Science & Technology Committee: Written evidence
Pfizer’s decision to close its research and development facility at Sandwich
This volume contains the written evidence accepted by the Science & Technology Committee for the inquiry into ‘Pfizer’s decision to close its research and development facility at Sandwich’.
PZ Author PZ Author 01 Association of the British Pharmaceutical Industry 01a Supplementary 02 Royal Society of Chemistry 02a Supplementary 03 Pfizer 03b Supplementary 04 Joint submission: Laura Sandys MP, Roger Gale MP, Charlie Elphicke MP, Damian Collins MP and Julian Brazier MP 05 Professor Colin Blakemore 06 Department for Business, Innovation and Skills 06a Supplementary
As at 29 March 2011 Written evidence submitted by the Association of the British Pharmaceutical Industry (PZ 01)
1. The ABPI welcomes the opportunity to participate in the Science and Technology Select Committee’s current inquiry into the environment for pharmaceutical research and development in the UK.
2. Media comment since Pfizer’s announcement of the closure of its facility at Sandwich has not always been accurate in its interpretation of the research and development challenges facing the industry both in this country and globally. Significant global economic pressures mean the model for the development of new medicines is changing; industry is seeking both to boost its capacity to innovate and to reduce its operating costs. It is therefore vitally important that regulation, legislation and the incentives and rewards for innovation accommodate these shifting dynamics. The UK, as the second largest beneficiary of pharmaceutical investment, must play a leadership role in creating an environment that balances a great science base and reward for innovation with the need to have an efficient healthcare system.
Summary
3. The Global Picture ‐ There is great potential in bioscience and its long‐term ability to address a high level of unmet medical need. ‐ The global pharmaceutical industry is seeking new ways to improve the productivity of research and development operations, to bring medical advances to patients quicker and more cost‐effectively. ‐ It is doing so in an environment characterised by revenue loss from major patent expiries and downward global pressure on drug prices combined with increased demands from regulators and payers to demonstrate the broader value of medicines. ‐ A combination of these pressures means that many companies are rationalising and consolidating their R&D and manufacturing organisations as they restructure their global operations. ‐ There needs to be concerted action amongst key players (industry, governments, regulators and others) for a more intelligent, adaptable and streamlined development pathway, reducing the cost of new medicines.
4. In the UK ‐ Life science in the UK is an ecosystem, involving academic research, small and medium sized enterprises (SMEs) and larger companies, working ever more closely together. In an increasingly competitive global environment a strategy for growth must strengthen the environment for all three, in ways that encourage their interaction to be better here than elsewhere. ‐ The UK is an international leader in the life sciences sector, with world class basic research giving the potential for continued competitiveness. ‐ The Government has already recognised the potential of the life sciences sector to make a significant contribution to its ambition to rebalance and grow the UK economy. However, with global restructuring underway, the UK will continue to lose out without improvements to its innovation environment. ‐ Many of the right policies are already in place to ensure that we can continue to innovate and produce the new medicines needed by patients to improve their quality, and length, of life. ‐ The ABPI has made a number of recommendations to Government to support growth in the sector, some of which could be implemented relatively quickly without significant cost. ‐ The single largest obstacle to future UK leadership in the life sciences is the widespread reluctance of the NHS to adopt of innovation, and this needs to be a priority for the Government.
About the ABPI
5. The Association of the British Pharmaceutical Industry (ABPI) has 150 members including the large majority of the research‐based pharmaceutical companies operating in the UK, both large and small. Our member companies research, develop, manufacture and supply more than 80 per cent by value of the medicines prescribed through the National Health Service (NHS).
6. The ABPI is pleased to assist the Science and Technology Committee in its inquiry into how UK Plc can use science to drive economic growth. In this memorandum we will set out how pharmaceutical research and development is changing, what challenges to growth currently exist in the UK and how these might be addressed. The ABPI recently submitted a detailed list of recommendations to the Health and Life Sciences Growth Review and will shortly do the same for the Manufacturing Growth Review. We would be happy to share both of these documents with the Committee.
The Challenge for Pharmaceutical Research and Development – the global picture
7. The development of a new pharmaceutical product takes on average 12‐15 years. For every 25,000 compounds tested in the laboratory, 25 will enter clinical trials, 5 will be approved by regulatory authorities and only 1 is likely to recoup the investment made. Industry success rates in getting medicines to market have declined in recent years and the average cost currently stands at around £1 billion.
8. It is clear that this is not sustainable in the long‐term. Analysts are sceptical of the value of many companies' R&D pipelines, indicating that they are not convinced that the industry can earn a rate of return that exceeds its cost of capital through investment in R&D. A number of challenges exist:
‐ Research is now focused less on the blockbuster approach typical of the 1980s and 1990s, where a medicine was used to treat broad patient populations. As scientific understanding develops, research is increasingly targeted to the populations that are most likely to respond to the treatment. While this is without doubt great news for patients, it does mean that the market for new drugs is smaller.
‐ It is becoming harder and harder to innovate ‐ more often than not the scientific advances achieved are incremental rather than transformational, while clinical trials are becoming technically more complex as a result of both the nature of the diseases being treated and the regulatory environment. The attrition rate of compounds in development is very high – we need better science and technology to predict safety more accurately earlier in the development pathway as well as better translational models and biomarkers as predictors of efficacy.
‐ Payers around the world, from national governments to insurance companies, are applying ever more scrutiny to medicines. The burden of proof is greater than ever, focusing on more than just clinical efficacy and requiring new approaches to drug development to understand the true "real life" value of each drug. Health Technology Assessment has become commonplace and increasingly sophisticated over the last decade as bodies such as NICE seek to assess the value of new medicines. The type of evidence required by HTA bodies differs from that of regulators and while the industry understands and completely accepts that it must provide evidence of the value of its products, the research required to do this adds to the costs of R&D.
‐ 2010 saw significant downward pressure on prices as a result of US healthcare reform and European cuts to medicines bills. In the UK, the 2009 Pharmaceutical Price Regulation Scheme delivered cuts of 3.9% in 2009 followed by 1.9% in 2010. The UK taxpayer is now benefiting from prices of branded medicines that are amongst the lowest in Europe.
‐ The industry is experiencing a “patent cliff”, as blockbuster medicines launched in the 1990s are approaching the loss of market exclusivity as a result of patent expiry and the entry of generic competition. This will result in companies facing substantial revenue losses over the next few years which means that less money is available to invest in R&D. The impact of this will vary from country to country, but in the UK it is estimated that the revenue lost to the innovative industry in the period 2009‐2014 will be £8.5 billion.
9. There is great potential in science. Globally the industry is trying to ‘crack the code’ on R&D, to adjust business models and investments in order to bring medical advances to patients quicker and more cost‐effectively, and to develop medicines in areas where there is still significant unmet need. Several trends are emerging:
‐ The advent of new business models: as pharmaceutical companies try to get access to cutting edge innovation as soon as possible, we are seeing much greater interest and scale in academic and "pre‐competitive" collaborations. Increasingly, large companies are sourcing some of their pipeline products and services from SMEs. Not only is this good for industry and smaller companies but it represents a great opportunity for the world's leading academic institutions, and could also serve to plug the gap left by the drying up of venture capital funds during the economic downturn. There is a move to more open source innovation or sharing of intellectual property between organisations.
‐ Rightsizing of investment in R&D: with excess industry capacity and returns lower than the cost of capital on R&D investments, most companies are looking to reduce their investment in internal R&D. Some are also narrowing their focus, investing in a smaller number of diseases where they believe they have a higher likelihood of getting a compound to market that will return its investment. In some cases, this focus is regrettably resulting in job losses.
‐ Consolidation of the global R&D footprint: because of the way the industry has evolved through acquisitions and collaborations many companies find themselves with multiple R&D sites that have grown up around discrete areas such as specific diseases being researched. In order to improve operational efficiency and address the challenges of running multiple R&D sites, some companies are finding they must close sites. In cases where companies have sites that are almost exclusively dedicated to research in diseases they no longer see as viable, these tend to be the first sites to go. This is typically unrelated to the geography in which they operate and more focused on the activities they undertake.
Leveraging Pharma R&D to stimulate economic growth in the UK
10. The pharmaceutical industry has the potential to make a significant contribution to the Government’s ambition to rebalance and grow the UK economy. This country is an international leader in the life sciences sector, competing at a global level through our ground‐breaking research institutions and highly skilled workforce.
