Annex 4
SUMMARY OF EPSRC PHARMACEUTICAL SECTOR BRIEF
2003
SECTOR ANALYSIS
The pharmaceuticals industry is one of the UK's
strengths. Companies based in the UK maintain a significant presence
in all the major markets of the world. Overall, one third of UK-based
industry is UK-owned and a further one third is US-owned. The
UK industry is very research intense. Key data for the industry
is listed below:
| Investment in UK R&D (2001)
| £3.04 | billion |
| Sales of UK manufactured pharmaceuticals (2001)
| £8.79 | billion |
| Gross Value Added (GVA) (2002) | £20.4
| billion |
| Total employment (2001) | 69,000
| |
The UK pharmaceuticals market itself is relatively small,
with only a 3% share by value of the world market for prescription
medicines, compared to nearly 40% for the US, but in terms of
overall competitiveness, the UK is only second to the US and well
ahead of its main European counterparts. One third of the people
employed in the pharmaceuticals industry work in research. In
addition, another 250,000 jobs are generated in related industries.
Figure 2 illustrates the UK's significant share of the top prescription
medicines.
Figure 2:
SHARE OF THE WORLD'S TOP 25 PRESCRIPTION MEDICINES, 19989
In March 2000, the Pharmaceutical Industry Competitiveness
Task Force was established with the following terms of reference:
"To bring together the expertise and experience of the
industry leaders in the UK with government policy makers to identify
and report to the Prime Minister on the steps that may need to
be taken to retain and strengthen the competitiveness of the UK
business environment for the innovative pharmaceutical industry".
Industry takes the view that the Task Force has provided
an effective platform for dialogue between the Government and
the pharmaceutical industry. A further report has been published
updating key performance indicators for the industry. The overall
conclusions of this report are that the pharmaceutical industry
continues to make an important contribution to the UK economy
aided by a strong basic scientific research infrastructure within
the UK. With regard to medicines, the regulation process was found
to be relatively rapid in the UK (but slower than the US) while
uptake of new medicines remained slow in the UK compared to other
countries.
Pharmaceuticals are one of the UK's leading manufacturing
sectors, bringing in a trade surplus of £2.9 billion in 2001.
The figure below shows the world trade in pharmaceuticals in 2001.
Figure 3:
WORLD TRADE IN PHARMACEUTICALS, 2001
INDUSTRY R&D
Expenditure on research and development by industry within
the chemicals and pharmaceuticals sectors and the biotechnology
industry is several times larger than the most generous estimates
of the relevant public and charitable research spending in these
sectors. For example, the pharmaceuticals sector conducts some
73% of UK R&D expenditure in its own field, and around 40%
of all industrial R&D expenditure in the UK, spending about
£7 million each day.
The UK pharmaceuticals sector and biotechnology industry
has also been highlighted by the DTI R&D Scoreboard as having
an especially high R&D intensity, 14.6% compared with 13.0%
internationally, and 2.2% for UK industry overall. It is second
only to the USA's industry in this respect.
As part of its strategy of engagement with industry, EPSRC
visits players across this sector on an ongoing basis to increase
its understanding of their businesses and to make industry more
aware of the opportunities for active interaction with EPSRC policy
and activities. This is in addition to the strong relationships
with many companies through community consultation and direct
participation by industry in peer review and policy panels, research
projects and training.
The top 10 players in the UK pharmaceuticals industry in
term of recorded R&D spend are GlaxoSmithKline, AstraZeneca,
Pfizer, Shire Pharmaceuticals, Eli Lilly, Merial, Roche, Merck
Sharp & Dohme, and Novartis. For global companies it is not
always meaningful to disentangle UK from global expenditure, but
GlaxoSmithKline is recorded by DTI as the largest investor in
R&D in the UK, having a global spend of £2.65 billion
in 2001, with AstraZeneca recorded at £1.9 billion. Pfizer
is recorded by DTI as the sector's largest investor specifically
in the UK in 2001, spending £373 million.
INDUSTRY DRIVERS
Business drivers:
Considerable restructuring, including significant mergers
and acquisitions, has taken place in recent years within the pharmaceuticals
sector. Increasing competition, the cost of clinical trials and
a shortage of new drugs reaching launch places companies under
continuous pressure to develop new products in shorter timeframes.
Skills base:
The provision of appropriately trained people in sufficient
numbers is a key driver for the sector, both at masters and postgraduate
level. There is a need for a broad knowledge base but there is
also a need for trained people with specific expertise. Some knowledge
gaps have been reported in analytical chemistry, chemoinformatics
and bioinformatics.
Increasing demand for medicines:
The ageing and increasingly wealthy population will require
new treatments and innovative and more effective medicines. There
is also an increased emphasis on maintaining and enhancing lifestyles
as well as curing diseases. Along with this, moves towards personalised
medicines are also likely to open up new opportunities.
