What’s holding back growth in UK life sciences?

This week in our series of blogs during the run up to the election we look at the barriers to growth that hold back companies in the health and life sciences sector. These significant factors make it harder for companies to operate in the UK and importantly, attract investment.

With a new government soon to be elected, this is an opportunity to engage and guide the future government to remove the barriers to growth that hold companies back. Labour set out its strategy for the life science sector in A Prescription for Growth which not only identifies its key priorities, but it is also a clear invitation for business to collaborate and provide ideas to government to make the sector thrive. In the Conservative Manifesto, the Conservatives also reaffirm their commitment to the sector highlighting life sciences as central to a future industrial strategy and pushing forward their funding for advanced manufacturing.

Protect the NHS? Surely it’s time to make it a world leader

Both main parties have identified NHS and the UK population as an incredible resource with a diverse population that could be harnessed in drug and technology development, as it was during the pandemic. But repeatedly, inertia holds the NHS back. UK companies have developed countless treatments and technologies that have been met by a brick wall when selling into the NHS, meaning they often do not even try and focus on foreign markets. The NHS does not want to move from the status quo of legacy products and technology but also shortsightedly, costs are assessed on a short term rather than long term value basis. In the Labour Manifesto, they plan to tackle this head on by “developing an NHS innovation and adoption strategy in England. This will include a plan for procurement, giving a clearer route to get products into the NHS coupled with reformed incentive structures to drive innovation and faster regulatory approval for new technology and medicines.” The NHS and the health and life sciences community should absolutely be incentivised to work together. They should share skills and knowledge and transform the ambition of the NHS from only just delivering services to one of innovation that transforms the patient experience and improves the standards of care.

Speaking with the industry there are also ideas to incentivise the NHS to use UK innovation. Under the Mansion House Reforms it is proposed that 5% of investments should go to UK companies from Defined Contribution pension schemes; could the NHS be encouraged to purchase 5% of its new products and treatments from UK innovation where possible? A specific scale up fund to support UK companies to commercialise products and attract commercial experts in the UK has also been suggested. This would not only help to grow the market and foster innovation, but it would also lead to a domestic market for UK companies which would result in them staying here for longer.

Build it and they will come

Building sufficient lab space and manufacturing facilities to support clinical trials and technology development is critical. Today, supply issues in the UK already exist and this will be further exacerbated if, as expected, demand continues to grow. To rectify this, there will not only be a need for public and private funds but also planning reform to make building facilities easier. The Conservatives have focused their planning reform efforts on housing during the last government. In contrast, Labour has set ambitious targets in its Manifesto to transform planning and stimulate business growth by making immediate changes to the National Planning Policy Framework (NPPF) that should make it easier to build labs. For the life science sector, its vital that this development should not only be confined to the ‘Golden Triangle’. Creating new science parks and clusters of companies will also accelerate regional development in the form of homes, retail, transport and infrastructure links. Labour also outlines plans to expand devolution and this will present opportunities to create new clusters. In Greater Manchester, there has been a precedent for this as regional planning powers were used to allocate land and sites for life sciences.

Coping with the expected demand for clinical trials

After an extended period of poor performance, the MHRA is now speeding up approvals for clinical trials however we are still aware of companies considering taking their studies to other countries due to prior delays. Despite the MHRA’s upward curve, the organisation has been made smaller. It should be expanded to keep up with expected increased domestic demand and also to attract global pharma and biotech companies to conduct their studies here. The Conservatives do address this directly in their manifesto by saying they would facilitate, “agile regulation, supported by a well-equipped MHRA. We will support research into new treatments, including for Parkinson’s and motor neurone disease and secure more commercial clinical trials.” Speaking to many across the industry this is a massive roadblock to advancing treatments and technology in the UK and if it’s not resolved soon, it will continue to make the country less attractive to work in.

People, people and more people

There are now shortages of younger skilled workers in the UK and companies are unable to attract more affordable talent from Europe due to changes in regulations. In addition, they are unable to attract senior leaders due to uncompetitive pay, compared to the US, and relocation bureaucracy. At this point, there is no political appetite to reverse Brexit, but where there are clear barriers that are making the UK less competitive, there must be solutions. It’s not just about attracting people here but retaining them. Some of the UK’s successful leaders have moved abroad due to better compensation and the ability to conduct more and broader research with larger pools of capital outside of the UK. If this is a key sector for UK growth, the sector needs the brightest minds, both from here and further afield.

Breaking down barriers

Harnessing the power of the NHS and challenges around lab space, talent retention, clinical trials and scaling businesses, are only a handful of barriers that companies face when looking to grow businesses in the UK. These serve as barriers to investment.

With proactive engagement to highlight these challenges to what should be a receptive government, it will be possible to resolve these day-to-day challenges which will help to derisk company investment propositions.