11. We are, however, operating in an increasingly competitive global environment. To ensure life sciences can continue to be a cornerstone of the economy, we must have a market that drives growth and investment confidence.
12. Life science in Britain is an ecosystem, involving academic research, SMEs and larger companies, working ever more closely together. But all of them are under pressure and in the process of change: ‐ Academics are realising that they can and must engage in product‐focused innovation, not just conduct world‐leading basic research, if they are to remain well‐funded magnets for the world's best researchers. ‐ SMEs in search of funding for growth have to collaborate with large companies. This type of collaboration provides the best opportunity for SMEs’ promising products to reach global markets. ‐ Larger companies, under more economic stress than ever before from patent expiries and downward payer price pressure, are pruning their internal R&D machines. They are also sourcing both pipeline products and support services from SMEs, which have often proved more productive as discovery engines.
13. Each of these three groups needs the others in order to thrive. A UK strategy for growth in life sciences must strengthen the environment for all three, in ways that encourage their interaction to be better here than elsewhere. We set out below a summary of the ABPI’s recommendations to the Health and Life Sciences growth review:
Creating the right environment for research 14. Global competition for pharmaceutical investment is intense, and the capital that funds this investment is mobile. In order to position itself as a viable contender to challenger markets in the EU, US, and Asia, the UK must create the right frameworks, incentives and partnerships to attract and retain high‐value investment into this country.
15. The UK does not have a globally competitive corporate tax regime. In 2008 the effective global tax rates were 29% for UK pharma, 20.2% for US pharma and 17.8% for EU pharma. The reduction in corporation tax, introduction of the Patent Box and review of R&D tax credits are welcome steps on the way to making the UK more competitive.
16. The ABPI believes that improved collaboration in research, a more dynamic regulatory framework, and improved fiscal incentives would serve as an effective starting point to encourage greater investment in the pharmaceutical sector. In particular, we recommend:
‐ The implementation of the Academy of Medical Sciences’ review on the regulation and governance of medical research. The UK desperately needs to streamline the process involved in the establishment of clinical trials, and improve the culture for clinical research ‐ The creation of a more level playing field between the UK and EU in clinical trials. In particular, we call for an amendment of the UK Patents Act and a swift conclusion of the review into the EU Clinical Trials Directive ‐ The use of information for research must be at the forefront of the NHS information revolution as this potentially provides the UK with a unique advantage in attracting research. Electronic health records should be made available urgently as this is vital for personalised medicines and pharmaco‐vigilance ‐ The introduction of Consortium Relief, as developed by the Office for Life Sciences (OLS), to encourage investment in SMEs. The Treasury should also explore the potential to use tax incentives to fund the development of spin‐out companies, and should streamline the administrative process for spinning‐out ‐ The improvement of incentives to encourage greater cross‐sector collaboration. For example, the Government should sustain its support for the Charity Research Support Fund to maintain joint‐working between the private and third sectors, and should implement the revised Research Excellence Framework as soon as possible to reward academic collaboration with industry ‐ Improved movement of individuals between academia and industry, facilitated by joint academic‐industry appointments, increased availability of sabbatical placements, and the embedding of industry collaboration and exchange within research council training fellowships ‐ The protection of all research scientists from animal rights extremism, and the maintenance of public sector support for the National Centre for Replacement, Refinement and Reduction of Animals in Research
Establishing a skills‐led infrastructure 17. The pharmaceutical industry is dependent on the presence of a dynamic, highly‐trained workforce. The UK has been home to some of the world’s leading life scientists, and has fostered some of the biggest breakthroughs in medical science. But we are consistently failing to develop and realise all the latent talent in this country.
18. The ABPI believes that only co‐ordinated action from Government, industry, schools and universities will unlock this potential. We recommend:
‐ Improved guidance for students, to help them understand what careers can follow from bioscience degrees ‐ Courses which are better suited to students’ increasingly varied backgrounds. In particular, we recommend increased provision of part time higher education opportunities, and increased use of tax breaks for training apprentices ‐ The Higher Education Funding Councils for England, Wales and Scotland should continue to offer schemes that allow employers to part‐fund and jointly commission courses. They should also review the incentives for universities to improve the high cost practical training they offer science and engineering undergraduates ‐ The Life Sciences Advisory Council needs to develop a strong dialogue with universities and employers to ensure education and training reflects the needs of the market ‐ The Home Office and BIS should actively engage with industry on an ongoing basis to understand the impact of immigration policy on pharmaceutical and contract research companies. We strongly agree with Government that developing a domestic skills base in the bioscience sector is important, but until the benefits of any future investment are realised – in at least 10 to 15 years time – it will be necessary to supplement UK‐born workers with highly‐skilled international recruits.
Securing uptake and improving outcomes 19. The pharmaceutical industry in the UK is fully committed to the Government’s ambition to deliver world‐class outcomes for patients, which in itself will support economic growth.
20. The uptake of new medicines in the UK is comparatively low and slow, and the NHS’s current efficiency programme (requiring savings of £15 ‐ £20 billion) is likely to exacerbate this problem. As the Government re‐frames and re‐structures the NHS to make it more effective and efficient, we have the opportunity to make the Health Service a sponsor and supporter of innovation in life sciences research. We will only be able to achieve this if the new structures within the NHS, from the system for reimbursement of medicines (including the introduction of Value‐Based Pricing from 2014) to the way GP consortia commission their services, are configured to promote the appropriate use of new treatments.
21. To deliver this step‐change in the way the NHS rewards innovation, we recommend:
‐ Co‐development of the final framework for Value‐Based Pricing by Government and industry, to ensure the new system rewards innovation and R&D ‐ The introduction of a national outcome measure on the uptake of new medicines of proven value ‐ The creation of joint‐working initiatives to improve uptake of medicines during the period of NHS reform, and to inform future R&D investment decisions.
Conclusion
22. The pharmaceutical industry is undoubtedly going through a period of major change, but as development pathways adapt and our scientific knowledge expands there is great opportunity to bring new advances to patients. Countries that are able to provide supportive environments will be well placed not only to secure global investment but to ensure their populations are able to benefit from access to new medicines. The UK has many strengths but action is needed in the areas we have highlighted to ensure it can capitalise on these in the future.
Association of the British Pharmaceutical Industry February 2011 Supplementary written evidence submitted by the Association of the British Pharmaceutical Industry (PZ 01a)
This memorandum responds to specific questions from the Committee during the oral evidence of Dr Richard Barker on 28th February 2011.
Government support for industry (Q.10 & 11)
1. The committee asked Dr Barker how much the government invested in life sciences. Assuming that the committee was referring to public sector investment in research Dr Barker gave the figure of £2 billion (detailed below) but subsequent discussion clarified that the committee was seeking data on support given directly to the pharmaceutical industry. There is no significant direct support to industry; however, there are concessions such as R&D tax credits (generally available to research‐based industries) for which data are not publicly available.
2. Figure 1 illustrates the basis of the £2 billion figure that Dr Barker spoke of and clarifies that this figure is the funding for biomedical research from Government sources, charities and industry.
3. There is significant Government support for medical research in the UK, which in effect may serve as indirect support to the pharmaceutical industry. This includes funding from the National Institute for Health Research, the Medical Research Council and the Technology Strategy Board. This funding is also illustrated in Figure 1.
4. The ABPI does not hold any data on direct support to the industry in the form of RDA funding, local authority road improvements and other such measures that were mentioned by the committee in the Ministerial evidence session. To provide a figure for the total direct and indirect public support provided to industry would be a significant undertaking. The ABPI would be willing to work with Government departments to assist in identifying these figures, should it be requested by the committee.
5. Pharmaceutical companies make important economic contributions to the UK. The industry has contributed to an ever‐widening trade surplus, which stood at £7 billion in 2009, the greatest of nine major industrial sectors. The industry also invests more in R&D in the UK than any other industrial sector. Gross Value Added produced by the industry – effectively its contribution to GDP ‐ has continued to rise over recent years. The Office for National Statistics Annual Business Inquiry 2010 stated that the net value added to the economy by the industry in 2009 was £7.9billion.
Employment following site closures (Question 30)
6. The Committee requested data on career progression and development within the sector, and more specifically whether those who have worked at recently closed sites in the UK found re‐ employment within the pharmaceutical sector.
