industry. With the election coming up in May, it is possible he will be out of power by the time the transition he has tried to oversee takes full effect.
- read the FT feature (sub. req.)
- check out the R&D data
- view the FTE table