Intellectual property:
A number of companies have commented on difficulties in agreeing
Intellectual Property Rights (IPR) with some universities. This
includes commodity chemicals, fine chemicals and pharmaceuticals
companies, who report that demands for unacceptable agreements
from universities may be limiting collaboration.
University-academe collaboration:
Many companies do not see Industrial CASE as a mechanism
for training students but rather as a mechanism for maintaining
links with university departments. It is also seen as a good route
for getting exploratory research done. Difficulties have been
reported by some companies in setting up normal CASE type conversions
following the introduction of Doctoral Training Accounts (DTA).
In some cases companies chose to fund students directly in research
areas of interest to them, thus circumventing the above problems.
Globalisation:
The business climate in the UK (legal, regulatory, fiscal
and social) will be increasingly important in the ability of the
UK to attract new investment. Large international companies increasingly
set their sights globally when seeking collaborations, with a
preparedness to go overseas rather than compromise on IPR. The
same global outlook applies when considering recruitment options.
Some strong local and regional relationships do exist between
industry and Higher Education Institutes (HEI), particularly for
small and medium sized companies.
Research and technology:
In many areas of scientific research, the focus is shifting
from a wholly experimental approach to a combination of modelling
and simulation with some experimental validation. Visualisation,
imaging and informatics will change the style of work in the future
within the chemicals, pharmaceuticals and biotechnology industries.
THE SECTOR
AND EPSRC
It is widely recognised that the pharmaceuticals sector is
large and diverse, with a history of interaction with EPSRC. Overall,
EPSRC funding is divided into two funding streams, research and
training. All research proposals received by EPSRC are classified
according to the sector(s) that they would underpin, whether or
not any industrial collaboration is proposed.
For the purpose of this brief, data has been collated for
proposals that underpin the pharmaceuticals and biotechnology
sectors. In addition, EPSRC co-funds research projects that are
led by other Research Councils that also underpins these sectors
although this funding is excluded from to the figures quoted below.
EPSRC interaction with companies in these sectors is not
restricted to collaborative funding partnerships. EPSRC receives
valuable input from industry in peer review and wider strategic
consultations. All EPSRC data given in this brief is based on
grants current on 1 April 2003. Interactions extend to, for example,
the secondment of EPSRC staff to placements in pharmaceutical
companies.
As the current EPSRC grant portfolio is dynamic in nature,
this only represents a snapshot of current EPSRC funding at a
given point in time. The level of EPSRC funding relevant to the
pharmaceuticals and biotechnology sectors is shown by programme
area below. The total value of grants relevant to the pharmaceuticals
and biotechnology sectors is £175 million.
Figure 5.3:
EPSRC funding by programme area relevant to the pharmaceuticals
& biotechnology sectors (The "Other" category contains
various cross programme and cross council activities such as the
Basic Technology programme).
The figure below only shows the extent of EPSRC research
collaboration relevant to the pharmaceuticals and biotechnology
sectors for companies with 5 or more current collaborations. Three
companies shown viz. AstraZeneca, GSK and Pfizer appear in the
top 10 companies of the DTI pharmaceuticals and biotechnology
R&D scoreboard for 2002. A number of the other companies appear
in other DTI R&D scoreboards.
Figure 5.4:
Current EPSRC collaborative activity with industry relevant
to the pharmaceuticals and biotechnology sectors (An additional
contribution of £750,000 was made by GSK towards the joint
EPSRC/GSK call for proposals in combinatorial chemistry).
EPSRC currently supports over 700 EPSRC funded grants underpinning
the pharmaceuticals and biotechnology sectors distributed cross
the UK academic sector. The figure below shows the academic institutions
with current EPSRC grant support of £4 million or greater
relevant to the pharmaceuticals and biotechnology sectors.
Figure 6.2:
Academic institutions with major current EPSRC grant funding
relevant to the pharmaceuticals and biotechnology sectors (University
College London does not include funding provided to the Royal
Institution)
COLLABORATIVE TRAINING
ACTIVITIES
EPSRC is currently consolidated its support for industrial
relevant collaborative training into University-based Collaborative
Training Accounts (CTAs). CTAs combine several previously separate
funding mechanisms and schemes within a single account with the
purpose of putting collaborative postgraduate education and training
on a more strategic footing. EPSRC supported CTAs will consolidate
support for training activities relevant to the chemicals, pharmaceuticals
and biotechnology sectors listed below.
Engineering Doctorate (EngD):
The EngD is a four-year postgraduate award. It is a radical
alternative to the traditional PhD and was designed to be better
suited to the needs of industry. EPSRC allocates 10 studentships
per annum to each EngD centre:
— UCL—The Bioprocess Leadership Programme—integration
of bioprocess research with the generation of entrepreneurial
skills through close linkage with the bioprocess industry.
— Birmingham—Formulation Engineering.
— UMIST—Engineering for Manufacture Process
and Production.
Masters Training:
EPSRC sponsors masters-level training, including continuing
professional development activities, in a number of areas relevant
to the Chemicals, Pharmaceuticals including analytical science,
bioinformatics, chemical and biochemical/process engineering (including
sustainability, clean technology and catalysis), physical and
theoretical chemistry and bio-molecular science.
