Lost Decade For Vital Life Sciences Industry Has Cost UK Economy £45 Billion, Says IPPR

IPPRNo-deal Brexit cliff edge would heighten risk to health and medicines industry after surprise new figures, think-tank warns

New analysis by IPPR shows that the UK has missed 10 years of opportunities to create a flourishing life sciences industry, meaning a lost decade for an industry critical to the health and wealth of the nation.

IPPR has compared the UK’s performance at the beginning and end of the decade on life science – the medicines and health science industry often hailed as a national success story. This includes new analysis on the UK’s ability to attract global research spend to this country, and on supporting a strong manufacturing industry. Disappointingly, despite consistent government promises and commitments, performance has stagnated, the research found.

The report suggests that the government has been slow in implementing policies, such as those in the Life Sciences Industrial Strategy, that could have boosted the sector. At the same time, public investment in research and development has not risen fast enough, compared to expenditure in other advanced economies.

Combined with the looming threat of Brexit, this has created an urgent need for ambitious action to support a life science industry critical to 482,000 jobs and which provides £30.4 billion/year to the UK economy. The alternative is further decline in both the health and wealth of our nation, warns IPPR.

The analysis found:

  • Since 2010, the UK’s ability to attract global life science research and development spend has declined, measured as a share of total global investment. This means that £15 billion that would have been invested in the UK if its share had been maintained has been channelled elsewhere, with the USA a notable beneficiary.
  • Over the same period, the value of pharmaceutical manufacturing has also stagnated relative to the growth of wider UK manufacturing industry. This means it has contributed £29.5 billion less to the economy than if it had kept up.
  • Combined, this means a £45 billion hit to the economy since the beginning of the decade.
  • Going forward, things are so bad that the UK economy will receive £9.6 billion less per year going forward than if the life science sector’s economic performance had just been maintained.
  • These trends are particularly worrying given the prospective impact of Brexit, with a no-deal Brexit predicted to by the Office for Budgetary Responsibility to cost the economy £30 billion annually. Whatever form Brexit takes, it is increasingly urgent for the UK to do more to capitalise on the value the life sciences can bring to the economy.
  • IPPR found that a no-deal Brexit could have significant impacts on the life science workforce and on the industry’s ability to trade seamlessly, access research funding and participate in the most exciting international research collaborations. Without new measures the UK’s life science industry faces further damage.
  • Failing to act, IPPR warns, would mean less exciting science developed in the UK, less access for patients to clinical trials of new drugs, fewer treatments produced domestically, fewer skilled jobs within life science manufacturing and slower access by the NHS to more expensive medications.

Urgent action, IPPR argues today, should include making the NHS an active partner in health innovation, rapidly implementing existing commitments from the Life Sciences Industrial Strategy and taking measures to reduce the impact of Brexit on this sector.

In its new report, A Lost Decade, IPPR proposes four tests for the UK government to ensure the nation’s life science industry is safeguarded from the most damaging impacts of Brexit:

  • People: Maintain free movement for key life science workers, including leading scientists and those critical to the manufacturing supply chain.
  • Money: Achieve a cooperation agreement enabling continued access to EU funding programmes. Failing this, it must make good on any lost EU funding for life science researchers.
  • Regulation: Ensure regulatory alignment and close working relationships with EU medicinal regulatory bodies, to ensure UK researchers and patients can continue to take part in clinical trials.
  • Trade: Secure seamless trade, equivalent to current levels, for pharmaceutical, medicinal and health technology products – recognising that they are particularly vulnerable to obstruction or market changes. Imposition of tariffs and delays to trade would jeopardise the UK’s position as a life science hub, the report warns.

The UK’s lost decade in the life sciences

Chris Thomas, lead author of the report and an IPPR Research Fellow, said:

“As we stand on the precipice of a no-deal Brexit, it is alarming to see government failing to capitalise on our long-standing economic strengths like the life sciences.

“This research shows that one of our most important industries has been allowed to fall behind compared to our global competitors, and the rest of UK manufacturing.

“For all the rhetoric, governments have failed to implement policies to support this critical sector. If we hope to maintain our levels of health and wealth into the next decade, we must take immediate steps to mitigate Brexit, invest in research and implement existing commitments. There is a clear onus on government to take decisive action – now.”

 

 

 

 

 

 

 

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