Pharmaceuticals: The UK’s Role in the Global Industry

Pharmaceutical companies are making a significant contribution to the UK economy, higher than most other high-tech industries. Whether, the positive impact is measured through the balance of trade, the productivity of its employees or the improvement in the overall state of the nation’s health, this industry plays a vital role, in the UK and the world.

The UK is ranked in the group of countries with substantial positive trade balances, with the pharmaceutical sector consistently, over the last decade, generating a large trade surplus for the UK of £1.1 billion per annum, according to the latest figures released in 2015 by HM Revenue and Customs. This is greater than any other industrial sector in the UK.

There are around 73,000 people employed directly in the UK-based pharmaceutical industry, of which 23,000 work in research and development. The latest figures released by the Office for National Statistics show that the Gross Value Added (GVA) generated per employee within the industry, is approximately £128,000, which is significantly higher than other comparable manufacturing sectors.

There are a number of reasons for the industry’s commanding position within the UK, including the strong intellectual heritage in pharmaceuticals and bioscience, the Pharmaceutical Price Regulation Scheme agreed between the government and the industry to ensure the NHS has access to good quality branded medicines at reasonable prices and the highly skilled workforce.

This development of medicines and vaccines has a direct impact on people’s health. For example, the life expectancy in the UK has increased from just 44.1 years for a boy and 47.8 years for a girl born between 1891 and 1900 compared to that of a boy born in the UK today who has a life expectancy of 78.9 years and a girl 82.7 years. This is due, in part, to the substantial investment in R&D in the pharmaceutical industry, more than any other industrial sector in the UK, up to approximately £11.2 million every day.

The UK’s position in the global pharmaceutical industry has recently been challenged by competition from emerging economies, such as China, Brazil and India. From 2003 to 2007 the UK ranked as the fifth or sixth nation in the global pharmaceutical market but fell to eighth position in 2013. China occupies a strong third position behind the USA and Japan but does not rank in the top eight countries for market share for products launched in the five years prior to 2013. The UK ranked eighth in this category with a 7.8% share, again demonstrating its strength in R&D. The USA ranked first with 12.2% and Japan second with 16.7% according to IMS Health World Review Analyst 2014. The UK’s success in developing medicines for market is translated into sales, with a 14% share of the top 100 medicines by global sales.

 

Although the UK’s position has slipped slightly in the global pharmaceutical market, due to increased competition from emerging economies, most notably China, the strong position of its R&D has kept it in the top rankings overall. The pharmaceutical industry plays a vital role in the UK economy and is an important player in the global industry as a whole. 

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