As a recognised “powerhouse” in early scientific endeavour, with world-leading institutions such as the NHS, the Medicines and Healthcare Products Regulatory Agency and National Institute for Health and Care Excellence, the UK has a long and rich heritage of impact and leadership within global life sciences. At no time in recent history was this more important and more evident than during the Covid-19 pandemic, when industry, along with our partners at these institutions, worked together to develop and introduce vaccines and drugs in record time.
I am incredibly proud of the role both MSD and the biopharmaceutical industry more widely has played in enabling society and the economy to function once again. The Life Sciences Vision, published in July 2021, builds on this partnership, and has set out the government and the life science sector’s bold ten-year ambition to create a thriving sector, and tackle the major causes of death and disease.
The UK, however, faces continued challenges from the pandemic and wider economic and political difficulties. Rising inflation coupled with slowing growth in the UK and globally make for a challenging economic outlook for the foreseeable future.
Unsurprisingly, political leaders are looking to promote areas of the economy that can help support productivity, growth and investment. The life sciences industry is one of those areas. We already invest more than any other sector in UK research and development, and there is huge opportunity for further growth if we can unlock its full potential. Moreover, investment in health and economic growth go hand in hand, as investing in the population’s health serves to reduce long-term sickness and supports productivity and workforce participation. Recent analysis commissioned by the NHS Confederation has shown that for each £1 spent per head on the NHS, there is a corresponding return on investment of £4 – showing an economic benefit to investing in the National Health Service.
But the reality is the UK is competing with countries across the globe that also believe they are the best place to discover, develop and access new medicines and vaccines early. Global boardrooms such as MSD’s must consider multiple factors when deciding where we should place our strategic investments and the UK must remain competitive as other countries continue to pursue policies aimed at attracting more investment from life sciences companies.
In France, President Macron has pursued an industrial policy that places life sciences at the centre of its investment agenda, as one of the seven priority sectors covered in the annual Choose France Summit. This, along with other sector-specific measures including early access reform and simplified clinical trial procedures, have helped to make France an attractive place to do business and earlier this year MSD announced €500m in investments over the next three years. These investments will be divided equally between clinical trials and production and follow other recent investment announcements from global pharma in France, serving to illustrate both the size of the prize and the competition out there to attract such investment.
One area in which the UK must do more to be competitive is the commercial operating environment and specifically the Voluntary Pricing and Access Scheme (VPAS), a five-year scheme negotiated between industry and the government that underpins the pricing, access and uptake arrangements of branded medicines in the UK.
As a result of the impact of the Covid-19 pandemic the current scheme is proving to be financially unsustainable and risks undermining investment in the UK life sciences sector. Under the current scheme industry is set to pay back 15 per cent of revenue in 2022 and is projected to pay over 30 per cent of its revenue back to the government in 2023 – which puts it way out of kilter with other, comparable countries. Current payment rates include, for example, 7 per cent in Germany, 7.5 per cent in Spain and 7.75 per cent in Ireland. Such a discrepancy is a risk to the UK’s ambition to be a world leader in life sciences and undermines international competitiveness.
The Life Sciences Vision states that the UK aspires to be “the world leader” for the uptake of new and innovative treatments and technologies. This is simply not possible without investment. However, the UK spends less on medicines than other developed economies, with 9 per cent of its healthcare budget going to medicines compared to an average of 14-18 per cent across most developed countries. Too many patients are missing out on the best standard of care, a situation which leads to worse patient outcomes and damages the UK’s overall attractiveness as a place to host late-phase clinical trials if the right standard of care is not in place.
Unfortunately, this is being reflected in the data on patient access to clinical trials. Patient recruitment to industry clinical trials on the National Institute for Health and Care Research Clinical Research Network has fallen by 44 per cent in 2017-18 to 2021-22 and the UK’s global ranking for Phase III industry trials has now fallen from fourth in the world in 2017 to tenth in 2021. Addressing this is essential to delivering better, more equitable health for British patients and populations, a mission we are committed to at MSD.
The British government and industry have an opportunity with the next scheme to achieve a sustainable long-term settlement between industry, government and the NHS that enables the ambition of the Life Sciences Vision, delivering world-class patient outcomes, NHS financial sustainability, and a sustainable industry that can continue to invest in tomorrow’s medicines and vaccines.
Ensuring the right operating environment that rewards innovation and supports access to medicines for patients will allow the UK to fully realise the potential of the life sciences industry to support growth in the economy, as well as maximising the health and well-being of the population. As a leading life sciences investor, we’re committed at MSD to working with the government to realise the combined strategic potential of the VPAS and the Life Sciences Vision.
MSD has provided funding support for this activity.