7. ABPI does not have any numerical data on the subsequent employment of individuals involved in any of the site closures that are on‐going or have previously taken place, however we are aware of individuals from these sites who have moved to other large pharmaceutical companies, have moved to SMEs, set up consultancies and transferred to other sites of the company. Some may also have transferred to academia.
The impact of regulation on investment decisions (Questions 19‐23)
8. Questions 19‐23 concerned the regulatory regime in the UK and its role in the investment decisions of pharmaceutical companies. We would like to clarify the position of the ABPI in response to these questions, as there is a difference between product regulation in terms of granting a licence, and clinical trial regulation.
9. In his oral evidence on 28th February Dr Barker primarily covered the regulatory approval of medicinal products. This is dealt with at a European level through the European Medicines Agency. Individual country agencies, such as the MHRA, will play the rapporteur role.
10. The UK’s share of global patient enrolment in clinical trials fell from 6% to 2% over a period of five years (2000 to 2006)i. The regulatory regime around clinical trials in the UK very clearly has an impact on the investment decisions of pharmaceutical companies. This is compounded by NHS culture and practices that do not always support commercial research. For example, there are specific difficulties in attracting clinical trials to the UK when the international ‘gold standard’ treatment to be used as the comparator is not routinely used in the NHS (for example following a negative NICE recommendation). The differing practices of individual R&D committees across NHS trusts have made starting new trials a slow process and delayed the recruitment of patients.
11. The Academy of Medical Sciences recently published a review of the regulation and governance of medical research, ‘A new pathway for the regulation and governance of health research’. The AMS concluded that urgent changes are required because unnecessary delays, bureaucracy and complexity are stifling medical advances, without additional benefits to patient safety. The ABPI strongly supports the recommendations detailed in the report and believes implementation will address many of the barriers to conducting clinical research in the UK. Clinical trials are geographically mobile and if we can bring forward measures to improve the UK’s performance there is significant opportunity for rapid growth in this area. As the Government considers its response to the AMS report, it will be vital to ensure that recent improvements in, for example, faster turnaround times for ethics committee approvals and clinical trial approvals from the MHRA, are not lost in the transitional period.
12. The Clinical Trials Directive brings a European dimension to the governance of clinical trials in the UK. The forthcoming review of the EU‐CTD (2001/20/EC) provides a rare opportunity to address the legislation that underpins clinical research in the EU, which would have a direct impact on the attractiveness of the UK for clinical research. Disappointingly, we recently learnt that this review may be delayed by a year. The ABPI recommends that the UK Government should engage at the EU level to expedite the review of the EU Clinical Trials Directive, and seek implementation of proposals that would improve the attractiveness of Europe and the UK as a location for clinical trials.
Association of the British Pharmaceutical Industry March 2011
i CMR data quoted in Kinapse report ‘Commercial Clinical Research in the UK’ November 2008 Written evidence submitted by The Royal Society of Chemistry (PZ 02)
The Future of Pharmaceutical Research in the UK
The UK Government has a vision to create a dynamic, knowledge-based economy that capitalises on our world-class science base for long term growth and social benefit. Healthcare is one of the key sectors where the UK has proven global competitive strengths. One in every six of the most popular prescription drugs were developed in the UK. In 2009, the pharmaceutical industry contributed £4.4 bn in R&D1. In addition, this sector generated a positive trade balance of £7 bn. No other sector made larger contributions to the UK economy in terms of trade balance and investment in R&D2. The UK’s position must be sustained to face the medical challenges of the 21st Century.
The RSC believes that to enable this, the establishment of a range of dedicated drug discovery units (at a cost of approximately £1 bn over 10 years) is essential, particularly where they are able to capitalise on existing state of the art facilities or pools of talent. This investment would enable the UK to tackle areas of growing unmet medical need (e.g. obesity, Alzheimer’s and infectious diseases); it would also be used to secure the UK’s leadership in high tech research for innovative healthcare (e.g. diagnostics, personalised medicine, translational science and regenerative medicine).
There is an increasing demand for cost effective new drugs to meet the high medical needs of the 21st Century. Not only are many diseases that incur significant healthcare costs still poorly treated but we are facing an increasing disease burden of an ageing population. However, pressure on healthcare budgets, increased regulatory and safety demands coupled with patent expiries have forced downsizing in UK pharmaceutical R&D that threatens the UK as a leader in healthcare innovation. The potential negative consequences will impede the discovery of new medicines as well as impacting economic growth and productive employment of world class scientists. There will also be widespread negative impact on the scientific academic and biotech sectors.
It is vital that the UK is able to reconfigure world class scientists in existing and new facilities to discover cost effective new drugs that satisfy high medical need, improve quality of life and provide a realistic return on investment. However, the scale of the research investment gap as a result of downsizing cannot simply be filled by academia, public private partnerships and charities, nor by the biotech sector without a major prioritisation of new funding from the Government.
Recommendations for supporting innovation:
Access to excellence in academic research is an enabler for a knowledge-based economy and provides an important stimulus for continued inward investment. The UK is home to three of the top 10 universities in the world and 14 of the top 100, a stable of quality service providers, world class research charities and a rich heritage of globally recognised medical research.
1 Office for National Statistics (2010) Business Enterprise Research and Development Statistics Bulletin 2009, available at http://www.statistics.gov.uk/pdfdir/berd1210.pdf, accessed on 8.02.2011 2 Association of British Pharmaceutical Industry (2011) Did you know? Facts and figures about the pharmaceutical industry in the UK, available at http://www.abpi.org.uk/Details.asp?ProductID=369 , accessed on 8.02.2011 • Government must continue to support the basic science that underpins drug discovery through the MRC, BBSRC and EPSRC to ensure that there is a strong supply of science graduates and a foundation of stimulating basic research.
‘Pump prime’ funding is required from the Government, charitable organizations and private sector to re-establish the UK’s pre-eminent role in healthcare innovation through focused and nimble drug discovery units
• Establishment of a range of dedicated drug discovery units (at a cost of approximately £1 bn over 10 years), which should focus on addressing specific disease areas (for example, but not limited to, Alzheimers, obesity and infectious diseases) as well as medical technologies (such as diagnostics, personalised medicines). These could be localised where they are able to capitalise on existing state-of-the-art facilities or pools of talent.
• Initiatives to capitalise on the assets, talent and facilities no longer being pursued by the pharmaceutical companies in the UK are also needed.
Recommendations for a unique, positive business environment in the UK
The high density of industry, academia and healthcare provides the UK with a distinctive collaborative advantage. In addition, a positive business environment is also needed for positioning the UK as an ideal location for discovering, developing and trialling new medicines.
• Knowledge transfer and collaboration must be catalysed and supported by strengthening the position of pharmaceutical research within Government initiatives (such as the UK's Knowledge Transfer Networks and the Technology Strategy Board).
• Increased investment should be made available for SMEs operating in the pharmaceutical sector to provide financial and environmental support for the creation, growth and sustainability of these businesses for continued success in drug discovery.
• The healthcare community should prioritise disease targets that reflect national needs and interests, develop efficacy and safety parameters for new drugs that would justify reimbursement before long term research programmes have been undertaken.
• The Patent box is an excellent example of how joint working across Government and industry can provide measures to improve the UK business environment for life sciences companies. A range of mutually stimulating incentives is needed to ensure the UK maintains a globally competitive environment.
• In addition, the UK Government must show leadership at a European level (e.g. with respect to influencing funding and developing regulations) to support the regulation and innovation that makes the UK a stable and predictable economic and regulatory climate for discovering, developing and trialling new medicines.
Royal Society of Chemistry February 2011 Supplementary written evidence submitted by The Royal Society of Chemistry (PZ 02a)
PfIZER: THE SELECT COMMITTEE’S INQUIRY
Further to your email follow-up to Monday’s oral evidence session you asked about two further areas where the Society might be able to be of some assistance to your Select Committee’s inquiry into the Pfizer announcement and its aftermath.
Q27/Q76 RSC support for Members in Sandwich
In relation to the support the RSC is providing to its members at Pfizer this short note outlines the nature of the pastoral/career assistance we are providing e.g. the following:
1. 1:1 consultations via the phone, email or via the web as needed and the RSC will be visiting Sandwich in May 2011 where it will be doing presentations on CV advice (45 mins long with 15 mins questions) with an opportunity for RSC members to have a 10 minute slot for 1:1 CV advice after the presentations as well as longer consultations of 45 minutes. The RSC will be going back later in the year as more people find out what is happening.
