April 21, 2013 8:42 pm

Healing the UK pharma industry

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Ideas for more active intervention deserve broader debate

Just as new tax incentives designed to support the pharmaceutical industry in the UK come into force, some leading scientific societies are warning that drugmakers in the country risk decline akin to that of the car industry in the 1980s without more active intervention. Their ideas deserve broader debate.

AstraZeneca’s decision last month to reduce sharply the headcount at its Alderley Edge research unit was the latest in a series of cutbacks affecting historic centres of drug innovation including Pfizer’s site at Sandwich.

Drug companies make a significant contribution to the UK economy through employment, investment in research and export earnings. Formidable UK researchers – such as the late Sir James Black and Sir David Jack – have been followed by a subsequent generation whose names are on the patents of many of the world’s life-saving drugs tackling everything from heart disease to cancer.

Yet that base is being eroded as domestic cuts and the industry’s globalisation weaken the UK’s expertise. The Royal Society of Chemistry, for instance, has seen a drop of more than a fifth in the number of its members working in pharmaceuticals, where most medicinal chemists are employed.

If Britain is to rebalance its economy away from finance and towards manufacturing, much will depend on rekindling the performance of traditionally strong sectors such as pharmaceuticals.

The government has taken steps, including the introduction of new research tax credits and the “patent box”, with success, notably in promoting fresh investment in manufacturing within the UK such as by GlaxoSmithKline.

The country remains attractive for research, as highlighted by AstraZeneca’s decision to offset job losses at Alderley Edge with new employment in Cambridge, which will also become the location for its global headquarters.

Yet the Society of Biology and others argue there are weaknesses, notably in translational medicine, which converts research discoveries into potential drugs by more effectively identifying “targets”, compounds and patients in which to test them.

Such learned societies rightly steer clear of the need for new investment in buildings, stressing instead the need for the creation of therapeutic centres of excellence with a strategic focus and strong leadership built on the model of Cancer Research and the University of Dundee.

The centres require greater communication, collaboration and networking skills, with units combining the best of academia and industry and freed from some of the isolation of both and with greater incentives for specialists to move between the two worlds. A precondition is a willingness to pay industry-level salaries and to reduce universities’ traditional recruitment bias towards those with publications to their name.

The EU’s Innovative Medicines Initiative to fund early stage pre-competitive consortiums, and the UK’s centralised National Health Service offer potential for greater work in early stage development and late-stage testing in patients.

Ultimately, governments can only tinker around the edges. The UK’s car industry was revitalised partly because there were more productive producers, such as some in Japan, willing to invest in the country. In pharmaceuticals, the global model is increasingly under strain with rising costs and falling productivity. No country can claim to have developed a better model.

The US is likely to outstrip for a long time other nations with its large-scale funding for basic science and its concentration of risk capital. Other countries including the UK can nurture advantages in other niches as long as they avoid the dangers of trying to create burly national champions.

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