Competitiveness And The UK Pharma Industry

In the 1990s, UK drug industry output has grown by about 6% per annum in real terms, and now comprises almost 1% of UK Gross Domestic Product. While this performance is impressive, it does not adequately describe the competitive advantage held by the industry, says a new report from the Association of the British Pharmaceutical Industry.

The industry's trade surplus has climbed steadily to almost $1.70 billion ($2.60 billion) in 1994, boosted by exports; the UK is the world's fourth largest drug exporter, with 12% of the total. It produces about 2% of UK manufacturing output by value and 4% of value added, and accounts for over 80% of the home market. Its output growth during 1982-92 was 92%, over four times that of manufacturing as a whole, and at 6% of the total it is the world's fifth largest medicines producer. It is also the world's fifth largest investor in pharmaceutical R&D, at 8% of the total, and it obtained 34% of patent priorities for the 50 top-selling products in 1992.

Govt "Now Taking Its Role Seriously" "These facets of the industry show it to be disproportionately successful compared with the size of domestic consumption (only 3% of the global market) and act as surrogate measures of the competitiveness of the UK as a site for research and production," says the ABPI report. It examines the determinants of competitive advantage and their importance to the industry, plus factor and demand conditions, and concludes that the industry's competitiveness has been stimulated by: