CEO Update | 19 December 2022

Reflections on 2022 and look forward to 2023

Our life science sector is continuing to deliver world-changing products and services at a pace and scale that will transform lives in the years to come. And whether the breakthrough highlighted be next-generation products for type 2 diabetes, novel malaria vaccines, new developments in mRNA vaccinology or cell and gene therapy for the early diagnosis of cancer, I see the UK innovation ecosystem engaged and involved in world-leading programmes.

It is great to see our community thrive and grow.

Also this year we have seen TechBio become a real phenomenon. It’s great to see the buzz in this community as the application of artificial intelligence (AI) to drug discovery and development is taking significant steps forward. Investors are interested, the science is working and we’re engaged in the policy, as demonstrated by our paper on Secure Data Environments, published last week.

So I’ve decided to take the plunge and use OpenAI's ChatGPT to help me speed up the writing of Newscast. I asked what has been the impact of the UK government’s agenda on the life science sector in 2022 this is the answer I got:

“I'm sorry, but my knowledge cutoff is 2021, so I am not able to provide information on the UK government's impact on the life science sector in 2022. I can, however, provide general information on the life science sector in the UK and the role of the government in this area. It's important to note that the government's role in the life science sector is complex and multifaceted, and can vary depending on the specific issues and challenges facing the sector at a given time.”

So I’m not quite out of this job to a computer yet then.

The other big breakthrough this year has been the success of the Scale-up Taskforce seeking to unlock new forms of investment into UK life science and other growth industries has gained momentum and credibility. The package of reforms announced in Edinburgh means we are on the threshold of changes in the financial services and pension industry that could unlock new forms of capital for our sector for the next generation. And with our own Chair, Dan Mahoney, appointed as the UK’s life science investment envoy we can be assured of having a leading voice in this important agenda.

And we mustn’t overlook the transformation of the Labour Party’s policy platform to innovative business that we’ve seen develop this year. Although we are still two years out from a General Election the seriousness of the engagement with our sector that we have seen from the Labour frontbench team is transformed from the era of Jeremy Corbyn.

However, there are some balancing factors to consider.

First is that the effective closure of NASDAQ to life science IPOs and the depressed share prices of many public biotech stocks is having an impact on investment appetite. Many VCs are more focused on existing pipelines. But there are still investors with dry powder (including pharma companies needing innovation) and the UK is proven capable and has a stable and broad community of skilled scientists.

Close to home for the BIA this year has been like no other in UK politics – the world has looked in to see the death of our longest reigning monarch, two Conservative Party leadership coups, three prime ministers, four chancellors, five education secretaries, six fiscal events and more than 30 exits from the cabinet.

This chaos has impacted our sector as long-term policies like R&D tax credits for SMEs have been changed overnight. Government credibility has impacted the value of the pound. The Vaccine Taskforce has been disbanded with no visible leadership or structured engagement with industry, and we turn the year with the much-anticipated deal between the UK government and Moderna not inked.

VPAS

Last week saw the publication of the latest data on the VPAS scheme which put the UK medicines revenue clawback rate up to 26.5% for 2023 - far outside historic or international norms, adding financial instability to political risk to the UK as a therapies market. 

In combination, these policy choices by the governments we’ve had this year make it harder, not easier, to sell the life science vision of the UK as the right place for global investment but I remain committed to the vision.

Going to JP Morgan – webinar available to view

I will start the new year at JP Morgan in San Francisco. To help you prepare we hosted an excellent “Get set for JPM webinar” that shares insider knowledge on how to get the most from the week, alongside the messaging we’ll be selling about our sector.

R&D tax credits campaign

The BIA continues to engage with the Government on the impact of the R&D tax credit changes on our sector. This afternoon the first evidence session by MPs on the Treasury Select Committee will take place in Parliament. This inquiry explores whether the benefits to the UK economy achieved by the system justify the cost to the UK Exchequer in foregone tax revenue and will use Video Game Tax Relief and R&D Tax Relief as case studies to explore how tax reliefs can impact industry in the UK and the wider economy. One of the key expert witnesses they have called is Alex Dunnagan of TaxWatch. He is on record as describing R&D tax credit changes as a “blunt instrument” that will 'obviously have an immediate impact on the support given to SMEs carrying out genuine innovation in the field of science and technology'.

