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Supporting the expansion of pharmaceutical industry in the UK is crucial for its growth and prosperity, asserts Alex Brummer.

British prosperity requires a genuine understanding and attention to the genuine factors fueling it, as argued by Chancellor Rachel Reeves and the government.

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Reevaluate the genuine factors propelling British affluence; it's high time Chancellor Rachel...
Reevaluate the genuine factors propelling British affluence; it's high time Chancellor Rachel Reeves and the administration faced reality.

Supporting the expansion of pharmaceutical industry in the UK is crucial for its growth and prosperity, asserts Alex Brummer.

Rachel Reeves's thinking is stuck in the past, rooted in old-school Labour ideologies. The Chancellor is wise to focus on planning reforms, as they can expedite new infrastructure and more housing, which promotes growth.

Her unrealistic expectation that she can persuade the Office for Budget Responsibility that these changes will sufficiently increase output to meet her self-imposed fiscal rules is a pipe dream.

Reeves and the government need to face reality about the real drivers of British prosperity.

Britain's strongest asset lies in its intellectual property in the fields of biosciences, technology, and artificial intelligence (AI). These areas should receive the most attention.

With GSK and AstraZeneca, the UK boasts world leaders in vaccines and oncology, respectively, within the FTSE 100. Maintaining this cutting edge and keeping these companies in the UK isn't guaranteed.

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It's disappointing that there's no long-term British investor among AZ's top 10 shareholders. With pension reforms aside, this lack of investment is concerning.

A quick glimpse at life sciences reveals that prosperity can shift rapidly. The ousting of Novo Nordisk boss Lars Fruergaard Jorgensen illustrates this, as competition developed for the Danish group's obesity treatments Wegovy and Ozempic.

This past week has been turbulent for the pharmaceutical industry, with Donald Trump questioning drug pricing in the US.

Keir Starmer is so obsessed with keeping on Donald Trump's good side that he's made deals on sunset industries instead of focusing on sunrise activities like life sciences.

Given the potential for a price freeze in the U.S., where both AZ and GSK make most of their money, this is a clear and present danger, causing share price fluctuations.

A sluggish political process works in pharmaceuticals' favor. A significant portion of excess margin in the American healthcare system is created by middlemen, large pharmacy chains like CVS and Walgreen, and competing medical clinics.

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AstraZeneca bets its future on US growth

The Americans excel at deploying new compounds more quickly, delivering improved outcomes for oncology and other diseases.

This comes with higher prices. New patented drugs are expensive. Outcomes are better than with older, cheaper generics prescribed in Britain.

Lowering drug prices by 30 to 80% in the U.S. requires new legislation. The pharmaceutical industry's influence on Capitol Hill means progress is slow and steady.

Britain doesn't help itself. AZ has an impressive pipeline and is accelerating R&D spend, which increased by 16% in the first quarter.

Since leaving the sclerotic European Drugs Agency post-Brexit, the Medicines and Healthcare products Regulatory Agency has done a satisfactory job in speeding approvals.

British public medicine is starved of innovation due to the blockages created by clinical-price regulator NICE.

Having gained independence a decade ago, AstraZeneca established a £1.2 billion research center in Cambridge, within walking distance of Addenbrookes hospital and a sprint from college labs.

The failure to back a world-class vaccine facility in Britain led AZ Chief Executive Pascal Soriot to invest elsewhere.

His firm is building a £2 billion-plus research facility at the other Cambridge in the Boston area. The facility, driven by artificial intelligence, has flourished since Covid and is a speedy innovator in the pharmaceutical research field.

Unfreezing planning in the UK may offer some help. However, without a government that understands the contribution of life sciences to the UK, Britain runs the risk of becoming a backwater in a sector where it excels.

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  1. The lack of long-term British investment in companies like AstraZeneca and GSK is concerning, especially considering their leading positions in the FTSE 100 and the world in their respective fields.
  2. Britain's intellectual property in biosciences, technology, and artificial intelligence (AI) should receive priority, as these areas have the potential to drive future growth and prosperity.
  3. Instead of focusing on sunset industries, Keir Starmer should direct his attention to sunrise activities such as life sciences, which have demonstrated rapid shifts in prosperity, as seen in the pharmaceutical industry.

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