2. There will be an online presentation on Coping with Redundancy (20 minutes long) on the RSC’s professional networking platform which is known as MyRSC (http://my.rsc.org) available from this week.
3. Additionally all members at Pfizer are welcome to come for 1:1 sessions in Cambridge/London on an ‘as required’ basis and the RSC already has 13 people booked in for its careers hub in London on the 4th – 7th April.
In addition an RSC colleague had a meeting with our representative from Pfizer today to make sure that we are covering everything that RSC members in Sandwich need.
Q30 Data on Career Progression within the Sector
I have asked my colleagues in the relevant area to provide whatever information we can give you and please find attached a spreadsheet of members that the RSC has supported over the last 12 months who have been made redundant from leading pharmaceutical companies and what they have done and how long it took them to find a position. This data is derived from and/or through LinkedIn so this is reliable only if the person has actually updated their profile. From the small amount of data we do have only one person has been unemployed for 9 months and the rest are somewhere between 0 and 3 months for those who are not currently still employed at their respective Pharma company. This is in line with what the RSC thought was the case – namely that it takes on average 6 months to find a new position and that these big Pharma employees often find work within 3 months. This is due to the level and quality of work they have done, the training they have received and the perception of large Pharma in the rest of the sector. Where it says n/a that is because they are still at the company and haven’t left yet.
Dr Stephen Benn, Parliamentary Affairs The Royal Society of Chemistry March 2011
Annex A
SUMMARY OF SOCIETY ACTION BEING UNDERTAKEN TO PROVIDE ASSISTANCE TO RSC MEMBERS CURRENTLY EMPLOYED AT PfIZER
Date Short term Mid term Long term 9th February An email to all Pfizer members will be sent out assuring them that we are available at all times and offering 1:1 support via phone/email/MyRSC orin person in London/Cambridge asrequired 14th February An onsite visit with 2 presentations on CV advice (45 mins long with 15 mins questions) for members and non members. There will be an opportunity for non members to join if they want to. Additionally there will be an opportunity for RSC members to have 1:1 CV advice on site; this will be for a maximum of 10 mins with the offer of follow up support via email. We can see approximately 30 people in total. 21st – 22nd February As above; 1:1 CV advice on site with a presentation if required. We could see approximately 100 people over two days. 28th February An online presentation on Coping With Redundancy (20 mins max) run via MyRSC 23rd – 26th May 2011 A careers hub with a mixture of (provisional) 20 minute and 45 minute appointments, workshops and a networking event. It would cover general careers advice with focus on setting up own business, job searching, CV/application advice, 1:1 consultations regarding options etc September Second hub for (provisional) those affected at different times e.g. analytical division. November Having a Day (provisional) devoted as part of ChemCareers to people affected by redundancy
Annex B Data on Career Progression within the Sector
Time employed Time unemployed What (months) (months) Science Technician 3 7 Research Associate 10 0 Research Grants Manager 7 0 Project Manager N/A N/A SRA 36 0 Analytical Chemist N/A N/A Associate Director Medicinal Chemistry 8 0 Senior Investigator I 7 0 Membership Recruitment Executive 11 0 Senior Scientist 10 0 Senior Scientist 5 3 Chemistry Teacher 9 0 Professor of Medicinal Chemistry 5 0 Senior Scientist N/A N/A Global Regulatory CMC 3 0 Analytical Services Manager 4 0 Scientist, CRO Management, Scinovo 8 0 Team Leader N/A N/A Senior Scientist N/A N/A Principal Scientist N/A N/A Director (clinician) 12 0 Scientist N/A N/A Applications Specialist 5 0 Team Leader N/A N/A Medicinal Chemist N/A N/A Analytical Chemist N/A N/A Team Leader N/A N/A Executive Director N/A N/A Scientist N/A N/A Medicinal Chemist N/A N/A Teaching Associate ? ? MRI Research Scientist 3 0 Medicinal Chemist N/A N/A n/a 0 9 Principal Chemist n/a n/a Director 3 0 Principal Crystallisation Specialist n/a n/a Director 3 0 consultant 3 0 Section Manager n/a n/a Associate Director n/a n/a Lead Project Scientist n/a n/a PGCE Student 7 0 Director 3 0 Analytical Chemistry Team Leader n/a n/a Synthetic Organic Chemist 0 3 Senior Research Scientist n/a n/a Associate Director n/a n/a Senior Project Engineer n/a n/a Finance Assistance 6 0 Project Manager n/a n/a Associate Principle Scientist n/a n/a Recruitment Manager Chemistry n/a n/a Principal chemist n/a n/a Senior Scientist n/a n/a Senior Scientist n/a n/a Senior Research Scientist n/a n/a Senior Research Scientist n/a n/a Senior Research Scientist n/a n/a Laboratory Manager 3 0 Associate Principal Scientist n/a n/a Associate Principal Scientist n/a n/a Team Manager 4 0 Principal Chemist n/a n/a Quality Assurance Advisor n/a n/a Senior Scientist n/a n/a Senior Research Scientist n/a n/a Associate Principal Scientist n/a n/a Demonstrator Manager 7 0 Senior Research Scientist n/a n/a Synthetic Chemist n/a n/a Associate Regulatory Affairs Manager 8 0 Research Scientist n/a n/a Trainee Patent Attorney 9 0 Senior Research Scientist n/a n/a Senior Medicinal Chemist n/a n/a Senior Research Scientist n/a n/a Head of Analytical Chemistry 2 0 Senior Research Scientist n/a n/a Senior Scientist n/a n/a Senior Research Scientist n/a n/a Senior Plant Technologist n/a n/a Senior Scientist n/a n/a Associate Principal Scientist n/a n/a Senior Scientist n/a n/a Team Leader n/a n/a Senior Research Chemist 3 0 Associate Principal Scientist n/a n/a Senior Research Scientist n/a n/a Senior scientist n/a n/a Senior Research Chemist n/a n/a Senior Chemist n/a n/a Lead Business Analyst n/a n/a Senior research scientist n/a n/a Senior Research Scientist n/a n/a Senior Research Scientist n/a n/a Chemist n/a n/a Research Scientist n/a n/a Scientist n/a n/a Quality Assurance Advisor n/a n/a Physical Organic Chemist n/a n/a Investigator III 4 0 Senior Research Scientist n/a n/a Project & Team Leader n/a n/a Senior research scientist n/a n/a Associate Principal Scientist n/a n/a Senior Quality Assurance Advisor n/a n/a Senior Research Scientist n/a n/a Senior Research Scientist n/a n/a
Written evidence submitted by Pfizer Inc. (PZ 03)
Introduction
1. On 1 February 2011 Pfizer announced its intention to exit its research site at Sandwich in Kent by the end of 2012. This decision is part of a global programme of changes intended to accelerate the implementation of Pfizer’s long term research and development (R&D) strategy to create a more focused and sustainable R&D engine for innovation. The proposal to exit the Sandwich site was not a reflection on the Pfizer staff in Sandwich, or the UK operating environment.
2. The number of Pfizer colleagues currently employed at our Sandwich site is approximately 2,400. Over the next 18-24 months a majority of these positions will be made redundant, subject to normal employee consultation. Pfizer hopes to transfer several hundred positions to other Pfizer sites or to external partners, subject to employee consultation and other legal requirements. During this period, Pfizer’s first priority is to support colleagues affected by this decision. Consultation with the Sandwich Colleague Forum is in process.
3. Given the talented and strong workforce and the excellent facilities at Sandwich, Pfizer’s aim is to find partnership opportunities which can utilise the Sandwich site, in an effort to preserve jobs and activity there. In addition to our own activity, we are also working closely with national and local agencies, including the Sandwich Local Economic Taskforce established by the Department of Business, Innovation and Skills.
4. The UK has always been an important location for Pfizer. Sandwich was our only integrated R&D site located outside of the US, and produced a number of important medicines for the company and for patients. After the proposed exit from the Sandwich site, the UK will remain an important location for Pfizer. We will have R&D sites in Cambridge and Aberdeen, packaging and distribution in Havant, and business operations at Walton Oaks, in Surrey, and Maidenhead. Given the strength of the science base, the UK will also remain an important location for scientific collaborations with the academic sector.
