by GK Strategy 22nd December, 2017

The Life Sciences Sector Deal: Transformative Healthcare Innovation?

As part of the Government’s Industrial Strategy, the Secretary of State for Business, Energy and Industrial Strategy, Greg Clark has announced a Sector Deal between government and the life sciences industry.

The Life Sciences Sector Deal, the first of four outlined in the Industrial Strategy White Paper, represents a significant investment by 25 organisations, including commitments from GlaxoSmithKline to invest £40 million in UK genetic research and from Merck to invest in a major new research facility in London. Government figures including Dr Liam Fox, Secretary of State for International Trade, have been quick to praise the Deal, stating that it represents ‘a clear signal to life science investors around the world that the UK is open for business.’

The Deal follows the themes of Sir John Bell’s 2017 Life Sciences Industrial Strategy, which included recommendations to the Government that the use of artificial intelligence (AI) should be increased. The Reigus Professor of Medicine at Oxford University also advocated the creation of two entirely new industries alongside four UK companies worth more than £20 billion over the next decade.

Key themes of the Sector Deal include building on the UK’s position as a world leader in the biomedical discovery and continuing to develop the UK’s clinical trials capabilities in combination with a progressive regulatory system.

Running through the Deal is an emphasis on “technologies of the future” in order to grow the UK’s reputation for pioneering earlier diagnostics with investment coming from the government’s £4.7 billion Industry Strategy Challenge Fund. This money will be used to fund AI programmes which aim to develop digital pathology and radiology systems that could be implemented across the NHS. The Government has also committed £162 million from the first wave of the Industrial Strategy Challenge Fund to develop innovative medicines manufacturing infrastructure and to enable SMEs to manufacture advanced therapies.

The Government has described the Deal as “transformative” and the associated investment as “substantial” and “significant”. Amongst the announcements made is a collaboration between government and industry to deliver 20,000 apprenticeships in the science sector by 2020, alongside an ambition to increase R&D spending to 3% of GDP. However, there are relatively few concrete announcements in the Deal, whilst the money committed has already been made in the Autumn Budget and Industrial Strategy White Paper.

Questions also remain around whether the NHS has the resources to deliver on Life Sciences with the Lords Select Committee on Science and Technology continuing to take evidence into the Life Sciences and Industrial Strategy.

The current inquiry is focused on whether the government has the necessary structures in place to continue to support the sector and how the NHS can use procurement to stimulate innovation. A recent committee session highlighted that the Life Sciences Industrial Strategy is deliverable given the right regulatory and cultural environment, and these factors were more important than limitless funding. The committee also highlighted the challenge of smoothing the interaction between SMEs and the NHS to improve the uptake of innovation.

With the Life Sciences sector worth around £64bn a year to the UK economy, the sector is high-tech, research-intensive, diverse and innovative. As such, a strong sector would benefit the UK’s economy and help improve the nation’s health. Although the Sector Deal between the Government and the life sciences industry is certainly welcome, it fails to provide the necessary answers to the risks the industry faces from Brexit, which is barely mentioned.

We have already seen the European Medicines Agency (EMA) relocate to Amsterdam, and with uncertainty lingering over the future of some funding streams and migration which are key to ensuring the talent pool for the life sciences sector, this remains a politically sensitive issue.

It, therefore, remains to be seen if the Life Sciences Sector Deal provides the necessary antidote to Brexit in order to ensure the UK continues to remain at the forefront of developing new innovative treatments to improve patients’ lives.

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