UK pharmaceutical report highlights investment concerns for industry

The ABPI statement centres around the government-imposed medicine levy, with firms within the industry claiming that the this makes the country “uninvestable”. The concerns relate to the sustainability of the current levy, which requires companies to pay a portion of their revenue from branded medicines to the National Health Services (NHS).

The ABPI report, ‘Delivering a voluntary scheme for health and growth’(36 pages/2.5 MB), highlights that the levy, which can reach up to 35.6% of a company’s revenue, is far higher than similar schemes in other countries. For instance, France’s average payment rate is 5.7%, Italy’s 6.8%, and Germany’s 7.1%. This disparity has led to fears that the UK is becoming increasingly unattractive for pharmaceutical investment.

Catherine Drew, life sciences specialist at Pinsent Masons, said: “The sentiments shared do not make happy reading. A perspective that the UK is unattractive, uneconomical and uncompetitive as a market for global pharmaceutical companies will harm UK patients. Ultimately new medicines will not be launched in the UK and the NHS and most importantly patients will miss out. The impact is likely to be further reaching than simply for the newest products. If the new products are not launched then there is no market into which a generic medicine could be launched, and so the considerable savings made by the NHS in the use of generic medicines will not be realised.”

The pharmaceutical industry is a crucial part of the UK economy, contributing over £17.6 billion in direct gross value added (GVA) and generating £45 billion through research and development spillovers, according to the report (36 pages/2.5 MB). Industry leaders warn that the current levy is stifling growth and innovation, with leaders in the industry calling for immediate action from the government to address these issues.

In particular, the report calls for a commitment from the government to return payment rates to internationally competition levels, working with the industry to unlock the full potential of the UK pharmaceutical sector.