Industrial CASE:
Through Industrial CASE, a number of studentships are allocated
to companies. The companies can then choose the academic partner
that hosts the CASE student. EPSRC allocated a total of 330 Industrial
CASE awards in 2001, of which 59 were associated with the pharmaceuticals
sector.
COLLABORATIVE RESEARCH
ACTIVITIES
Innovative Manufacturing Research Centres (IMRC):
A key element of EPSRC funded IMRCs are the provision of
a focused and strategic approach to the support and organisation
of manufacturing research within the UK. The Bioprocessing Centre
at UCL is of direct relevance to this sector. The centre has been
established through direct partnership with a group of leading
companies in the field of biopharmaceutical research and will
focus on novel ways of translating exciting discoveries in the
life sciences to practical outcomes such as advanced medicines.
Faraday Partnerships:
Faraday partnerships aim to promote improved interactions
and networks between the UK science, engineering and technology
base and industry, through the involvement of intermediate organisations.
The Faraday Partnerships of direct relevance to this sector are
CRYSTAL (Green Technology for the Chemical and Allied Industries),
Insight (High Throughput Technologies for Product and Process
Development) and Pro-Bio (UK Centre of Excellence for Biocatalysis).
Foresight Challenge, Foresight LINK and LINK awards:
A number of projects relevant to the pharmaceuticals sector
are supported under these schemes including the Institute of Applied
Catalysis (iAc), the Centre for Process Analytics and Control
Technology (CPACT), Lab-on-a-Chip and Micrograms to Multikilos.
Strategic Partnerships:
EPSRC has recently engaged in a number of flexible funding
partnerships with industry. The EPSRC/GSK Combichem Initiative
was one of the first single company and EPSRC joint initiatives.
An open call for proposals for research in combinatorial and solid
phase chemistry was issued, with £1.5 million of funding
being split equally between EPSRC and GSK. Discussions with key
companies in the sector are on-going over the development of further
strategic partnerships in a number of areas.
FUTURE ISSUES
Interface with the Chemistry Leadership Council (CLC):
The CLC was established on the recommendation of the DTI
Chemicals Innovation and Growth Team (CIGT). The sector team has
been engaged with the CLC and more extensively with its Innovation
Task Force (ITF) that was charged by the CLC with the identification
of research and innovation priorities. The Sector Team is working
closely with the ITF in two main areas of common interest; the
chemistry/chemical engineering interface and physical organic
chemistry. EPSRC has also engaged with CLC and the ITF over the
planned development of national and regional Chemicals Innovation
Centres (CIC).
Intellectual Property Rights (IPR):
The current EPSRC policy is to assign responsibility for
the exploitation of intellectual property (and the returns from
it) to universities. Consideration will be given to the "signposting"
of model agreements and the provision of training to grantholders,
where appropriate. The sector team will continue to gather industry
views on the successful establishment of IPR arrangements with
universities.
Industrial CASE:
An internal review of Industrial CASE is currently taking
place. One possible outcome may be an attempt to place some Industrial
CASE studentships more strategically through sector-specific targeting.
The sector team will continue to scope these ideas in sector discussions.
People:
Skill shortages have been reported in some areas such as
analytical chemistry, chemo- and bio-informatics. However, there
is also a greater emphasis from pharmaceuticals companies on the
need for the provision of a sufficient number of suitably trained
potential recruits compared to other sectors.
Structure of the Chemistry PhD:
There has been some discussion recently on the structure
of the chemistry PhD and the provision of appropriate postgraduate
training. Concerns have been expressed by some pharmaceutical
companies over the lack of breadth of knowledge and industrial
awareness of some postgraduate applicants.
EPSRC Peer Review College:
The sector team has helped to raise awareness of the recent
college exercise amongst chemicals, pharmaceuticals and biotechnology
companies. This has contributed to industrial membership of the
new college and also greater industrial participation in peer
review.
Strategic Partnerships:
A key aim for the sector is to try to facilitate a number
of "Blue chip" type strategic partnerships with industry,
aligned to priority research areas within the Chemistry, Life
Sciences Interface and Engineering programmes. Options for partnerships
could include a joint call for proposals in key research areas,
support for industrial research chairs, consortium proposals involving
a range of companies or a major joint funded collaborative programme
with a single company.
Future Discussions:
Sector visits are planned to Roche, Elli Lilly and Evotec
OAI in the pharmaceuticals sector and dialogue will also be maintained
with the CIA, Association of the British Pharmaceutical Industry
(ABPI) and RSC.
CURRENT ACTIVITY
AND FUTURE
TARGETS
The Attached analysis depicts current involvement and future
targets for the sector team in interacting with pharmaceutical
companies. The graphs are based on the six original objectives
of EPSRC sector work and illustrate both differences in the level
of current and projected engagement with companies across the
sectors and also the relative success of achieving each objective
within a given sector.
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