Cogent Industries

Pharmaceutical

The industry produces a range of products, from antibiotics to the contraceptive bill, and continues to pioneer new treatments for many serious and life-threatening diseases. In short, this is an industry that enhances and, in some cases prolongs, many lives all around the world. The pharmaceuticals industry is also responsible for the safety and effectiveness of the products it manufactures. In 2005, pharmaceutical companies in the UK spent £3.3billion on pharmaceutical research and development – an investment of around £9million every day. Indeed, around a quarter of all UK industry-supported research and development comes from the pharmaceutical industry. It is also an industry that needs highly skilled people, as it is through their employees’ skills and talents that they are able to be innovative and compete internationally.

Trends
Total Turnover in the Pharmaceuticals Industry 1995-2006

Source: Annual Business Inquiry 2006

Approximate gross value added at basic prices in the Pharmaceutical Industry 1995-2006

Source: Annual Business Inquiry 2006

Total average employment in the Pharmaceuticals Industry 1995-2006

Source: Annual Business Inquiry 2006

Total turnover in the Pharmaceuticals industry has increased by £6.4 billion since 1998. Gross Value Added in the industry has significantly increased. Total employment in the Pharmaceuticals industry has remained stable since 1998.

Research and development
Total Expenditure UK Government Overseas Own funds Other UK Businesses
£3,949m £4m £1,533m £2,093m £319m

Source: R&D in UK Businesses 2006, ONS, January 2008

Source: R&D in UK Businesses 2006, ONS, January 2008

There has been a consistent increase in R&D spend since 1998. R&D in the Pharmaceuticals industry is predominantly (53%) funded by the industry itself. 28,000 employees are employed in R&D activity in the Pharmaceutical industry.

The skills gap in the petroleum market


Source: Labour Force Survey (Q1-Q4 2007)

For direct employment in the Pharmaceuticals industry:

  • There is an under supply of people qualified to S/NVQ level 2 and 3 compared to the proportion of jobs at those levels
  • There is a 27% deficit of people qualified at S/NVQ levels 2 and 3
  • Level 4 and 5 occupations such as senior mangers, scientists and chemical engineers account for 61% of the overall workforce
The Industry 2020

Research by the Association of the British Pharmaceutical Industry, on over 100 UK Pharmaceutical companies, has revealed:

  • More than a third of companies (35%) were expecting to reduce the level of investment in research and development over the next 12 months, currently standing at nearly £4 billion a year.
  • Investment in asserts such as buildings and equipment, etc is expected to decline by a similar amount (36%)
  • 46% of companies are expected to reduce the number of UK clinical trials
  • The level of manufacturing is forecast to drop by 42% of those surveyed
  • And almost all the companies surveyed – 97% – said there is now an increasing level of uncertainty within the UK pharmaceutical market environment.
Priorities

The success of the industry in Britain, and the ability to retain world-class pharmaceutical company investment, are critically dependent on the willingness of the Government to support an environment in which the industry can conduct its research, manufacturing and marketing activities as effectively as in all the other countries that are competing for investment. Recently, the Government has addressed a very broad range of issues relating to clinical research, licensing, intellectual property rights, the science base and the domestic market framework.

Priorities continue to remain around the training and recruitment of people at very high skill levels to maintain competitive research and production facilities.

The stock of skilled people in this industry is a positive asset for the UK, and the priority for Cogent's sector should be to ensure that this remains the case into the future.