Pfizer’s Worldwide R&D Strategy
5. There is an underlying set of global drivers that led to the acceleration of Pfizer’s R&D strategy. The pharmaceutical industry currently faces a challenging global business environment, including factors such as:
• Increased costs and timelines for new product development to meet rising technical standards. • Insufficient number of new medicines from R&D investment. • A wave of patent expirations on major drugs and rising competition from generic manufacturers. • Increasing pressure from payers, through various cost containment policies arising from fiscal pressures. • Increasing evidence demands at regulatory, pricing and reimbursement decision points, including the need to conduct longer, larger clinical trials. • The need for active comparator clinical studies rather than placebo controlled studies, and an increasing demand for sub group analyses. These can delay time to market and can increase development costs.
6. These global drivers have meant that Pfizer has reduced its projected R&D spend for 2012 by $1.5 – 2 billion.
7. In order to maintain Pfizer's position as a leading innovative multi-national pharmaceutical company, we are restructuring and refocusing our R&D activities worldwide.
• We are focusing our efforts on a smaller number of research areas, where we believe will have the greatest impact. • We are creating new models to access external science and technology and outsourced capabilities. • We will focus the global footprint of our R&D site network to more fully align with key hubs of science and technology.
8. With these considerations in mind, Pfizer conducted a comprehensive review of our research pipeline and R&D footprint.
Rationale for the proposed exit of the Sandwich Site
9. Pfizer’s proposed exit from the Sandwich site is part of a larger programme implementing our R&D strategy, which included an overall reduction in R&D spending, a focusing of the research areas that we work on, and an acceleration of changes in how we conduct R&D. All three factors had a bearing on the proposal for the Sandwich site.
10. In future Pfizer will focus its resources and efforts on a smaller number of research areas where we believe we can deliver the greatest medical impact and commercial value. These include neuroscience, cardiovascular, oncology, inflammation and immunology, and vaccines. In addition, we will have specialised units for pain and sensory disorders, and biosimilars. This increased focus has meant that we have decided to exit research in allergy and respiratory diseases, internal medicine, and oligonucleotides.
11. The new focus on research areas was one factor that influenced our decision to exit Sandwich. The Research Units based at Sandwich were dedicated to two research areas we are exiting: allergy and respiratory, and internal medicine. The decision to end our focus on oligonucleotides has also led to the proposed exit from our Dusseldorf site in Germany, subject to works council negotiations, and also the Cambridge South site in Massachusetts, USA.
12. A further deciding factor has been Pfizer’s aim to improve how it conducts research by moving its Research Units to “global innovation hubs” where we can access science, science leaders and partners. That is why Pfizer’s pain and sensory research will be located in Cambridge, UK. We see the UK, and Cambridge in particular, as being a place where we want to conduct research in the future. This
2 move will put us in close contact with leading biomedical research institutions and provide access to a deep and energised talent base.
13. The other key factor that led to the decision to exit the Sandwich site is Pfizer’s decision to shift a significant portion of its internal scientific support work to strategic partners to address our high infrastructure costs, and lower our fixed asset costs. Many staff at Sandwich work in enabling research functions, such as pharmaceutical sciences.
14. The business drivers detailed above meant that there was no specific action that the UK Government could have taken to change the proposal to exit the Sandwich site. The changes being implemented at Pfizer are reflective of a trend among multi-national pharmaceutical companies, as they react to cost containment measures by Governments around the world seeking to reduce expenditure on medicines.
R&D opportunities in the future
15. Pfizer looks forward to opportunities to work with the UK biomedical community in the future:
• The move to externalise a greater percentage of R&D functions provides new opportunities for Contract Research Organisations (CROs) in the UK. • Pfizer’s Pain and Sensory Disorder Research Unit at Cambridge will build upon existing collaborative opportunities with UK universities and other institutions. • Pfizer is examining options to establish novel external collaborations, such as the ‘Centres for Therapeutic Innovation’, which are partnerships with leading academic health centres. • Pfizer will focus its late stage portfolio on high-priority disease areas, to include a mix of owned and partnered assets. We are also exploring partnerships in disease areas and assets with higher scientific and/or commercial risk. This will mean that Pfizer will be looking at business development opportunities with biotech and other pharmaceutical companies in the UK and other countries. • There is the possibility that the decision for Pfizer to exit certain research activities in the UK will mean that there could be out-licensing of Pfizer assets, which could lead to new company start ups within the UK.
16. Pfizer’s efforts to mitigate the impact of the proposal to exit the R&D site will be to work with the government, the UK scientific community and other key stakeholders to see how Sandwich and the UK can be part of the evolving biopharmaceutical R&D model.
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Conclusion
17. The proposal to exit Sandwich was part of a Global refocusing of Pfizer’s research efforts, as part of a strategy that has been influenced by challenges faced across the industry. The strong drivers to change meant that there was no action that the UK Government could have taken to change the proposal to exit the Sandwich site.
18. Pfizer is working hard to explore external partnership opportunities at the Sandwich site in an effort to preserve jobs and activity on the site. We welcome the Government’s Sandwich Economic Taskforce to explore future options for the site.
19. It is important to note that the UK government has undertaken policy initiatives over the last few years to recognize and reward innovation, and that these have been welcomed by the pharmaceutical sector, and remain important as we change our business model for the delivery of new medicines
20. Pfizer will continue to work closely with Government and other key stakeholders to help enable a favourable environment for R&D investment in UK that will be responsive to the changing pharmaceutical industry R&D model.
Pfizer Inc. February 2011
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Supplementary written evidence submitted by Pfizer Inc. (PZ 03b)
Further to Pfizer’s appearance before the Science & Technology Select Committee on 28 February 2011, we are writing to provide you with the additional information that was requested during the oral evidence session.
Q39 What support has been given to staff at Sandwich?
• Since the announcement on 1 February, Pfizer has taken a number of measures to support our staff at the site. These include:
• The establishment of an Outplacement Centre. This will provide coaching and advice for colleagues in preparing CVs and interviewing skills. It will also host job fairs and act as a conduit for all external roles. There is currently a procurement review process to select a suitable provider for this on-site service and a Colleague Forum representative is involved in provider selection.
• Colleague Forum: Established in 2004, the Sandwich Colleague Forum is a partnership between employees and the Company (the Forum is the works council organisation for the Sandwich site). The Forum is working to assist employees to understand business issues and change, to present the ideas, views and concerns of employees to management to gain mutual understanding of all aspects of Pfizer’s business. The Forum enables employees to communicate with Pfizer senior management.
• A dedicated intranet site on matters concerning the proposal to exit the Sandwich site. On this site employees can find details of HR Policies, the Presentations/Documents and Minutes from the Colleague Forum, Information on the Government Task Force, External Job Opportunities that we have been approached with, News Bulletins, links to sites including ‘Polish your Presentation Skills, topics such as ‘Spin out Opportunities’. There is also a ‘Submit your comments’ question facility on the web site. We have also added external links to the Select Committee meeting on 28 February, so that colleagues can read about and watch the session with Pfizer.
• There is a specific ‘External Job Opportunities’ page on the intranet site which is a centralised source of external job vacancies which we have been notified of since the announcement on 1 February of Pfizer’s proposed exit from the Sandwich site.
• Line managers are holding departmental briefings and meetings with employee teams as appropriate. Each team of employees has a Colleague Forum representative.
• Colleague Forum representatives have organised ‘drop in’ sessions for their constituents.
• A number of sessions of a training programme ‘Cresting the Curve’ are being organised starting later this month for colleagues. The programme helps employees manage the uncertainties and challenges which arise from the announcement on 1 February and provides some techniques and tips to prepare for change.
• Support has also been provided to Colleague Forum representatives by the Company to assist these individuals to carry out their role as representatives and also to help them manage change themselves. Training is being provided by IPA and a TUPE briefing has been provided by external employment lawyers.
• Regular site Senior Leader Forums are being held and the Colleague Forum representatives have a standing slot on the agenda, both to provide an update on Forum activities but also to provide the opportunity to solicit feedback and any necessary support required from the site senior leadership cohort.
• The Company is having regular meetings with Unite union representatives.
• As noted above, a critical role is played by Line Managers in supporting employee direct reports.
Spin Outs Advice
Following the 1 February announcement a ‘Spin Out and Colleague Initiatives’ workstream has been established which is exploring opportunities to retain talent at Sandwich and utilise the facilities and assets that exist. These options are being supported by the Business Development function in Pfizer.
