Ministers push to stop pharma brain drain to US
The Industrial Strategy, which will be revealed in the coming weeks, focuses on Britain's eight key growth-driving sectors, including defence, financial services, and the £108bn life sciences industry.
Britain has 'underperformed'
A draft compiled this month says the Government will 'establish a dedicated service to support 10 to 20 high potential UK companies successfully scale, invest and remain domiciled in the UK, working closely with the Office for Investment'.
It will say the sector faces 'perennial challenges' that mean ideas in the UK are rarely scaled up for profit.
Britain is 'brilliant at discovery, poor at commercialisation and adoption', the draft document says.
Many mid-sized companies looking to grow are often forced to America to find funding, which has much deeper capital markets and the Government wants to stop Britain's high-growth companies from listing abroad.
The draft strategy warns that Britain has 'underperformed' in areas of traditional strength for several years, including clinical trials.
'The UK has an ageing population which is increasingly multi-morbid, posing fundamental challenges for the NHS,' the document says.
'The economy is stagnant, with growth, productivity, exports and inward investment well below trend for at least the last decade.'
'Toxic' issues holding UK back
While many in Labour will welcome the Government's interventionist approach, others fear the party is relying on 1970s-style industrial strategies that became synonymous with picking winners and propping up failing industries.
Plans for a 'sovereign health fund', which the Telegraph first revealed in March, are also outlined in the document.
The Government hopes the fund will help to bankroll research and aid the shift to a prevention-oriented NHS.
The British Business Bank has also been given powers to pour more cash into the sector as part of Mansion House reforms unveiled last week that will see tens of billions more pensions fund cash ploughed into private markets.
While industry bosses have praised ministerial engagement with the sector, sources warned a number of 'toxic' issues were holding Britain back.
Drug makers are pressing the Government to relax the so-called voluntary scheme for branded medicines pricing and acces – which sets a yearly cap on the total allowed sales value of branded medicines to the NHS each year.
If the NHS spends more than expected on branded medicines, drug makers are then forced to compensate the health service in the form of rebates.
The scale of these rebates has ballooned in recent years. Between 2014 and 2018, the sector paid £2.8bn in rebates. This rose to £6.3bn between 2019 and 2023. This year alone, the drug industry is expected to pay £3.4bn.
The industry is also pressing for clarity on the Government's response to Mr Trump's decision to order drugmakers to have price targets in the next 30 days, promising further action to lower prices if those companies do not make 'significant progress' towards those goals.
The UK has already pledged in its trade agreement with the US to 'endeavour to improve the overall environment for pharmaceutical companies operating in the United Kingdom'.
One industry source said: 'This life sciences strategy could be the best thing in the world – gold plated with bells and whistles.
'But if they don't address these two issues, the industry is going to shrug its shoulders and say, this won't move the dial on UK competitiveness.'
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