Foreign investment in UK drugmaking down; ABPI tasks ex-GSK exec with reversing trend

By Gareth Macdonald

- Last updated on GMT

FDI investment in manufacturing plants in the UK falling
FDI investment in manufacturing plants in the UK falling

Related tags International trade Astrazeneca

An ex-GSK staffer charged with winning manufacturing investments for the UK says fostering innovation and “fiscal attractiveness” are vital.

In 2012, the UK pharmaceutical industry generated a trade surplus – the amount by which the value of exports exceeds imports - of £4.9bn ($7.6bn) which, according to the Association of the British Pharmaceutical industry (ABPI), reflects the strength of the country’s drug manufacturing sector.

But, while the sales look good now, whether the UK keeps its status as a drug production hub is an open question as – aside from investments by home grown firms GSK​ and AstraZeneca​ – foreign spending on manufacturing capacity in the UK has slowed in recent years.

According to data extracted from the Organisation for Economic Co-operation and Development (OECD)​ direct investments in UK manufacturing from drugmakers headquartered elsewhere fell from $1.5bn in 2009 to just over $1bn in 2011.

This downward trend contrasts with countries like Spain, France, Ireland, Belgium, Denmark and the Netherlands, which have all seen investment in manufacturing facilities by overseas drugmakers increase over the period.

While the OECD statistics are not comprehensive – figures are only available up to 2011 – they do suggest that in recent years the UK has started to become a less attractive country in which to make drugs.

(data extracted from OECD FDI database - http://stats.oecd.org/Index.aspx?DatasetCode=FDI_POSITION_INDUSTRY​)

Industry efforts

The ABPI voiced similar concerns in September when it launched the Medicines Manufacturing Industry Partnership (MMIP) in collaboration with BioIndustry Association (BIA), with the aim of boosting manufacturing innovation and attract more investment.

At the time Ian McCubbin, GSK’s senior VP for North America who appointed leader of the MMIP project, said: “The UK has a strong foundation in manufacturing and it is vital that this partnership works to differentiate, defend and grow the existing industry base​.”

These efforts intensified this week when the ABPI hired James Christie, another ex GSK staffer, as director of manufacturing projects, charging him with creating an attractive and innovation-driven environment to ensure UK competitiveness in medicines manufacturing.

The ABPI told us Christie’s role is to “undertake a number of key work-streams for the sector in technology and innovation, fiscal environment, regulatory environment, skills promotion of UK and the will support in the preparation of business cases for strategic UK plc​.”

Christie said the plan is to foster manufacturing innovation in the UK, explaining that “innovation in supply chain the UK will lead in this area and become the global hub for innovation and patient empowerment and thus attracting inward investment.

It is the connected ecosystem of, innovation, talent, speed, compliance and fiscal attractiveness that will allow the UK to be a competitive location to invest in Medicines manufacturing​.” 

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