Pharmaceutical Research and Development Spending

Baroness Walmsley Excerpts

Thursday 13th October 2022 Grand Committee

[Baroness Walmsley (LD)]

My Lords, I thank the noble Baroness, Lady Wheeler, for introducing this important debate so comprehensively. There is no doubt that the R&D and manufacture of new medicines already contribute in a major way to our economy, but it is also clear that there is considerable potential for improving that contribution in the interests of patients, the levelling-up agenda and the economy. However, as the noble Baroness said, over the past 25 years there has been a manufacturing capacity reduction of 25%, while other countries, such as Ireland, have seen an increase. We also saw how India produced a lot of our vaccines during the Covid pandemic.

Pharmaceutical companies can choose where they make their medicines, since they sell them all over the world, so what are the factors that they consider when deciding where to invest their capital and create well-paid jobs? Access to skills is important, as is the supply chain infrastructure, the regulatory environment, the attractiveness of the fiscal environment and upfront capital grants. Importantly, at this time of economic crisis, I should mention the importance of stability. In the past, companies have chosen the UK on that factor alone, even when other factors might have been better elsewhere.

There are many things we can do to make us more competitive. Ensuring that local communities have the right skills to attract these companies is vital and, at this time of pressure on public spending, the last thing we need to see is a cut in further and higher education opportunities, particularly in the poorer demographic areas.

As far as capital grants are concerned, the life sciences innovative manufacturing fund, £60 million over three years, is a small step in the right direction compared with our international competitors. This fund is vastly oversubscribed but could contribute to the Government’s growth ambitions. Are there any plans to increase it? The returns in increased profits, wages and taxes would surely pay for it in a few years. We must also encourage companies to increase their own capital investment in manufacturing capacity here. If capital expenditure were to be recognised within the R&D tax credit system, it would encourage them to invest more of their own money in the UK.

We need to get this right in the interests of patients, since UK manufacture of clinical trial medicines, for example, would get innovative medicines to patients quicker. It is really important that we do everything possible to speed up the time it takes to get new medicines to patients, because we are not doing very well at the moment. UK patients have lower access to innovative medicines than those in other countries, as my noble friend Lady Brinton said. For example, 43% of positive recommendations made by NICE between 2015 and 2019 were for a narrower population of patients than other regulators. Even when medicines are cleared by NICE, five years after they are approved for the NHS they are reaching only 64% of the patients reached by other nations. This could be because we spend less on medicines than other countries—9% of the healthcare budget, the lowest in the G7, compared with the average of 14% to 18%.

I now turn to clinical trials, which are so important to getting cutting-edge medicines to patients. In the last four years the UK has slipped down the international rankings for the number of clinical trials and the number of patients taking part, despite the Government’s declared ambition to make us a go-to country. The number of patients involved has almost halved during that period. This represents a cost to the NHS of around £447 million in the last financial year alone. Given that we heard from NHSE’s chief financial officer than the NHS is now short of £20 billion per year simply due to inflation in the cost of goods and services unless it can make serious cuts, surely the opportunity to save money by hosting more clinical trials is almost irresistible.

However, one of the problems is capacity. We have lost thousands of beds over recent years, as recognised by the Government recently in their announcement of 7,000 new ones. We have lost thousands of staff and are not training enough to take their place. Without adequate numbers of health professionals, we will not be able to host these beneficial clinical trials. That is why your Lordships focused so hard on the need for effective workforce planning during the passage of the Health and Care Act 2022.

The effect of this on patients is central to why we must improve their access to potentially life-saving treatments—but it is actually diminishing, partly because the setting-up time of trials is so slow. This also discourages companies, of course, despite the attractiveness of the NHS with its enormous cohort of patients. Relevant to the levelling-up agenda is the discrepancy between patients’ access to clinical trials in different parts of the UK. Cancer Research UK found that cancer patients in west London were 71% more likely to have opportunities to take part in research than patients in Cheshire and Merseyside.

I share the concern of the noble Lord, Lord Goodlad, about Alzheimer’s and dementia research. There is huge potential here for the UK to become a global leader—but again we are lagging behind. Over the past five years we have seen a decline in the number of dementia clinical trials taking place in the UK, and the number of participants. Since 2020, the number of phase 3 trials has increased in Germany, France and Italy but fallen here. So can I ask the Minister whether the Government are still committed to the £160 million of funding promised in their manifesto and recommitted to in August this year? Will the Government adhere to the recently announced national dementia mission? I ask because they have dropped so many other very important health-related measures which had been agreed by Parliament. I refer to the mental health Bill, the anti-smoking strategy following the Khan review, the health disparities White Paper and all the anti-obesity measures in the Health and Care Act—which we appear to have wasted our time on.

Looking forward, there are several other areas of research that show great promise and in which we have an opportunity to lead the world. My noble friend has talked about advanced gene and cell therapies. Those should be made and trialled here to make the most of the economic opportunities as well as the benefits for patients.