The creation of pharmaceutical innovations also has significant economic benefits – R&D costs, spending on clinical trials, and investment in manufacturing are all substantial economic activities that boost Gross Value Added (GVA) for a country. In the UK alone, the life sciences sector is responsible for over £43bn in GVA annually, with almost half of that coming from pharmaceutical manufacturing (£19.2bn). This represents around 7% of the UK’s total GVA, which is a larger share than other sectors such as construction, education, and IT & communications. The sector also provides a large number of diverse, well-paid roles, with over 300,000 people directly employed in the UK and some 646,000 jobs supported across the economy.
However, despite the UK operating a single-payer health system, the variation seen across the country when it comes to the adoption of the latest medical innovations is unwarranted. There are also a number of studies that demonstrate a direct link between economic deprivation and access to the highest standards of medical care. Internationally, patients in France and Germany are five times more likely to receive a new medical treatment compared to patients in the NHS.
One of the key reasons for this is the relatively low levels of investment the UK makes in medicines as a percentage of its healthcare budget – the UK spends less than 10% of its health budget on medicines, versus 12% in France, 14% in Germany, and 18% in Japan. In addition, across a number of disease areas the UK sees poorer health outcomes – for example, the death rate from all types of cancer per capita is around 0.15% in the UK, versus 0.14% in Germany and France, and 0.13% in Japan. Even if medicine uptake rates improved, patients need to be diagnosed before receiving treatment – and the UK has the lowest levels of basic diagnostic equipment (CT scanners, MRI units, and PET scanners) per capita among most advanced economies.
This failure to adopt and fully utilize innovative medicines is impacting the investment companies are making into UK life sciences. Having been 3rd among major economies for inward investment in 2017, the UK slipped to 8th in 2022 – with Foreign Direct Investment (FDI) shrinking by 50% during that period. This is despite the fact that the UK hosts the largest life sciences research campus in Europe in Cambridge, has the second largest public healthcare R&D budget of any advanced economy, and the third highest share of medical sciences academic citations.
Whoever wins the general election, we need the next Government to recognize these challenges and make concerted efforts to seize the opportunities the UK has to be a genuinely global leader in life sciences. The way the country assesses and adopts new medical innovations needs to be transformed, unwarranted variation and equity of access need to be addressed, and efforts to make the UK the most attractive destination in Europe for inward investment in life sciences should be redoubled.
