‘Concern’ for the future of Big Pharma in Britain, not just Pfizer
Why did Pfizer really pull out of Sandwich in Kent? It is a matter that the Government should take very seriously. Possibly more seriously that they are at the moment. I have detected a certain amount of “Move along, nothing to see here” about the closure of Britain’s largest foreign-owned research and development facility. The key message from the Government: it was a corporate decision, reflecting global pressure, nothing to do with us, and nothing we could have done.
Today’s appearance by Pfizer executives at the House of Commons Science and Technology Committee confirmed this official view of events. Pfizer had bought another pharmaceutical giant Wyeth, and then chosen to greatly reduce its global R&D footprint. Sandwich was focussed on non-priority areas. There’s also a lingering suggestion that Sandwich’s geography at Britain’s edge rather than inside the Golden Triangle cluster (London-Oxford-Cambridge) counted against it.
However, it should be of no surprise that having pulled the plug on the facility in Sandwich at a time of growing concern, Britain’s biggest medicines supplier did not stick the knife in. Because the industry, particularly the foreign-owned pharma giants may soon be voting with their feet, adding to the Pfizer decision.
That is why the new CBI Director General John Cridland has chosen to speak out to me on a visit to Eli Lilly’s facility in Surrey. “I’m concerned about the future of pharma in the UK …. I think Government has taken the sector a little bit for granted. I’ll say it on behalf of the sector. They need to feel loved and wanted. The UK is not as good a place to invest as it was three years ago when we went into recession.”
And contrary to government suggestions that this is an isolated case, Cridland told me: “We have lost several thousand research and development jobs from pharma in the UK over the last three years. That’s happening partly because of global factors but partly because of local factors.”
So yes there is a seismic shift in pharma away from giant single company campuses towards more nimble startups. Yes, Big Pharma all round the world is under pressure from increasingly aggressive government pricing, expiring blockbuster patents, and dwindling government incentives. But there are specific UK factors holding back what should be a poster child industry for Britain.
Mr Cridland spelt out his new fears: “So many other countries in the world are looking at tax. The patent [Box] tax proposal – we’ve got to make sure that all the pharma companies in britain can make use…”
And whether the NHS should pay the cheapest price or try to offer support for the industry? “The Government should always look for value for money – all we expect of government is that when looking for value for money they also think about value for money for international shareholders. [We need to do] the right thing for the health service but also give reasons for businesses to continue to invest here.”
Two big issues. First a lingering suspicion among foreign Big Pharma that Britain’s tax breaks are weighted towards domestic domiciled companies, GsK and Astra Zeneca. That applies to the R&D tax credit and the new Patent Box. Second the Coalition’s announced move to “value-based pricing” for NHS purchases though a valuable, understandable response to the need to cut NHS costs, will have unwanted and unforeseen consequences. I’ll say it because the industry and the Government can not. Pharma is tacitly subsidised, some might say bribed, by over-the-odds payments for drugs in the US and UK, both of which house a disproportionate amount of the world’s R&D. It might have been right to break that compact, first with NICE, then with VBP. But do not act surprised when the jobs flee.
Other countries are now muscling in. Listen to the clip in my report from Thom Thorp of Eli Lilly. A clear reference to the fact that although Britain has the Chemistry Nobel Prize winners, China and India are now beginning to match the UK. They are bigger markets too. And they’d have no problem coughing up for the next generation of R&D facilities.
Remember these jobs, and 6,000 in total have been lost recently, are the very jobs that we were told that would be kept in Britain as low value exports went East. That notion seems optimistic. So is the answer to kowtow again to Big Pharma? Can we afford not to? If we are trying to go with the flow of the new industry realities, do we really have the money to pour into new sites, when science budgets are being cut in real terms, and the capital budget is being slashed.
In Sandwich the local Regional Development Agency has been axed. Yes the Government is doing some interesting things on clinical trials. But aren’t all other countries that are trying the same trick pouring money into their science base rather than removing it?
Big Pharma, and Big Armour are our two remaining world class manufacturing sectors. There are some very Big Questions unanswered about them. The CBI’s new boss has made a welcome contribution.
There are 12 comments on this post
The Pfizer decision is having a massive impact on East Kent. There are few if any jobs for many of the people who work in the Sandwich plant & so far the response has been fine words – which as we all know butter no parsnips.
‘Today’s appearance by Pfizer executives at the Health Select Committee…’ – N.B., it was the Science and Technology Committee, not Health.
Faisal,
Interesting, don’t you think, that the people who talk about “democracy” in other countries are all too willing to abandon it to the diktat of unelected transnational businesses.
The south east of England is about to discover what the rest of the nation knew over a generation ago – that capitalism uses you up and spits you out to suit its own profiteering. Under capitalism, there really is no such thing as society.
This kind of thing won’t stop until we are completely rid of the evil creed. It’s as straightforward as that.
I worked in big Pharma for 17 years- at country and above country executive levels- and have now been a strategic consultant to the industry for the last decade- both here in the UK and across the globe.
This is an issue that will not go away- I have been privy to discussions at 7 other major players- ALL looking to reduce their investment levels in the UK and to reduce their exposure in what is now seen as an unfriendly business environment- both from a ‘cost of business’ perspective and a local health care environment- and it is not just R&D jobs we are talking about here, but across the commercial space as well.
