UK drugmaker confidence crashes

The UK's pharmaceutical industry is experiencing a sharp crisis of confidence, according to a survey of drugmakers by the Association of the British Pharmaceutical Industry and the Confederation of British Industry. Of the more than 100 firms who participated in the research, 83% expressed the view that the business environment for medicines manufacturers will get worse in the next 12 months, with only 1% optimistic for an improvement.

The depth of pessimism expressed in the survey was certainly affected by the global market situation which has been unstable in recent months. However, the CBI described the negative scores as unusually bad for the drug industry and worse than for some other areas of the UK economy. A spokesman for the ABPI told the Marketletter that "we have been a resilient industry for many years, but there is a feeling that continued pressures are having an effect." It may be excessive to imply that the UK drug industry has reached a breaking point, but firms are "frustrated" over the low take-up rate of modern medicines. According to the ABPI's own figures, the take up by the National Health Service of drugs that have been put on the UK market within the past five years has fallen to 14%, the lowest recorded level since 1998. By comparison, the US Veteran's Administration, which was criticized during debates about health care reform in the USA for adopting new drugs too slowly, approved 19% of new drugs, despite refusing as a matter of policy to adopt medicines that are less than three years old (Marketletter December 11, 2006)

Key figures from the ABPI/CBI report include: over one-third (35%) of firms anticipate cutting R&D levels in the UK, currently standing at L4.0 billion ($8.0 billion) per year; other capital investment, such as infrastructure and equipment is forecast to drop, according to nearly half (46%) of respondents; and manufacturing levels are expected to fall, 42% of the firms stated. There is virtual unanimity, 97%, of an increasing level of uncertainty for the UK pharmaceutical market.