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Driving Global Competitiveness of the UK's Life Sciences Ecosystem Document Number PP-PFE-GBR-0391 Driving Global Competitiveness of the UK’s Life Sciences Ecosystem For the benefit of UK patients, the economy and the NHS PP-PFE-GBR-0391 April 2017 Foreword Erik Nordkamp, Managing Director, Pfizer UK Today every one of the top 20 global of global R&D, especially in high value, late stage pharmaceutical firms has a presence in the UK, R&D, is in patient access to the best medical investing billions of pounds in research and treatments. This analysis tells us that it is the third development, creating tens of thousands of jobs, most important factor in making investment making a significant contribution to the health and decisions and the UK trails significantly behind. wealth of the UK. The encouraging conclusion of this analysis is that Pfizer commissioned this analysis to inform our reducing this access gap could lead to an response to the Government’s Industrial Strategy estimated additional £705m in GVA per year and consultation as it looks to strengthen a globally 4000 jobs, many of which would be high skilled competitive UK life sciences sector. As a global jobs in the UK life sciences sector; generating an company we see many emerging and developed estimated additional £244m in tax (which benefits economies increasingly grow and strengthen their the NHS); and giving UK patients better access to medical R&D capabilities. Some of those countries the latest medical innovations. are benchmarked in this analysis – US, Singapore and Switzerland. This is a prize worth aspiring to and we as industry are committed to working with the Government and This analysis tells us that to have a competitive life the NHS to make sure the UK remains a global sciences sector a holistic ecosystem is needed. leader in the development and use of new medical The analysis finds that the UK is world leading on technologies. the two most important factors of that ecosystem – a strong science and academic base, and a highly skilled and highly productive workforce in life sciences. The area where the UK is significantly trailing behind its competitors on attracting a share PP-PFE-GBR-0391 March 2017 Driving Global Competitiveness of the UK’s Life Sciences Ecosystem Page | 2 Foreword Jo Pisani, Partner, PwC Strategy& In the UK we have a vibrant pharmaceutical and life If access were improved we estimate that 4000 sciences sector which makes a significant new UK jobs could be created by 2021 (many in contribution to our overall health and wealth – the R&D), and £705m in Gross Value Added (GVA) UK is responsible for discovering and realised each year thereafter, in addition to health developing many of the world’s medicines, and the and welfare benefits and further consequential pharmaceutical sector supports £15.7bn in GVA, increases in commercial and manufacturing jobs. and 312,000 jobs, employing 71,000 people directly and supporting a further 241,000 jobs through the Of course, improving access is complex, but there supply chain and economy. is opportunity for the UK to enhance its competitive edge to benefit patients, the NHS, and the Our analysis shows that UK competitiveness economy. By agreeing a shared aspiration to requires top performance across several factors improve patient uptake of new medicines, a range and through interviews with sector leaders we of approaches can be explored. These could found: academic & leading edge science, workforce include the adoption of innovative pricing models, & skills and access to medicine are the most implementation of the Accelerated Access Review, important of these. or multi-year NHS budgets. Achieving this will require greater collaboration across industry, the A benchmarking exercise examining the NHS, Government and patients. performance of France, Germany, Japan, Singapore, Switzerland, the UK and US, We thank all the contributors to this report and look demonstrated UK excellence in academic & leading forward to working with you all to drive UK edge science and workforce & skills. However, a competitiveness in life sciences and UK health and significant lag is seen in patient access to new wealth, into the future. medicines. In fact UK patients accessed significantly less new medicines in the first year of launch when compared to patients with the same diseases in the benchmark countries. This trend was consistent in products with and without NICE recommendations and across disease areas. PP-PFE-GBR-0391 March 2017 Driving Global Competitiveness of the UK’s Life Sciences Ecosystem Page | 3 Pfizer Ltd commissioned analysts from PricewaterhouseCoopers LLP "PwC" to develop the methodology and perform the analysis detailed in this report. This analysis has been prepared only for Pfizer Ltd and solely for the purpose and on the terms agreed with Pfizer Ltd in our agreement dated 10th January. PwC accept no liability (including for negligence) to anyone else in connection with this analysis. Pfizer Ltd has been involved in the scope and methodologies of the analysis and had final editorial control of the report. PP-PFE-GBR-0391 March 2017 Driving Global Competitiveness of the UK’s Life Sciences Ecosystem Page | 4 Executive summary Key findings The UK Government seeks to become a globally-unique and internationally competitive life sciences ecosystem that delivers health and wealth and supports NHS transformation. This analysis revealed that workforce & skills, academic & leading edge science and access to medicines are the three most important ecosystem factors in achieving this vision. The UK is globally competitive in academic & leading edge science and workforce & skills, it is in- line with other leading countries in fiscal incentives and clinical trials infrastructure, but lagging behind significantly in access to medicines. This analysis found that UK patients have significantly lower uptake of new medicines (up to 75% by volume per capita) in their first year of launch. It then takes on average almost two years to catch up with the next lowest uptake country. Even with NICE approval and ‘novel’ designation UK patients have up to 64% lower uptake (by volume per capita). If the UK reduces this “access gap” in new medicines available to patients it could better support growth in the life sciences ecosystem: 4000 new jobs could be created by 2021 and £705m in Gross Value Added (GVA) realised each year. It could also stimulate healthcare improvements for patients, support NHS transformation and UK R&D. As well as generating job and economic value, this would revise the current situation where the UK has a strong record in developing some of the world’s cutting edge medicines but patients in the UK have significantly less access to new medicines than in other countries with strong life science hubs. Looking forwards, NHS challenges, the need for cost containment and the unique strengths of the NHS, such as universal healthcare free at the point of delivery, must be recognised. This analysis has identified opportunities to collaborate across the health system and industry to improve access to new medicines and support cost containment through: Agreeing an aspiration to improve patient uptake of new medicines (e.g. bringing the UK broadly in line with comparable peers based on GDP per capita, population and health system dynamics such as France and Germany, by 2021), and Exploring a range of approaches such as the adoption of innovative pricing models, that support both patient access to new medicines and NHS cost containment. This report aims to provide a useful basis for further discussions on how this successful life sciences sector can continue to drive UK innovation, health and economic benefit, into the future. PP-PFE-GBR-0391 PPMarch-PFE- GBR2017-0391 March 2017 Driving Global Competitiveness of the UK’s Life Sciences Ecosystem Page | 5 What is the level of innovation and opportunity for a stronger life sciences productivity in the UK’s life sciences sector that benefits the economy, the NHS sector? and patients in the UK. The UK has a strong academic base, In conducting this analysis PwC Strategy& have: leading edge scientific institutes, an active performed a literature review of 19 reports to determine 12 ecosystem factors that impact investment market and the NHS. This innovation, selected 6 countries to benchmark UK creates a vibrant pharmaceutical sector, performance against and conducted 33 stakeholder with high productivity, jobs and economic interviewsiv. The interviews have sought to value (£9.6bn in direct GVA and 71,000 in determine: the relative importance of different ecosystem factors on innovation and how access to direct employment). medicines compares, UK performance against benchmark countries on each ecosystem factor The UK Government’s ambition is to become a and the impact of an improved access scenario on globally-unique and internationally competitive life innovation i.e. R&D (split by early and late stage), sciences ecosystem that delivers health and wealth Manufacturing (advanced therapy medicinal and supports NHS transformation. products) and Commercial (specialist functions). The pharmaceutical sector supported £9.6bn in direct Gross Value Added (GVA) in 2015, and a further £6.1bn through the supply chain and in the What are the most important factors economy. It employed 71,000 people in the UK and supported a further 241,000 jobs in the economy, driving investment in innovation? i and contributed £4.1bn in tax payments to the UK , To drive international competitiveness of a of which ~20% flows to the NHSii. Pharmaceutical manufacturing has one of the UK’s highest levels of life sciences ecosystem the most productivity. The UK’s pharmaceutical important factors are workforce & skills, manufacturing sector boasts 40% higher academic & leading edge science and productivity levels than Germany and 80% higher patient access to medicines. than Franceiii and the UK has the largest pipeline of biotech products in Europeiii. To attract life sciences innovation the UK requires Yet the UK cannot be complacent.
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