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United Kingdom Pharmaceuticals and Healthcare Report Q1 2011
Business Monitor International, Jan 2011, Pages: 108
The United Kingdom Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on United Kingdom's pharmaceuticals and healthcare industry.
The UK is ranked second among the 10 Western European markets surveyed in BMI's Business Environment Ratings (BERs) for Q111, moving up from fifth position in the previous quarter. However, while it is one of the most developed pharmaceutical markets in the world, pressing economic and political issues, combined with its strict pricing and reimbursement regimes have formed major clouds on the pharmaceutical market's horizon.
Highlighting the dimming outlook, the UK's coalition government has identified drug prices as an area of cost containment, aiming to implement a new value-based medicine pricing system to replace the current Pharmaceutical Price Regulation Scheme (PPRS), due to come to an end in 2013. BMI notes that the implementation of a value-based pricing system will eradicate the UK's position as one of the few markets in the world where drugmakers are free to set prices for their medicines. The adoption of a valuebased medicine pricing system will also replace the NICE's health technology assessments, which in essence dictate a medicine's availability on the NHS.
BMI believes the new value-based pricing system will improve the chances of medicines becoming available on the NHS, simply because assessing the value of a medicine is a much simpler method of evaluating its cost-effectiveness than using quality-adjusted life years (QALYs) and the strict boundaries in place with regards to their thresholds.
BMI believes the new system will provide the government with a more influential role in the setting of drug prices, creating much-desired cost savings, though this will not sit well with drugmakers. Despite this, we note that the UK will continue to be one of the top ten drug markets in the world by value; in 2009 the country's drug market was valued at GBP19.28bn (US$29.88bn), the sixth largest drug market globally. In 2014, we calculate that the country's pharmaceutical market will be worth GBP18.74bn (US$32.80bn), making it the seventh largest in the world. While the market size will decline in value - attributed to the patent cliff and pricing pressures - we believe that the consistently high pharmaceutical spending values highlight the attractiveness of the UK as a location, in which to market drugs and potentially base operations.
The UK has a strong domestic pharmaceuticals industry that represents a considerable force on the international market. The vast majority of major multinationals are also present in the country, through local subsidiaries engaged in marketing, manufacturing and research and development. The leading local companies in terms of market capitalisation are GlaxoSmithKline (US$103.29bn) and AstraZeneca (US$68.37bn).
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