Announcing that this ‘Spending Round’ had been pulled forward from the expected date in October, the Chancellor called out three priority areas for increased spending – “schools, hospitals and police” – whilst also committing to stick within current borrowing rules.
A day later the Prime Minister announced that the Queen’s Speech will take place on 14 October and would focus on “helping the NHS, fighting violent crime, investing in infrastructure and science and cutting the cost of living”.
The ABPI will be watching the Chancellor’s announcements closely, particularly around announcements on investing in science infrastructure and the NHS.
There are three areas where we think the Chancellor can make announcements to show ambition in these areas:
The ABPI welcomes the Government’s aim of reaching 2.4% of GDP invested in R&D. To reach this target, the Government should use the spending round to announce a significant investment in science infrastructure.
This should also be accompanied by action to support pharmaceutical and biotech companies to invest in UK R&D. The existing system of UK R&D tax credits is an essential enabler for investment in this country.
However as the nature of R&D changes - for example, as more work is done in collaboration - it is important that the R&D Tax credit evolves. Modernising the R&D tax credit to ensure that all aspects of R&D are eligible for support would help the UK be competitive when it comes to global investment.
Medicines manufacturing is also changing. Introducing fiscal incentives such as a capital grant for new medicines manufacturing facilities could help attract global investment to the UK. The UK could learn a lot from other countries which have introduced such policies and seen major investments as a result.
The UK life sciences sector is the most productive sector in the UK economy. However, not having the right talent in place is sometimes a barrier to growth and opportunities for further investment.
Apprenticeships can be successful in filling some of these skills gaps in the life sciences sector. However, currently only 6.5% of the levy that companies are required to pay the government benefits life sciences companies. The levy could work better to deliver the skills the sector needs.
To help address this the Chancellor could announce some more flexibility in the Apprenticeship Levy, including allowing unrecovered funds to be transferred into a new skills fund to support education in needed skills areas such as in genomics; immunology; bioinformatics and chemoinformatics; and clinical pharmacology.
The ABPI wants the UK to be the best place in the world for patients to get the latest medicines and vaccines.
The UK has one of the most robust systems in the world for assessing value for money for the NHS in bodies like NICE and the SMC. The Voluntary Scheme for Branded Medicines Pricing and Access (VPAS) agreed between the UK government and the ABPI gives the NHS complete certainty about how much it will spend on branded medicines.
To underline the Government’s commitment to ensuring UK patients can access new medicines, the Spending Round could make sure that the ‘discount rate’ currently applied to health benefits by NICE is reduced from 3.5% to 1.5%, in line with the Treasury Green Book update. This is important because our industry is increasingly producing medicines that are potentially curative.
The ABPI believes that changing the discount rate on health benefits in this way would allow for more accurate value assessments for medicines and speed up access.
The ABPI also supports the Government’s 5-year action plan for antimicrobial resistance. The plan includes trialling a new way of valuing and paying for antibiotics. To ensure this commitment can be delivered, the spending review should include resources for a centrally administered fund so we can ensure that the right antibiotics can be available and effective for UK patients.
Follow @ABPI_UK on Twitter for our reaction on Wednesday.
We want the UK to be the best place in the world for patients to get the latest medicines and vaccines.
Mike Thompson, Chief Executive of the ABPI