Political Mood Change over the NHS, Innovation and the Pharmaceutical Industry in 2011

As 2011 draws to a close now is a good time to reflect on the period since the last UK General Election in 2010. We must consider what we have done right, what we have done wrong and what remains to be done.

Back in February 2010 I was asked to pen a few words About Barbara for 2020health. I have resisted temptations to change this summary. My theme has remained that I would like to see collaborations between industry, the NHS and academia strengthened in order for more benefit to be obtained from the scientific excellence within the UK. The current Government has in my view been the first in recent decades to make major political progress towards this goal.  The economic climate has made it difficult to be generous with public funds. The Health and Social Care Bill has not been handled perfectly. However, the main objectives have been right and have not been derailed. The Government has shown a willingness to listen and a level of understanding that has not been seen since the foundation of the NHS. Of course, medical professionals should have been consulted earlier. Yes, the Prime Minister should have been more visibly involved from the beginning. True, there are still pitfalls ahead to be avoided.  Indeed much work remains to be done and the way forward is not an easy one. Certainly it would help if more MPs had scientific backgrounds.

Since the General Election in 2010 the Government has been recognising at the most senior level the importance of innovation, science, the pharmaceutical industry and cooperation with academia and the NHS.

An article co-authored by George Osborne and Eric Schmidt (Chairman and CEO of Google) in November 2010 commented:

Innovation drives the modern world. It determines the success of companies, and in this century it will also determine the success of countries. For decades, we’ve been familiar with the concepts of trade and budget deficits. But today, developed economies also need to worry about the innovation deficit.”

The following quotes are taken from a speech by David Cameron earlier this month (5th December 2011):

  • “Now, this government has set a clear goal to rebalance our economy: yes, that means less borrowing and less debt, but as important it means more investment, more exports, more designing things, making new products and selling them to the rest of the world.  Innovation is the beating heart of this vision, and in this we are fortunate because Britain has something of a genius for it.”
  • “But I believe that in place of the old ‘big pharma’ model, a new model is emerging.  It’s about more collaboration, more outsourcing, more early trials.”
  • “you can call it experimental medicine; the fact is we see it, we recognise it, and we are determined to support it, to invest in innovation, to stoke early-stage investment, and to tear down the barriers to development.”
  • “We’ve still got scientists who could be joining forces but aren’t, industry and clinicians who should be working together but don’t, and we are determined to change this.  So we have made the decision, even in these difficult times, not only to protect the science budget, but we also announced an extra £495 million capital funding for science this year.  We are creating a string of new Technology and Innovation Centres, with a high-value manufacturing centre already up and running and a cell-therapy centre to open next year.  We’re investing £800 million in Biomedical Research Centres, which are home to groundbreaking collaborations…”
  • “Now next we are pulling every lever possible to make the UK a much more attractive place in which to invest.  From April 2013 there will be the new patent box offering a 10% tax rate on patent profits.  GlaxoSmithKline and AstraZeneca have already committed to new investment as a result and over the coming months we want to see more businesses follow suit.  Add to this our corporation tax rates – on course to be the lowest in the G7 – and our generous tax credits for R&D.  And I believe if you take those things together you have a compelling case for investing in research right here in the UK.  And as you look to work more and more with smaller companies it is crucial that we do more to deal with the funding gap that so many people face – the so-called Valley of Death.  So we’ve got a whole package of measures to bridge that gap – tax relief on angel investment up from 20% to 30%.  The amount that can be invested in a single company in a year up from two million to 10 million and together these mean that if you build a business worth up to £25 million and then sell it, you’re going to be better off in the UK than you would be in the US.  Now obviously last week in the autumn statement we went even further.  The Chancellor announced a new 50% tax break for the first £100,000 invested in a start-up…”

This blog is too short to cover everything but those of you who have read my blogs for 2020health and my other campaigns since the General Election will see why I am so pleased. I had no role in scripting David Cameron’s words on 5th December but it is unusual for a politician to deliver a speech with which I agree so completely. My only disagreement is over the comment, “It could be that in just 10 or 15 years, the idea of treating disease without reference to the patient’s genetic blueprint is quite simply unthinkable.” Some diseases occur in the same way whatever a patient’s genetic blueprint and sufferers would not therefore necessarily benefit from being treated differently according to their genetic profile. Some drugs in use today are extremely effective and do not require radical improvement. In other cases (e.g. antibiotics) the genetic blueprint of the pathogen may be what matters rather than that of the patient.

For the pharmaceutical industry the main policy matter where I foresee danger is over drug pricing. The PPRS has served the UK well, although it has never been perfect. A good value-based pricing system may have academic benefits but there is no way of valuing a drug objectively because too many subjective judgements are involved. We do want to encourage innovation that leads to new medicines  fulfilling important unmet clinical needs. We also wish to support potentially valuable research skills and R&D teams for the future during the barren periods that inevitably occur from time to time. We must also remember the limitations on our ability to fix drug prices as a result of parallel importing and exporting along with other international business realities. The Government must think very carefully about the futureUK pharmaceutical pricing system, whether it is called value-based or not, because a wrong decision could undermine much of the good work that is being done to encourage pharmaceutical and biotechnology companies.

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About Barbara Arzymanow

Barbara Arzymanow is a Research Fellow at 2020health and is a founding director of an independent healthcare consultancy firm. She has been an investment analyst specialising in Pharmaceuticals for 25 years, prior to which she carried out academic medical research in university laboratories. Her experience, obtained entirely from outside the pharmaceutical industry, gives her a unique, political perspective independent of commercial lobbies. She has extensive experience in financing the biotechnology industry, which is vital for the long-term standing of medical research in the UK. She has always been inspired by the scientific excellence within the UK and would like to see collaborations between industry, the NHS and academia strengthened. For more information about Barbara's research and writings including submissions to Government Departments please visit http://www.researchideas.co.uk . Barbara also tweets as @barbararesearch .
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