Pfizer is collecting expressions of interest for any such opportunities relevant to Sandwich facilities, talent or assets in a concise Business Opportunity Form. Pfizer is also preparing some training and information events about starting a business in a Spin-Out Information Event (15 and 16 March). This two-day event has been scheduled to provide support and advice to anyone currently developing ideas in this space. The event will feature talks as well as interactive sessions run by professional trainers from the British Venture Capital Association. Programme topics include:
• Writing a business plan to interest Venture Capitalist • Raising finance • Understanding investors • Protecting and managing Intellectual Property • Incorporating a company • Running the business • Developing an exit strategy
Depending on demand a second event covering the same material may be held in late March or early April. For colleagues looking to set up a more general business a separate set of training sessions will be provided in coming weeks as part of the outplacement support programme.
The Spin-Out workstream has put together a list of online resources that will be of interest to colleagues looking to find out more about how to set up and run their own business.
Q57 When exactly Pfizer stopped recruiting and how many job offers were rescinded?
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Recruitment at the Sandwich site is handled at different levels of managerial responsibility. As Site Head, Ruth McKernan is directly responsible for senior level appointments at the site, but recruitment to posts more widely is performed by managers at various levels across the organisation. As soon as Dr McKernan became aware of the potential changes, she personally made the decision that she would not continue recruiting senior-level people until she was confident that it was prudent to do so.
As Pfizer’s R&D Review involved only the most senior decision makers in the Company, and information about it was restricted to them, the Site Head was not in a position to communicate the possible closure to recruiting managers without compromising the confidential nature of the Review.
Therefore in some cases recruitment continued up to the day of the announcement. It is worth noting that due to contractual notice periods, recruitment is a lengthy process and offers are generally made many months prior to actual employment starting.
Once senior management at Sandwich were in a position to act, all potential recruits were immediately contacted and informed of the situation. To date, we have rescinded 12 job offers and 62 Industrial Trainee placements. It is of course a matter of regret that this has affected some colleagues who have recently joined the Company, and we will be doing all we can to help them secure future employment.
Q97 Whether Pfizer lobbied for, and derived benefit from, the £87m road improvement scheme?
The East Kent Access Scheme, which was designed to improve road access to the general East Kent area comprises two phases. The first was completed in 2007 and the second phase, which we understand is costing £87m, is still on-going. Given the indirect benefits of the Phase 1 works, Pfizer made a financial contribution (£1.6m as a part of the compulsory purchase of the land in 2003) to the funding of East Kent Access Phase I, and has supported Kent County Council and Dover District Council’s case for East Kent Access Phase II (EKA II). This was done in response to requests from Kent County Council and Dover District Council. EKA II only has a very indirect impact on the Pfizer site.
EKA II comprises the A256 from Richborough to Lord of the Manor and last bit of Thanet Way along the frontage of Manston. Full completion is expected in March 2012.
Q99 Details of the partners with whom Pfizer is negotiating for the disposal of the site.
Pfizer is writing separately to the Committee Clerk with this information.
Further Matters of Clarification
At Question 59 Ms Nash said “The Committee has also been made aware that the company has been trying to make the contracts given to Pfizer employees similar throughout the world, so that they all have the same rights. That has resulted in the UK staff having their severance entitlement reduced from three and a half weeks to two and a half weeks for every year that they have worked for the company. Was that decision made in the knowledge that this large redundancy may happen in the near future?”
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We would like to clarify that the severance package has not been reduced as described above. Pfizer’s standard redundancy terms are 3.5 weeks’ salary per year of service for staff aged 45 and under, and 4 weeks’ salary per year of service for those staff aged 46 and above.
The standard redundancy terms are now subject to the 90-day Employee Consultation process which is currently underway. Under the consultation process, the terms may still be subject to change, however they cannot be reduced.
There was a global review of terms and conditions following Pfizer’s integration with Wyeth. However, Pfizer is not making contracts similar throughout the world. Contracts are subject to the correct employment terms in each country.
The timing of Pfizer’s decision making process in relation to Sandwich
In the evidence session with Pfizer on 28 January and that of 2 March with David Willetts MP there was discussion with respect to Pfizer’s recruitment of staff at Sandwich once the proposal had become known by the Site Head, and also with respect to what dialogue there should have been between the company and the UK Government about its proposal to exit the Sandwich site, prior to that decision being announced.
To ensure there is clarity on this matter we would like to re-state the position.
In November 2010, Pfizer was in the planning phase of its R&D acceleration strategy, and there was a recommendation to exit the Sandwich site, but the final decision to exit Sandwich had not been taken. In November 2010 senior level colleagues were examining the assumptions that were being made about the future of Sandwich; the decision was not final at that point. As Pfizer stated to the Committee on 28 February, the decision to exit Sandwich was finalised by the Pfizer Board in January 2011.
Dr Ruth McKernan Senior Vice President Pharma Therapeutics Research Units UK, Pfizer Inc. March 2011
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Written evidence submitted by Laura Sandys MP, Roger Gale MP, Charlie Elphicke MP, Damian Collins MP and Julian Brazier MP (PZ 04)
The Pfizer Announcement
The impact of the Pfizer closure on East Kent cannot be overestimated. While the headline figure in relation to redundancies has been 2400, the impact includes:
• Redundancies for thousands of additional contractors on site • Impact on local suppliers to Pfizer • Reduction of the spending power of employees within the local economy • Withdrawal from supporting local community groups, charities and science and technology education
This closure would have a dramatic impact on any part of the country; however the increased significance of this decision is compounded by the economic environment in East Kent.
• Currently the average wage is £17,000 – the lowest in the South East and one of the lowest in the country • The impact of losing the largest high paying employer in our area will have a significant effect on the average wage / disposable income in East Kent • There are no similar jobs available in East Kent with Pfizer being the largest employer other than the Port of Dover • Deprivation in East Kent rivals many parts of the North East and Northern industrial towns with Thanet ranking as the 64th most deprived district in the country
Actions of the company:
• The Model: While there are new models emerging in the pharmaceutical sector with some companies divesting themselves of their research capacities, there are also others who are choosing a different model and buying research capacity. Pfizer has taken the former route while some Swiss based companies are increasing their portfolio. Will Pfizer merely emerge as a packaging and marketing company with some limited research into the future? • Manner of withdrawal: The company could have made a staged withdrawal migrating their operations to other companies or promoting the creation of new companies over time. The dramatic announcement has undermined the value of their assets - both the potential value of spin off companies and the property - and has not provided the locality time and space to plan for a new future. • Staff Retention to secure a future of the site: The ability for Government, Kent County council and the Pfizer management at Sandwich to identify replacement activity on the site has been significantly hampered by the short time scale that we have been given. Crucial to the future of the site is retaining the key staff and all staff have been placed on a 90 day consultation period with the widely held perception that redundancy notices will be issued straight afterwards. We are urging the company to extend that period to allow for us to work on securing a new future for the site and give the employees some greater understanding of the exact timeframe. • Confidence in Management: There are dedicated local managers who are committed to deliver the best future for the site and the employees; however the reputation of the company following closures in other parts of the world has significantly undermined confidence with the staff. • Dialogue with Government: It is extremely unfortunate that the company did not feel that it could have opened a dialogue with Government prior to their decision to close the site. While the nature of this announcement is market sensitive some discussions - however oblique - would have offered a greater opportunity for Government with all its resources to consider the situation and put plans in place. • Awaiting Clarity: There are still some important questions unanswered in terms of the company’s plans for the site and the staff. What is the future of the site – a site that they own and are liable for into the future – contamination / flooding / maintenance; the timeframe of their withdrawal in terms of each different field of research/activity; the legacy that they aim to leave in East Kent; the nature of potential Pfizer contracts that could be given to spin off companies to help kick start a new community of smaller operators on the site; and their commitment to Life Sciences in the UK into the future. • Employee information: Communications with staff has been patchy in their view. The options in terms of the future of the site that might be open to them are not widely known or understood. We have urged the company to take communications very seriously and to do all they can to retain confidence in the future of the site with their staff. • Contractors: There is a major concern about the lack of information / advice / support for the many contractors on the site. They have received even less information and are extremely concerned about their futures. We have urged the company to treat contractors in a similar manner to employees in terms of communications and work more closely with the contractor companies to ensure that information is effectively cascaded through the organisation. • Global Employment Contracts: We have been informed that contracts have been changed over the last few years. This was in order to create similar contracts across Pfizer’s operations around the world. This resulted in employees in the UK losing some of their severance entitlement – from 3.5 weeks per year worked to 2.5 weeks. There has been concern that this was implemented with the knowledge that large redundancies would be required in the foreseeable future. • New Recruitment: The company has been recruiting new staff onto the site even up until January. We have been approached by several people who have joined since October – having moved home / changed employers (thereby losing previously held employment rights) / relocated children in new schools. With the knowledge that the site was at risk were these appointments responsible?
