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December 07, 2011

Cameron's new UK life sciences strategy – enough to stem the tide?

The life sciences initiative the Prime Minister launched on Monday is welcome, but won't be enough even to repair the damage done in the latest pharmaceutical job cuts, say Michael Hopkins and Paul Nightingale of the Science Policy Research Unit.

On Monday Prime Minister David Cameron outlined to an audience of pharmaceutical executives a new strategy to create a re-energised and more integrated life sciences sector. The immediate co-ordinated response from industry and research charities has been resoundingly positive, but this is hardly surprising from the insiders. A raft of measures promising to make the UK the ‘go-to’ destination for drug developers are on offer and if implemented would address many of big pharma’s demands.

The measures are set out in a strategy document, ‘Strategy for UK Life Sciences’, launched by the Department for Business Innovation and Skills. It suggests that early drug discovery has become so overwhelmingly risky and expensive that it should be out-sourced wherever possible and, if private investors are not forthcoming, then public money should be used. To maintain early-stage financing new measures have been introduced. These include a £180 million Biomedical Catalyst Fund to finance clinical trials that help to establish proof of concept of new treatments, as well as an additional £130m for the Technology Strategy Board’s stratified medicines initiative. Most of this money is intended to help shift what is perceived as a growing backlog of commercialisable projects that are stuck in academia, or large pharmaceutical firms, across the ‘valley of death’ in the development cycle where high risks put investors off.

Other key initiatives among several dozen in total include a planned consultation on ‘early access’ for UK patients to experimental therapies before their regulatory approval, and promises to cut red tape surrounding clinical trials. Technical infrastructure for informatics, new modes for sharing large volumes of increasingly complex patient data, and major new facilities are promised. Most controversially, particularly with patient representatives, have been the proposals to introduce a presumed-consent provision for NHS patients to contribute parts of their patient records to industry undertaking clinical research in the UK, subject to individual’s right to opt out.

Collectively these are supply-side measures to push science into the clinic. Another whole report—‘Innovation Health and Wealth’, produced by the NHS Executive and also launched alongside the Prime Minister’s speech—focuses on building NHS demand. Six areas are highlighted to improve the uptake of novel treatments in the NHS. These include an emphasis on ensuring compliance with National Institute for Health and Clinical Excellence (Nice) guidelines; reducing local variations in patient access to treatments; better access to information to raise awareness among doctors and patients of new clinical options; and more incentives, training and leadership to encourage innovation. Specific ‘high-impact’ innovations are also promoted to improve three million lives in five years.

The breadth of these measures is welcome as the strategy comes at the end of a year of bad news: massive job cuts across the country by large pharmaceutical firms, traditionally among the UK’s largest industrial employers of R&D scientists, and continued difficulties for smaller but more numerous small and medium-sized enterprises which have been struggling to attract funding. Yet despite all the upbeat messages about the UK, we have yet to confront reality. These measures are unlikely to even restore the diminished size of the science base to the level that existed prior to the latest round of pharmaceutical job cuts.

Furthermore the focus on big pharma, who dominated the external advisory panel, compared to smaller firms is a concern. There are a number of measures to promote early funding of new start-ups, such as more tax relief for private investors. However, the government’s vision sells small firms short—gone is any ambition to build new UK companies that have global market reach and sustainable incomes, as was the hope less than a decade ago. Given the proven mobility of large Pharma’s R&D, which goes west to the well-funded US science system and east to the lower costs of Asia, nurturing future domestic successes would probably be wise.

To build small life science firms that can survive the valley of death, and grow to sustainable size, as Shire and BTG have done in the past, requires bringing investors back to life sciences. But this is not the easy option. The biggest pool of money—from institutional and retail investors who used to invest hundreds of millions annually in the sector through stock markets—is currently ignored in the strategy. Finding a way to make life sciences attractive to mainstream investors would be a truly visionary strategy. But until this is attempted, with returns to innovation for investors as the incentive, even this large and multi-faceted new strategy will do little to stem the tide.

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Comments

Although the R&D relief has been in place for over 10 years, some companies which perform R&D are still not claiming all the relief they are entitled to. In most cases this is because the definition of R&D which HMRC uses is much wider than that the average person on the street would apply. Broadly, if the company is overcoming technological challenges to create a new product or process, or to appreciably improve them, then it is likely that R&D activities are being undertaken.

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