Growing medicines manufacturing in the UK

A Newmarket Strategy roundtable event, supported by Merit – November 2023


On Thursday 9 November 2023, Newmarket Strategy held a breakfast roundtable, bringing together leaders from across government and the life sciences sector to discuss how the UK can arrest the decline in medicines manufacturing and attract new investment to its shores.

The event was supported by Merit, a company who have been rapidly innovating their disruptive construction technology, particularly through partnerships with organisations across biotech manufacturing – such as Autolus, Moderna and the CGT Catapult. Merit have been driving for a concerted push from leaders across government and the life sciences to deliver initiatives that nourish this type of innovation, incentivise high-risk, high-reward investment, and counter the productivity stagnation that is being seen across the UK.

This document brings together the analysis and recommendations shared by the group, making recommendations for how government and industry leaders can make progress, as well as case studies of Merit’s work. It follows the recent work of the Medicines Manufacturing Industry Partnership (MMIP) which issued its report in June 2023.
UK medicines manufacturing

Medicines manufacturing is a keystone in the UK life sciences sector. The sector employs over 115,000 people across the UK, and UK medicines manufacturing sites generate over £35bn of turnover. Innovative new medicines like cell and gene and nucleic acid therapeutics are rapidly changing the manufacturing of pharmaceuticals and offer an opportunity for the UK to be a global leader. There is a potentially huge prize, with the opportunity for an estimated £15bn of new medicines manufacturing investment over the next decade.

However, in recent years there has been a decline in medicines manufacturing in the UK, which has struggled to keep pace with competitor nations like the US, Singapore, Ireland and France. Since 2009, UK production volumes have fallen by 29% and 7,000 jobs have been lost. Recent high-profile decisions for pharmaceutical companies to invest elsewhere (such as AstraZeneca’s $400m investment in a state-of-the-art manufacturing facility in Ireland) have further damaged the perception of the UK as being a location for such long-term, strategic investments.
Key challenges facing UK medicines manufacturing

The roundtable discussion highlighted the following key challenges:

1. The medicines manufacturing environment is increasingly competitive: The quantum of funding being made available by other nations has vastly increased and they have been more successful than the UK at attracting inward investment.

2. Many global leaders have a negative perception of the UK: A combination of uncertainty created by Brexit, increased trade barriers and recent political instability have all helped to create a perception that the UK is not open for business.

3. Current government procurement practices favour incumbent providers and are acting as a brake on innovation helping to stifle productivity: A risk averse approach in government procurement is preventing market disruptors from winning contracts and is imbedding stagnant and inefficient suppliers into major UK contracts.

4. Other competitor nations are reaping the awards of stable long-term industrial strategies: A fluctuating and inconsistent approach to government industrial strategy has made the UK unattractive to long-term investors.

Key recommendations:

  1. Government and industry need to work more closely together to promote and champion the UK’s unique strengths in medicines manufacturing.
  • Be bolder about celebrating success stories: The UK does have great success stories, with examples like Autolus’s new CAR-T Cell manufacturing facility in Stevenage and Moderna’s Innovation and Technology Centre in Harwell, Oxfordshire. However, government and industry bodies need to do more to promote these and showcase the UK’s unique strengths and capabilities.
  • Green targets can help to attract inward investment: The UK has some of the most ambitious green targets in the world. The government can do more to help promote these and show how the UK can support the pharmaceutical sector in achieving their own green ambitions.
  • Long-term consistent policy will show the UK is open for business: A strong R&D base, a high-skilled workforce, excellent transport links and a leading regulatory environment mean the UK is well-positioned to cultivate a larger medicines manufacturing industry. However, these need to be supported by long-term government strategies that offer the conditions of certainty which are essential to attract large-scale inward investment. 
  1. The Government needs to foster a pro-innovation environment to increase the UK’s global competitiveness.
  • The Government should seek to use its own buying power to support UK innovators: Decisions on the awarding of Government contracts is too heavily balanced toward value-for-money and competition. More weight should be given to supporting UK plc, which can increase value for the UK economy and enable the government to deliver more support to key sectors like medicines manufacturing.
  • A proportion of all government contracts should be awarded to innovators: Disruptors and innovation can play a key role in solving the productivity puzzle. Procurement practices should be reshaped to make it easier for new market entrants to win large government contracts.
  • The Government should reassess the current distribution of life sciences funding: UK Government funding is heavily focussed on R&D, with the government committed to record levels of investment. However, given that over 45% of Gross Value Added in the UK pharmaceutical sector is derived from medicines manufacturing, the benefits of directing funding further upstream should be evaluated.[i]
  • There needs to be cross-government action on uptake and adoption in the NHS: The UK’s slow adoption of innovative medicines is acting as a brake on inward investment, as the sector experiences stronger demand for innovative medicines elsewhere. There needs be consensus across the Treasury, DHSC and DSIT on the scale of the challenge and a concerted effort to accelerate the adoption of innovation in the NHS.

About Merit

Merit is a Northumberland-based offsite construction and digital manufacturing specialist providing hospital facilities, clean & dry rooms, and laboratories to a wide range of clients including healthcare, life sciences, battery technology, semiconductors, and aerospace. Services provided to the public and private sectors achieve the following:

  • A revolutionary product-based approach to construction through integrated platform designs and automated factory production systems.
  • Up to 90% of a facility is manufactured offsite (Pre-Manufactured Value UltraPOD 90% and FLEXI POD 82%)
  • Merit products are pre-designed and have been certified and licenced for use by a wide range of clients including Moderna, NHS, Newport Wafer Fab, Autolus etc.
  • Repeatable consultant design costs are significantly reduced as a large part of the project is pre-designed.
  • Merit has increased productivity by 71.9% 2016-22 and continues to improve.
  • 8% of turnover is spent annually on R&D – developing products and factory automation.
  • Project durations are typically a third of the time compared to traditional design and build programmes.

About Newmarket Strategy

Newmarket Strategy is a health and life sciences consultancy, which specialises in providing strategic advice and technical support to help the healthcare, life sciences and healthtech sectors. Our team of experts support our clients to shape policy, navigate regulatory systems, appraise investments and drive uptake of their innovative products and services.