The Future
It is important that the committee recognises that the Sandwich site – both the employees and the equipment / facilities – are world class. We have a national asset that needs to be regarded as an important part of the UK’s Life Science future. Losing the employees will be a body blow to the local economy, but if some of these leading scientists leave the country, the UK will also lose out.
There are many different visions for the site but there are three levels of activity being prioritised:
• A Life Science Service Hub: The skills and equipment on site could become a national science and technology asset that could service the rest of the sector – both in the UK and across Northern Europe. This model could include some larger CRO operations with satellite hub companies providing world class services to the Pharmaceutical sector and securing a wide range of clients beyond Pfizer. This however requires some strong commitment from Pfizer to support these spin-offs with some contractual relationships into the future; sensible property rents and service charges; and most importantly more time in terms of retaining staff on site beyond the 90 days so as not to create a hiatus with staff migrating from the site in the immediate future. • New uses for the rest of the site – There are several key opportunities particularly if transport links were enhanced. It is a significant sized site with a range of possibilities. Some of the staff have transferrable skills particularly in the field of technology / education / wider scientific applications. There is already a range of interested parties and concepts being proposed from Technology centres through to renewable energy projects. • A strategy to support the East Kent Economy: The underperformance of the East Kent economy needs to be addressed. With economic indices that are more in common with the north of England than in the South East; high dependency on public sector work; reliance on Pfizer as one of the few premium employers and bad transport links, East Kent is very vulnerable economically.
However we have an opportunity to establish an exciting and vibrant science service Hub (Life sciences and beyond), that would not only attract businesses from within the UK but is also geographically located to service companies across Northern Europe. These options however are predicated on Pfizer’s commitment to support this process by giving staff a long term employment horizon (retention on site) and by maintaining focus on striking deals with replacement companies for the site.
The Government
The government has moved into action extremely fast establishing the Sandwich Taskforce with the Rt Hon David Willetts MP deeply involved. The mobilisation of government resources and expertise- at both national and Kent level - has been very impressive. Government ministers across other departments are involved and their commitment to finding a long term solution is evident.
There are four key commitments that we require from Government:
• On-going commitment to finding a future or futures for the site – this is not something that will be resolved quickly • Continued leadership from Government in our discussions with Pfizer about their commitment to the site and the staff • Economic incentives to locate businesses in East Kent and on the Sandwich site • Continued interest from other departments – Transport in particular – to resolving the long term under-achievement of the East Kent Economy
Laura Sandys MP, Roger Gale MP, Charlie Elphicke MP, Damian Collins MP and Julian Brazier MP
February 2011 Written evidence submitted by Professor Colin Blakemore (PZ 05)
I am delighted to see that the S&T Committee has responded so quickly to the worrying news that Pfizer is closing its Sandwich facility. Although this has been presented as simply a consequence of global 'restructuring', I think that it has to be seen in the context of a pattern of withdrawal of major pharma (and many smaller pharma and biotech) companies from this country.
This is extremely disturbing, for many reasons, e.g.: 1) The pharmaceutical industry has been a shining illustration of the UK's ability to push innovation through to successful products. One third of drugs on the market were developed in the UK. 2) Pharma contributes a very large fraction of the total industry Expenditure on Research and Development (ERD) in the UK. Since the fraction of GERD provided by industry is notoriously low in the UK, compared to that in all our major competitors, the reduction of R&D investment here is a real embarrassment. 3) The last government and the present government have both identified biomedical research as a priority area and have expanded or at least protected funding for it. The Department of Health NIHR budget of well over £1 billion, is almost entirely spent on schemes designed to help innovation and, particularly, to enhance the environment for clinical trials in the UK. But the world's fraction of clinical trials done here has actually decreased since the introduction of these generous spending packages.
I think that the Pfizer decision mustn't just be swept under the carpet. It's a wake-up call, and we should take it as the stimulus to think again about how we use the substantial public funding that we put into medical research.
Although the changes introduced after the Cooksey Report were aimed at stimulating R&D investment by pharma in the UK, they have not had this effect. Paradoxically, during the consultation for the Cooksey Report, the pharmaceutical industry (especially the ABPI) said that what it valued most about the UK was the quality of the fundamental science base, on which it could draw for well-trained researchers and collaborations. Basic biomedical research has been relatively poorly treated during the past 5 years, and the success rate for basic science grants from the MRC is falling to unacceptable levels.
I think that we need to look again at the balance of funding for basic, translational and applied clinical research, and to do so in the light of a serious consultation with pharma and biotech.
Colin Blakemore FMedSci HonFRCP FRS Professor of Neuroscience, University of Oxford February 2011 Written evidence submitted by The Rt Hon David Willetts MP, Minister of State for Universities and Science (PZ 06)
Correction to an answer to a Parliamentary Question
When I answered your question tabled on 1 February 25, 2011
Andrew Miller: To ask the Secretary of State for Business, Innovation and Skills what meetings he has had with representatives of Pfizer (a) before and (b) after its decision to close its research and development site in Kent. [38427]
I advised you:‐
Mr Willetts: The Prime Minister met Jeff Kindler, CEO of Pfizer Inc, on October 21 and they spoke on the telephone in December 2010. I met Ian Read, Jeff Kindler’s successor, on 24 January 2011 at 10 Downing Street and officials have since held several discussions with the senior management of Pfizer UK.
I regret that because of an error by officials the actual date that the Prime Minister met Jeff Kindler was 21 July, not 21 October, and the telephone conversation took place at the end of November 2010, not December. We will arrange a correction in the Official Report and will advise the company and your Clerk to the Science and Technology Committee of the error, where Pfizer and I are due to give evidence to you next week.
The Rt Hon David Willetts MP Minister of State for Universities and Science Department for Business, Innovation & Skills
25 February 2011 Supplementary written evidence submitted by the Department for Business, Innovation and Skills (PZ 06a)
Letter from The Rt Hon David Willetts MP, Minister for Universities and Science, to Andrew Miller MP, Chair of the Science and Technology Committee, 25 March 2011
Thank you for your letter of the 16 March on the decision by Pfizer to exit the site at Sandwich. Your letter highlighted:
▪ The future viability of the site at Sandwich, including the role Pfizer can play ▪ How will we sustain pharmaceutical industries in the UK.
I am pleased that Pfizer continue to pay a full role in the Sandwich Economic Development Taskforce. The Sandwich Economic Development Taskforce believes there is an opportunity to take advantage of the changes in the global pharmaceutical industry to build a new economic future—capitalising on the potential for new employment in smaller, research intensive enterprises as well as other high‐tech businesses. As you are aware the Task Force has sent in its first report, it expects to send through a second report in April.
To address the potential loss of skills, the Taskforce has set up a special skills group, which includes Pfizer, to provide a comprehensive package of support for all staff at Sandwich. This package ranges from 1:1 counselling and careers advice through to CV writing, interviewing techniques and retraining. Pfizer has contracted an outplacement company to provide these services for its staff; Department of Work and Pension’s Rapid Response Service, Skills Funding Agency University of Kent and other government organisations will provide a similar service for non‐Pfizer staff.
In the first report, the Taskforce recommended that Government work with it to establish a Research, Innovation and Technology Zone and to improve local transport links to stimulate business growth. In his Budget, the Chancellor announced that twenty‐one Enterprise zones will be established. While, eleven have been announced, a competition will be run for the remaining ten. Proposals to improve transport in East Kent are still being considered.
You also note the importance of a clear Government policy for life sciences. You will be aware that life science sector was chosen as one of the first sectors under the Growth Review process. We have now published a package of measures to support further growth in this sector a summary of which is set out in the attached note.
Furthermore, my officials are undertaking work to consider the changing dynamic in the life sciences industry and how we can ensure the UK is well‐positioned to take advantage of emerging opportunities. This work is at an early stage and I will be happy to provide further details in due course.