Bottom line: unless the local environment changes significantly and fast, we will see migration of skills, technology and investment away from the UK in staggering quantities.
As a lead indicator- just look at where Pharma has spent their investment dollars in the last 5 years- and look what share of that has come to the UK…
Let them go, we don’t need this high tech madness that delivers little useful medicine. I’m not saying it delivers nothing, but while it focuses on saleable symptom relief without much care for side effects, I’d be glad to see the back of it. It should focus on real solutions to disease and settle for lower profit margins, or public research should take over. We have many old drugs and un-patentable chemistry to explore and this existing model ignores these things completely. Pharma, change your model and start trying to heal rather than fool people by hiding dieseases under symptom relievers. It’s less profitable but long term, it will earn you a good living.
A Barnett: clearly you have no knowledge of the Pharma industry of the process of developing new medicines. Medicines are complex products that take 15 years to be used in patietns, undergoing years of safety testing to ensure side effects are kept to a minimum and efficacy is the best it can be. If you want to rely on decades old meds, then pray you don’t get high blood pressure and get a stroke, AIDS and die rather than live or cancer and survive rather than die. Symtome relievers as you term them tend to only be for over the counter because you don’t wnat to see a doctor or for end of life where the illness is already so advances that is all that can be done to make someone comfotable before they die – or would you rather they suffered.
Dan, I have secondary progressive Ms so I know plenty about drugs and the pharmaceutical industry and about research being M.Sc myself.
Most drugs for MS are symptom relievers because they do not tackle the disease itself. They are also dangerous. Many are cytokines or do things that kill or disrupt the immune system leading to fierce side effects.
I know of a cheap safe drug that helps me but being cheap, it is ignored for trials and general use but I do use it via private prescription and it has helped me more than the expensive pharma drugs did for the 4 years I tried them.
Actually, biochemistry is not that hard for someone like me, and it’s not that complex for my mind either, but I am lucky enough to know enough to handle my own disease. This is what I mean by my comments, ie cheap drugs are ignored for trials! I use a drug, which is a drug that find new uses after the patent expired. If pharma did trial and prove, it would not make huge profits with it because it is very cheap and out of patent. These people stand in the way of progress when they don’t like it and that does nothing for my health when all they offer as an alternative is highly risky
A Barnett: I agree with everything Dan has expressed so well- your ignorance of the sector is evident, as is your flagrant disregard for the potential effect on an already troubled UK economy. If further thousands of gainfully employed, highly educated and valuable people either lose their jobs or become economic migrants, the effect on the economy would be massive, as would the effect on the investment landscape. Defensive myopia is no way to confront the issue!
Martin, you obviously believe in the house of cards. Peoples sickness is a poor way to get rich.
I’m not actually against pharma and research, but I am against pharma ignoring low cost options under their noses.
A strong economy has to be built on solid foundations and not on sowing avoidable misery in the name of healthcare, which happens too often right now.
I am far from ignorant of this sector, but you need to have a serious disease to understand my point I fear.
The only people defending big pharma here are those with vested interest. Same follows generally, viz. pharma lobby muppet John Cridland, CBI Director (back pharma, back the banks, break up employment tribunal laws).
Is it right that the banks award themselves massive bonuses after the daylight robbery of 2008? That Tesco, Sainsbury’s pay almost zero tax, having lobbied and loopholed and offshored? Is that sustainable, responsible business? Is it fair? Is it any surprise? Open stuff up to global market – bottom line is God – and surprise, surprise, kids in China can sew clothes and pharma can push powder into capsules cheaper than they can get away with here.
Here’s the truth: brute capitalism is history. Like cigarettes – a bad habit to be kicked. What will it take for Cridland and others with snouts in trough to understand the crushingly evident sense of [Philip Edwards]:
“..Capitalism uses you up and spits you out to suit its own profiteering.”
The wheels are off the bandwagon, John, have a look, if you can see past your £310k salary.
Pharma pricing self regulates- the same tired arguments were being made against the sector 20 years ago for heart disease, diabetes and asthma and the costs of treating those diseases- which are for the most part now significantly better managed and the drugs used are the cheap generics of the ‘over priced’ drugs used back then.
Now the frontiers have moved to oncology, dementia and the like- and any advances made will be generics in a decade- what then? the Pharmcos will be investing in the next wave of challenges- and rightly so- it is the only way we make advances.
I fear if we follow the rantings of NZM 13 (nice name) we will lose tens of thousands of jobs and the associated knock ons- suppliers, university departments etc-
You may not like the sector- but you would, in all likelihood have a smaller family circle to love if it did not exist.
Oh, and A. Barnett- I too have suffered a life- threatening disease- so don’t presume please. I just don’t think personal experiences should get in the way a balanced view.
Martin, I presume nothing. I was pointing out that I know about the drug industry from first hand insight and quoting my source of knowledge, which scientists like myself are apt to do.
The pharmaceutrical industry doeas a good job with high tech and no job with old drugs that find new uses and unpatentable drugs or substances. We supposedly have public bodies that pick up the balance but we know that these bodies have been coopted to do unprofitable research for the drug industry in large part so the drug industry can cherry pick.
This means that much possible good medicine is ignored and lways will be, so do understand that when we sick people needs someone to pay attention to something so we can help ourselves, we get very annoyed when no ‘caring’ researcher wants to help us.