The UK government has announced new economic data from 2021 to 2022, which reveals the risk of disincentivising the growth of the UK life sciences sector.
The Bioscience and health technology sector statistics 2021 to 2022 report showed a positive year-on-year increase in the number of businesses (6,850), sites (7,910), employment (304,200 people) and turnover across the UK life sciences industry (£108.1bn), as well as the biopharmaceutical sector.
However, the latest data does not capture the period of high and internationally uncompetitive medicine rebates in the UK, which rose from 5.1% in 2021 to 26.5% in 2023 under the Voluntary Scheme.
While the new Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) will see rates beginning at 19.5%, the government plans to impose a 21.9% rebate rate in the Statutory Scheme next year.
The new Statutory Scheme has been described as ‘unworkable’ and potentially ‘highly damaging’ to UK life sciences and NHS patient access to medicines by over 20 leaders in the pharmaceutical industry, who warned that high and uncompetitive rates are already and will continue to impact UK investment and headcount until rebate rates begin to decline.
Richard Torbett, chief executive of the ABPI, said: “It is great to see that UK life sciences continued to provide new high-quality jobs and strong economic growth to the UK… and we continue to believe our sector has untapped potential to do more for the UK.
“This data speaks to the high potential of a science- and innovation-led economy to create jobs and growth. This is why we have been so concerned about the impact of high rebate rates in recent years, as it puts at risk the UK’s record of science-driven growth.”
Most recently, the Department of Health and Social Care published new terms for the UK medicines scheme, which revealed that other countries with similar operating mechanisms have a significantly lower statutory rate than the UK, including Germany (12%), Spain (7.5%) and Ireland (8.25%).