Jameel Zayed of Leyton, the UK’s leading innovation funding consultancy, highlights the British pharmaceutical industry’s rapid response to COVID-19 and the three ways in which the sector is driving national innovation forwards.


With the upheaval of recent months, businesses up and down the UK have been forced to adapt virtually overnight. Just as millions of people adapted to working from home, businesses also found new ways to overcome these challenges, potentially changing the way we work forever. Whole sectors of the economy have struggled in the new circumstances – retail, hospitality and tourism have been particularly hard hit by the national lockdown.


Conversely, the pharmaceutical sector is naturally familiar with intense innovation. In fact, it provides a valuable blueprint for how to encourage innovation throughout the economy. The COVID-19 pandemic has seen the sector come together on a wide scale. The usual trade secrets and intellectual property have been more widely shared in recent months than ever before, with large parts of the sector driving towards the shared common goal of developing a vaccine for COVID-19. Whilst under immense pressure, many companies have also successfully digitised at short notice, allowing for fast tracking of clinical trial data sharing.


However, the UK’s pharmaceutical sector has been a driver of powerful innovation since long before the pandemic. To me, there are three major factors driving this long-running phenomenon.


Firstly, the sector is set up in a way that creates and protects value. Government schemes like R&D tax credits have played a significant role in encouraging innovation, with firms able to claim back significant amounts of free cash to offset their investments in R&D – an important benefit in an industry where any given research project stands only a slim chance of bringing a product to market.


Successive governments have recognised the importance of the pharmaceutical sector, setting out clear trajectories for investing in cutting edge discoveries. This longstanding support means that the UK now has the highest life science investment of any country in Europe. Investment in work on vaccines for previous outbreaks has now set up the sector well to fast-track developments of new vaccines for coronavirus. The work of the Jenner Institute (part of the University of Oxford) on a vaccine for Ebola has provided a launching pad for its work on a potential vaccine for COVID-19, currently being undertaken in partnership with AstraZeneca.


Secondly, the sector is highly active. Home to many of the world’s best universities, the UK is a natural hub for talented graduates. For the pharmaceutical sector, having access to highly talented PhD and Masters students is a significant boost compared with countries that rely more on importing talent. Recent boosts to apprenticeship training in vaccine manufacturing represent a further highly welcomed move as the sector ramps up vaccine development.


The support of the university system does not end there, however. It stimulates the pharmaceutical industry in other ways too, with many of the most successful firms beginning their lives as star-tups spun out of university research faculties. For example, Abcam has become one of the leading players in the sector due to its work on antibodies, having initially been spun out of a Cambridge genetics research institute. These firms can also benefit from the local wealth of knowledge around intellectual property and M&A too, driving further growth.


The network that drives the UK’s pharmaceutical sector also goes far beyond universities. With various clusters of technical, scientific, management, investment and industrial skills located across the UK, a network of science parks, industrial complexes and commercial centres are seeding commercial innovations from lab to market at a rate only beaten by the US. Indeed, a recent BioCity report spoke of ‘life science investment in a way only seen once a century’.


Thirdly, the sector has long been driven by a dynamic approach that encourages innovation. The supply chain in pharma is complex, but it has been able to adapt rapidly to the new circumstances of recent months. One aspect of the supply chain that has contributed to strong innovation is the relationship between the pharmaceutical sector and the clinical sector. The NHS provides the ideal infrastructure for the UK’s pharmaceutical sector to commercialise drugs, contributing to the sector’s strong international competitiveness.


The NHS also plays a key role in supporting clinical trials – for example, Birmingham’s hospitals are home to many of the UK’s leading clinical research institutions and have supported work on ground-breaking medicines. The diverse population of the West Midlands also makes it easier for researchers to recruit the right participants for these clinical trials, accelerating progress in this crucial area.


As we look to the future, both the government and the private sector must learn lessons from those industries that have weathered the crisis most effectively. It is no coincidence that the pharmaceutical sector has continued to perform strongly in recent months. The quality of support from government, the financial incentives for innovation and the effective interaction between the public and private sector – encompassing firms of all sizes and specialisms – have helped the sector become a significant driver of the UK’s economy. Crucially, the sector is also well-positioned to bring about the innovations that will be required to accelerate the end of the COVID crisis and get the country moving in full flow once again.