The UK government is reported to be trying to restart talks over drug pricing and rebates after MSD’s shock decision to scrap a £1 billion investment programme.
According to the Financial Times, Health Secretary Wes Streeting (pictured above) is pushing for fresh negotiations on the level of rebate paid by the industry on medicines supplied to the NHS through the voluntary and statutory schemes, after the collapse of talks last month.
It also said there is infighting within government – between the Department of Health and Social Care and the Treasury – with accusations flying that penny-pinching had undermined the talks and limited Streeting’s leeway for negotiation.
Now, says the FT, the DHSC is pushing for a more generous settlement from Chancellor Rachel Reeves, who is in the midst of preparing for what could be a challenging Autumn Budget – due for delivery on 26th November – given that UK economic growth has remained pretty stagnant this year.
Meanwhile, there has been widespread dismay over MSD’s decision, which will see around 125 jobs lost as it abandons a facility already under construction and shuts down labs at the London Bioscience Innovation Centre and Francis Crick Institute, moving the R&D operations carried out there to the US.
The news emerged as the Association of the British Pharmaceutical Industry (ABPI) published a report indicating the UK is losing out to competing economies in attracting R&D projects, clinical trials, and foreign direct investment (FDI).
Richard Torbett, chief executive of the ABPI, said MSD’s exit is a “real blow to the UK’s life sciences ambition” and “must be used as an opportunity to reflect on what factors are driving companies to make such difficult decisions, and what this country can do to ensure it is attracting the high-quality investment we need and not driving it away.”
That sentiment was shared by Sharon Todd, chief executive of the Society of Chemical Industry (SCI), who said she was alarmed by the growing exodus of large-scale businesses from the UK.
“Science-based businesses such as pharmaceutical and chemical companies have not only a rich, proud heritage in Britain, but are critical to driving growth in the economy and building our national resilience,” said Todd
“We have seen an increasing number of industrial plants shutting down due to the UK’s high energy prices, resulting in loss of jobs and competencies,” she added. “The loss of Merck together with statements from AstraZeneca this summer that it is considering relisting in the US are major markers of the lack of competitiveness in the UK should be setting off alarm bells in government.”
Meanwhile, Prof Dame Ijeoma Uchegbu, chair in pharmaceutical nanoscience at UCL School of Pharmacy, called MSD’s move a “huge blow” for the sector.
“It is not just the science and innovation that will now happen in a different location outside of the UK and the loss of the associated science jobs; there will also be a negative impact on the science ecosystem as the collaborations between [MSD] and scientists and technologists in the university/healthcare sectors will be lost and innovation in these sectors thus hampered,” she added.
“Resets such as these also harm up-and-coming companies who may have relied on upstream innovation from such a well-funded…facility in order to create other products and services.”