Tomorrow from 11:30 are questions to the Treasury Ministers in Parliament. This provides an opportunity for Ministers to amplify or clarify key messages they want to get across and we shall be watching closely to see if R&D tax credits come up. It’s obviously the season where someone in Westminster or Whitehall is prepared to spread good cheer as today’s Sun newspaper carries a story that increases in tax duty on alcohol will be delayed by 6 months. The Sun has been briefed that the Chancellor is 'due to announce he will delay the pain and set new duties on booze at next year’s Budget in a welcome U-turn'. The value of similar early messaging and signalling policy intent on R&D tax credits would make getting international investment into UK life sciences far easier. I’ll be watching with a mince pie in hand.

Government response on the future strategy for batch testing of medicinal products in Great Britain

The government has decided to make permanent the approach favoured by the BIA and the life sciences sector: no import testing or UK Qualified Person certification for medicines imported from countries on the list of approved countries for import, including from EU/EEA countries. The UK’s future batch testing regime takes into consideration the submissions to the public consultation including the BIA response to the DHSC consultation, stakeholder engagement and views of the Medicines and Healthcare products Regulatory Agency (MHRA).

This is great news – we are delighted with the outcome of the batch testing review which ensures continuity of the current arrangements for importers and wholesalers as well as the continued supply of, and patient access to, medicines, while avoiding duplication of testing and cost increases to industry and the NHS.

I would invite you to read the formal government response and conclusion of the batch testing review, which includes a detailed analysis of the public consultation.

For those of you with longer memories, you might remember that the BIA successfully argued for mutual recognition of QP testing immediately after the Brexit referendum and this deal seemed doable to the Theresa May government (remember her?) – obviously this was unacceptable for Boris Johnson and he resigned from the Cabinet over the planned Chequers deal. Now the UK has accepted no import testing for the long term – this does make it straightforward for existing products but does mean on a five-year view that high-quality scientific jobs that were done here have been exported to the EU as a direct result of Brexit.

Genome UK implementation plan

England’s three-year Genome UK implementation plan was published last week. In addition to some high-profile announcements on newborn sequencing and cancer diagnosis, the plan highlights the critical role of SMEs in the genomics ecosystem. The Government has committed to assessing the process through which SMEs apply for access to genomics resources. They also commit to 'simplifying] the application process for small businesses which want to supply to government'. The plan also showcases the work of the BIA - from Genomics Nation to MAC LeaP (Manufacturing Advisory Committee Leadership Programme) to the Scale-up Taskforce. We look forward to working with the Government on the implementation of the plan to help make the UK the best place to start and scale genomics companies.

Talk continues on TRIPs waiver whilst Oxford and Serum get on with delivering an ebola vaccine

The World Trade Organisation (WTO) TRIPS Council has decided to defer making a decision on whether the IP waiver for COVID-19 vaccines should be extended to COVID-19 therapeutics and diagnostics. In June this year, the deadline for a decision on whether or not to extend the TRIPS waiver was set for 17 December. Over the past six months, members have been unable to reach consensus on the substance of an extension, so that the decision was made over the weekend to extend the deadline. A new date has not been set yet.

Earlier in December, the US announced its support for extending the deadline in order to continue its in-depth investigation into COVID-19 therapeutics and diagnostics and whether existing WTO intellectual property protections are an impediment to access to medicines or a critical element of innovation.

Meanwhile, in the real world of pandemic action, Oxford’s Ebola vaccine candidate has been shipped to Uganda, just 80 days after WHO declared a Sudan ebolavirus outbreak, having been manufactured by its partner the Serum Institute of India (SII) and working in close partnership with the WHO. It’s great to see that more than 40,000 doses of Oxford’s Ebola vaccine have been manufactured by SII in just 60 days and doses have left India for Uganda. 

What’s frustrating for me is that much of the discussion in Geneva still isn’t informed by, or focused on, what is actually making a practical difference to outbreak responses. I hope Jeremy Farrar is able to reset the discussion as he takes on his new role at the WHO next year.

Thank you for your help and support this year, best wishes for the festive season and enjoy the holidays.

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