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A stiffening dose of Viagra is just what the coalition’s economic growth strategy could do with, according to some business leaders.
What it did not need was an announcement by Pfizer that it was closing its historic research centre in Kent – where the erectile dysfunction treatment and other successful drugs were developed – putting 2,400 jobs under threat.
Closure of the Sandwich facility is not only a serious blow to drug development in the UK. It underlines the challenge the government faces in trying to speed recovery and create private sector jobs to replace at least 330,000 likely to be lost in the public sector over the next four years.
Professor Sir Richard Sykes, former chairman of GlaxoSmithKline and chairman of the Royal Institution, said: “It is worrying that a major life sciences company pulls its R&D facilities out of the UK when this is an area in which we excel and wish to expand.”
Pfizer did not blame government policy for the closure, part of a cost-cutting overhaul of its research and development operations worldwide.
Pharmaceutical giants have been struggling with pressure on prices, patent expiries and faltering drug development programmes. But it is another setback in a sector that had long been a UK strength.
The Royal Society of Chemistry estimates that nearly 6,000 jobs have gone in the past year from UK drugs and science companies – though GSK has also pledged a £500m investment that could create 1,000 jobs after the government promised a “patent box” tax break which slashes the rate of corporation tax on profits generated from UK-owned intellectual property.
Last month, in a speech in Manchester, David Cameron placed pharmaceuticals among five sectors that it was “crucial” to get behind, saying the patent box would encourage companies to invest.
“And I have personally been on the phone to some of the biggest pharmaceutical companies, like Amgen, like Pfizer, to encourage them to do just that,” the prime minister said.
But Sir Richard Lambert, in his parting shot as director-general of the CBI employers’ group last week, accused the government of failing to articulate a vision for growth. He lambasted ministers for dribbling out “a few vague ideas” in support of “predictable sectors”.
Sir Richard and his successor, John Cridland, are urging a more subtle strategy that focuses on nurturing small mid-cap companies with potential for high growth, which are not necessarily high-technology.
The coalition insists it has policies for the so-called “gazelles” or fast-growth enterprises: it plans a scheme to offer them coaching to overcome barriers and grow more rapidly. The government has also launched a “growth review”, promising concrete action in the March Budget.
Closure of Pfizer’s Sandwich facility – a symbol of successful British drug development from its origins in the mid 1950s – will only intensify pressure for a convincing strategy.