The Rt Hon David Willetts MP
25 March 2011
Annex
The Rt Hon David Willetts MP, Minister for Universities and Science, and Lord Howe, Parliamentary Under‐Secretary of State, Department of Health, 25 March 2011
Government action to strengthen the UK’s position as a leading location for life sciences
Life sciences is an area of UK strength, and one where we have a real comparative advantage. The Government wants to ensure the UK remains a leading location for life sciences investment, and a strong base from which to export. The Government and NHS already enjoy a strong relationship with the industry, and by working closely together we have already achieved a great deal. However, we are keen to do more to support the sector—and today are announcing a package of further actions, building on the positive developments resulting from the Life Sciences Blueprint and other existing initiatives.
Healthcare and Life Sciences was identified as one of the first sectors for consideration under the Growth Review. We wrote to you at the end of last year asking you to identify areas where more could be done to create the conditions in which UK life science businesses can thrive.
We are extremely grateful to you for the contributions you provided to a very tight deadline. We have considered these carefully in drawing up the package of actions announced alongside today’s Budget.
The full detail of each new action is set out in the Plan for Growth, a copy of which is enclosed with this letter.
In summary, we have today announced that the Government will:
▪ Set up a new health research regulatory agency to streamline regulation and improve cost‐effectiveness of clinical trials. It will make future NIHR funding to providers of NHS services conditional on meeting benchmarks, including a 70‐day benchmark to recruit first patients for trials
▪ Form new Translational Research Partnerships from its £755 million investment in NIHR Biomedical Research Centres and Units, building on the pilot Therapeutic Capability Clusters
▪ Reduce perceived gold‐plating and increase the proportionality of our domestic implementation of the EU Clinical Trials Directive (CTD), whilst also seeking to influence the European Commission and Parliament strongly with a view that they bring forward soundly based proposals for the necessary changes to the directive as early as they can
▪ Create unique opportunities for research in the UK, using the national span of the NHS to offer, with proper safeguards around patient confidentiality, linked information on treatments and outcomes on a scale nowhere else in the world can match
▪ Remove any barriers that limit the further development of geographical clusters, working with industry, local government, universities, NHS and funders
▪ Launch a competition to form a Cell Therapy Technology and Innovation Centre
▪ Through Cogent, improve market signalling by bringing companies and educators together to ensure educators provide the skilled individuals the sector needs to grow
▪ Support the Society of Biology as it rolls out is accreditation scheme for biological sciences degrees
▪ Ensure that the Intellectual Property (IP) system supports life sciences businesses through a package of actions
▪ Encourage more innovation in healthcare by working with the Technology Strategy Board to see £10 million spent over the next two years on Small Business Research Initiative competitions that address specific healthcare problems
▪ Ask the NHS Chief Executive to provide a report by November 2011, working in consultation with industry, academia and other interested parties, on how the adoption and diffusion of innovations can be accelerated across the NHS. This report will inform the strategic approach to innovation in the modernised NHS
▪ Establish a proactive, entrepreneurial NHS Global to make the most of the NHS brand internationally and to offer support and advice to NHS Trusts
Furthermore, we have announced actions in the area of social care. Here, we will:
▪ Take forward a package of measures to improve the take up of assisted living technology solutions
▪ Strip out unnecessary regulations that were creating an unequal playing field for microenterprises and were never intended to impact on the social care market
▪ Address barriers to skills development in the social care market
These actions on social care are just the beginning of an ongoing project between our two departments which will continue to identify and address barriers to growth in the social care market; including through better use of technology and improving the interface between health and social care.
The measures set out above and in full in the Plan for Growth are not the only actions we are taking across Government to ensure a supportive business environment for life sciences companies:
The ongoing programme of NHS modernisation will offer opportunities for the life sciences industry. The Government’s vision for the NHS was set out in Equity and Excellence: Liberating the NHS, and the legislative framework is now being established through the Health and Social Care Bill. This introduces clinically‐led commissioning, with providers freed up to innovate and be rewarded on the basis of quality and patient choice, overseen by robust quality and economic regulation. This is one of the steps Government is taking to achieve its goal of an NHS which achieves results that are amongst the best in the world, and where innovation drives sustainable improvements in quality and efficiency.
The life sciences industry is an important stakeholder in this programme and we are grateful for your responses to the consultations we have issued. We will continue to engage with you as we take forward this work. We very much value the close working between Government and industry to explore issues and develop solutions through the Ministerial (bio‐ pharmaceutical) Industry Strategy Group (MISG), the Ministerial Medical Technology Strategy Group (MMTSG), and the Senior Industry Group (SIG). Close working between the industry and the NHS is also crucial—the NHS Life Sciences Innovation Delivery Board (LSIDB) brings together leaders from the NHS, industry and Government in a way which will make a difference at local level.
The Research Excellence Framework (REF) and reforms to Higher Education Innovation Funding (HEIF) announced earlier this year provide greater incentives and rewards for academics and universities to deliver impact on the economy and society. In parallel, the Research Councils and the Technology Strategy Board are funding projects that bring together universities and businesses in new collaborations.
Last week, the Ministry of Justice published the Government’s draft Defamation Bill. This aims to bring libel law up to date, striking the balance between protecting people’s right to free speech—including the debate so vital to the scientific process—from unjustified libel actions, while enabling people who have genuinely been defamed to protect their reputations. In addition to the Growth Review actions we have announced today, the Budget included a number of further positive announcements for the industry:
The Government will increase the SME rate of R&D tax credit to 200 per cent from April 2011 and 225 per cent from April 2012, and simplify the R&D tax credit schemes including allowing relief through the large company scheme for subcontracted activity which forms part of a wider R&D project. The Government will publish a response to the consultation in May 2011, which will include a consultation on the detail of proposed changes.
The Government reform the Enterprise Investment Scheme (EIS) and Venture Capital Trusts (VCT), subject to state aid approval, increasing the rate of EIS income tax relief to 30 per cent from April 2011 and bring forward proposals to provide further support for seed investment, simplification of the EIS rules by removing some restrictions on qualifying shares and types of investor and refocusing both EIS and VCTs to ensure they are targeted at genuine risk capital investments.
Effective from 6 April 2011, the lifetime limit on capital gains qualifying for Entrepreneurs’ Relief (where eligible gains are taxed at a 10 per cent rate of Capital Gains Tax) will be doubled to £10 million. This will encourage serial entrepreneurs who want to expand their business and reinvest gains, helping to make the UK a more attractive location for entrepreneurs.
We will publish a further consultation on the introduction of a Patent Box in May 2011 setting out details on how the regime will operate, followed by draft legislation in autumn 2011. The Patent Box will provide a reduced 10 per cent corporate tax rate for profits from patents, which will encourage UK businesses to retain high‐value jobs associated with commercialisation of patents and to invest further in innovation.
An extra £100m capital spending this week will enhance major research facilities at Norwich, the Babraham Research Campus in Cambridge, Harwell and Daresbury. These will support cutting edge research and its contribution to the economy for years to come. In relation to life sciences, the Babraham Research Campus forms part of the Cambridge science and innovation cluster, with a strong track record in supporting innovation through the nurturing of biotech start‐ups and SMEs. Additional investments of £44m will be focused on replacing the existing Transgenic Mouse Facility, providing additional bioincubator space, and investing in further infrastructure improvements. Such improvements are expected to be key to attracting and nurturing SMEs to the site.
The Government will launch the first Technology and Innovation Centre in high‐value manufacturing, which will integrate the activities of a number of existing high performing centres in Rotherham, Coventry, Strathclyde, Sedgefield, Wilton and Bristol. The integrated centres will take a wide cross‐sector approach and embrace most forms of manufacture including bio‐processing.
To address the specific barriers faced by SMEs in accessing apprenticeships, the Government will support business consortia to set up and maintain advance and higher apprenticeships schemes, supported by grants, creating a further 10,000 apprenticeships.
To encourage exports, the Government will deliver a new package of support through UKTI to help SMEs with an ambition to break into overseas markets, and use FCO and UKTI to provide UK businesses with local intelligence on high value projects overseas and intensive support to win these deals.
Recognising the particular burden that new regulation places on small businesses, the Government will exempt micro businesses (i.e. businesses with fewer than 10 employees) and genuine start‐ups from new domestic regulation. The moratorium will last for three years, affecting all regulation due to start from 1 April 2011 onwards.
Thank you for your ongoing involvement in our work to improve the UK business environment for the life sciences industry. We very much value the close working relationship that exists between Government and the industry. We also recognise that there is more work to be done to ensure the UK offers an attractive environment for life sciences and we look forward to working with you on this.
The Rt Hon David Willetts MP Minister for Universities and Science
Lord Howe Parliamentary Under‐Secretary of State for Quality