Industrial Strategy

Lord Kakkar Excerpts

Monday 8th January 2018 Lords Chamber

[Lord Kakkar (CB)]

My Lords, I thank the Minister for the thoughtful way in which he introduced the debate and Her Majesty’s Government’s industrial strategy. I remind noble Lords of my interests as professor of surgery at University College London, chair of University College London Partners, business ambassador for healthcare and life sciences, and a member of your Lordships’ Science and Technology Committee, which is undertaking an inquiry on the life sciences industrial strategy.

It is quite right that there is a very acute focus on the question of life sciences, because they have played, and will continue to play in future, a vital role for our country and its economy. After financial services, the life sciences sector is one of the most important, and it is built on a substantial and impressive ecosystem that has been developed over many decades. We have four of the top 10 biomedical universities in the world; the published output from the research activity in those universities accounts annually for some 10% of citations globally and some 15% of the most highly cited papers published. Much of that research is undertaken with impressive collaboration with institutions in the United States, the European Union and the rest of the world.

We have two of the top 10 pharmaceutical companies based here in the United Kingdom. They represent a vital part of our economy, providing some £21 billion a year in exports. Consistently over the last 15 years, every year, they have contributed more than £1 billion in surpluses to the economy. The impressive large pharma sector is supported by more than 3,500 small and medium-sized enterprises in the medtech and biotech spheres; of those 3,500 companies, some 500 are actively exporting. They have seen substantial growth in the period 2009-14. For the medtech sector it is a 5.8% growth in revenue per annum; in the biotechnology sector it is 4% per annum in that period.

All that demonstrates that we have a fundamental and strong base but, in addition, we have something quite unique—the National Health Service, which provides care free at the point of delivery to all our citizens, and a wide range of care, and which has provided a unique opportunity over many decades to develop the base for our medical research, which in many areas leads the world.

What is striking is how the opportunities and the needs will grow, needs that will have to be addressed by the life sciences sector. The global value of the life sciences industries is some $1.6 trillion; by 2023, that will grow to over $2 trillion. With regard to healthcare expenditure and revenue, in the period between 2014 and 2027 it is estimated that expenditure on healthcare globally will grow by 5.8% per annum, but in certain markets, where we already have a very strong relationship and affinity, it will grow at an even greater rate—in India by some 15% per annum over that period, in China by 12% and in the Middle East and the Gulf by 8% per annum. So there are very big opportunities for the life sciences industrial base to make important contributions to our own economy. At the moment, some 300,000 people are employed in the science and technology sectors, in highly skilled jobs. The potential for that to grow over time to provide economic benefit and employment is quite obvious.

It is for that reason that there is so much focus on the life sciences strategy authored by Sir John Bell and presented along with its first set of sector deals before the Christmas Recess. In that strategy there is a focus on five important areas: to ensure that the science base in our country, to drive the innovation and discovery essential for life sciences, is properly invested in and maintained, not only in the public sector but through private sector investment through the sector deals; to ensure that the innovative companies that result from that discovery can grow in our country; and to ensure that the patient capital essential to allow them to grow over time to become substantial entities is provided in our own country, rather than those small enterprises having to look abroad and, potentially, move abroad, when they require greater investment. We need to provide the opportunity for an appropriate manufacturing base, with the skills required for those highly innovative industries to prosper and succeed in our country.

There are two elements that are vitally dependent on the National Health Service. The first is the adoption of these innovations at scale and pace within the NHS. This is critically important for a number of reasons. First, the delivery of healthcare in our country is not going to be sustainable unless we are able not only to adopt innovation to make the delivery of healthcare more effective in improving clinical outcomes but to use in the most efficient fashion the vital and valuable resource that the state makes available for the delivery of healthcare, providing true value for each of the health economies and institutions where that delivery takes place. Secondly, as we have heard from the noble Lord, Lord Mandelson, there is the need to harness the ability to use the unique data generated in the National Health Service through the care of countless millions of patients, day after day, month after month and year after year. This longitudinal database is unique in the delivery of healthcare anywhere in the world. It can inform research, development and innovation to develop new therapies and technologies and improve the way that we deliver care. All this has huge value in improving the health of our nation and in providing a remarkable opportunity to generate wealth. As the House has already heard, using the technologies that we develop, and the companies that have developed as a result of them, to export globally will transform healthcare throughout the world and, therefore, also ensure and enhance the standing of our country as a leader in healthcare and life sciences.

The life sciences industrial strategy makes a number of important proposals. One is the health advanced research programme, developed to mirror the very impressive programme established some decades ago by the Department of Defense in the United States to ensure that high-risk proposals—the so-called moonshot strategies—can be properly invested, developing transformational technologies and innovations that will have a profound impact, in this case on human health. It has worked so well in the area of defence in the United States because that department has such a huge expenditure budget. This brings me to the question of the vital role that the life sciences strategy envisages for the National Health Service. It must be able to adopt innovation at scale and pace and to provide confidence to those who are going to invest in high-risk strategies that if they are successful there is the opportunity for the home market—the remarkable National Health Service—to adopt those innovations for the benefit of patients and our fellow citizens.

In this regard, there is some concern. The strategy is excellent, but it is unclear how the Government are going to secure the role that the NHS must play in ensuring that the life sciences strategy can be a success. I have three questions for the Minister. First, how do the Government envisage securing the critical role which the National Health Service must play in the broader life sciences industrial strategy? How will funding be made available to ensure the adoption of innovation at a local level, which is vitally important to support the industries that are envisaged as part of the life sciences strategy? How can the Government aid in transforming the culture in the National Health Service, to ensure that what needs to be done by way of adoption of innovation, beyond its funding, will be practicable and possible in terms of developing the remarkable staff who work in the service, ensuring they have the skills to interact with the innovations that are going to be available and overcoming the culture which is sometimes resistant to adopting innovation?

Finally, how will they ensure that lessons are learned from previous attempts at a life sciences strategy? Will the important lessons from the 2011 announcement of a life sciences strategy by the Prime Minister of the time and the subsequent innovation, health and wealth strategy, announced by Sir David Nicholson when he was leading the NHS, be properly adopted to ensure the success of this strategy?