Research and analysis

Life science competitiveness indicators 2022

Published 21 July 2022

Ministerial foreword

From:

• Lord Callanan, Parliamentary Under Secretary of State (Minister for Business, Energy and Corporate Responsibility)

• Lord Kamall, Parliamentary Under Secretary of State (Minister for Technology, Innovation and Life Sciences)

We are delighted to introduce the eighth annual life science competitiveness indicators report, a suite of metrics demonstrating the UK’s performance in the life sciences sector and our position in global rankings.

The UK has long been a powerful centre for science and research in life sciences. Investment in science and research has never been more important. The resulting innovations, and ensuring the NHS embraces them, have the potential to bring about transformative changes that will benefit UK patients and the public, and build on the successes we saw during the pandemic. In the current environment, it is vital that we use our collective ingenuity, drawing on expertise from academia, industry and those with lived experience to help tackle the healthcare challenges facing many in the UK and across the globe, such as mental health, addiction, and obesity. These are complex and multi-causal conditions, for which life sciences innovations will be an essential tool to solve.

We have collectively achieved much over the past year, such as:

• Launching our new UK-wide implementation plan for the future of clinical research delivery – setting out our approach to recovering the UK’s capacity to deliver research following the pandemic, and the actions that will be taken to deliver our vision of a digitally enabled and pro-innovation clinical research environment, with research delivery embedded within the NHS.

• Securing funding of up to £200m over three years to improve accessibility to and linkage of NHS and related healthcare data – supporting a wide range of ambitions across the Life Sciences Vision, the NHS Long Term Plan, and the Vision for Future of UK Clinical Research Delivery and Implementation Plan.

• Enabling this data funding to deliver on recommendations made in the Goldacre Review and Data Saves Lives Strategy, to develop an interoperable network of Trusted Research Environments to provide approved researchers with secure access to NHS data for life-saving research and support the shift to improved diagnosis of conditions, increasing population health and wellbeing.

• Launching the £200m Life Sciences Investment Programme to improve funding for growth-stage companies in the UK – and securing £800m for Life Sciences investment through the UK-UAE Sovereign Investment Partnership with Abu Dhabi’s Mubadala Investment Company.

• Supporting a raft of new manufacturing investments through the £60m Life Sciences Innovative Manufacturing Fund (LSIMF), launched in March this year – building on the success of its predecessor, the Medicines and Diagnostics Manufacturing Transformation Fund, which has already supported investments across the country including in: Wales, Brighton, Northern Ireland, Northumberland and Macclesfield.

However, monitoring is key to ensuring the UK continues to be internationally competitive. That is why we are delighted to publish this LSCI report, which empowers us to monitor the competitiveness of the UK life science sector against peer countries. These metrics also reflect the progress of ambitions, set out in the Life Sciences Vision, to maintain and grow investment in science and research in life sciences over the next decade. This report also includes a refreshed set of metrics based on stakeholder feedback to better measure the UK life science value chain.

The LSCIs present a view into the UK’s research and development (R&D) expenditure showing that the UK government’s budget for health research and development (R&D) was £2.7bn in 2020, accounting for 0.12% of GDP, behind only the USA and Japan. Industry also performed over £5bn of pharmaceutical R&D in 2020.

The embrace of innovation is fundamental to the long-term sustainability of the NHS and to delivering better outcomes for patients now, and in future. This year, for the first time, the LSCIs present an international comparison on availability of new medicines. This shows that England has made 68% of medicines available to patients for medicines launched between 2017 and 2020. Since then, NHS England have launched an Innovative Medicines Fund, with £680m ringfenced funding to support ever earlier access to new products.

The LSCIs also offer us an opportunity to examine where we would like to do better. For example, the LSCIs show that the UK took longer to set up clinical research than most comparator countries up to 2020. But the indicators also show that the introduction of combined review considerably reduces the length of time taken to approve clinical trials. From 2022, all UK trials will be reviewed through this process. The clinical research implementation plan also sets out how the MHRA will further develop combined reviews with the HRA and devolved administrations. This will streamline UK-wide processes allowing research to be set up at a faster pace within the NHS.

We have one of the most amenable business environments in the world, and our ambition is to capitalise on this and to make the UK the most attractive place in Europe and to build a dynamic environment to enable life sciences businesses to thrive in the UK. In creating an attractive business environment, we will need to provide a better system to support new and existing inward investors to invest into the UK. The LSCIs also show that the UK life science sector has secured a total of £7bn in equity financing in 2021, a greater than twelve-fold increase since 2012.

In the Vision and the government’s Drug Strategy we identified eight great healthcare challenges, where government, the NHS and the sector can work together to accelerate new products to market and improve patient outcomes.  The LSCIs are critical for measuring the elements of the life science ecosystem that are required to tackle the leading causes of morbidity and mortality in the UK.

This government is committed to continuing to deliver on the commitments set out in the Life Sciences Vision. This report enables us to assess our progress to date, and we are certain that next year’s publication will continue to demonstrate our success.

Introduction

The Life science competitiveness indicators (LSCIs) are a set of high-level indicators used to measure the performance of the UK’s life science sector by benchmarking the UK against comparator countries. The indicators are brought together from a range of different sources, including data already in the public domain, and commercially sourced data published for the first time via this report.

2022 publication updates

This is the eighth edition of the LSCIs. This year’s publication has undergone significant change since the publication of the previous report in 2021, following user consultation. The approach taken has been to meet user requirements by refining metrics or adding new ones, where data is available at an international level and of high enough quality to produce meaningful comparisons.

The changes include:

• A revised list of indicators. This includes new metrics, amendments, or replacements to existing ones

• Restructuring of the report to categorise metrics according to the UK’s life science ecosystem

• A revised reporting structure to accommodate html format and providing further context for the data presented

Further details on the metrics, including information on the changes compared to past reports, is available in the accompanying Life science competitiveness indicators 2022: user guide.

This year’s LSCIs also present an accompanying document on the UK’s Life science competitiveness indicators: life science ecosystem. The life science ecosystem is a set of interacting elements impacting the life science ‘value chain’, which comprises the activities carried out by the key actors in the sector to achieve the twin goals of improving UK health outcomes and achieving economic growth. The accompanying document sets out more details on the ecosystem and how the LSCIs measure the associated elements.

Where metrics have been replaced or amended and the data exists through a public source, all efforts have been made to direct users to the data source, should they still require access. For any data that was published exclusively as part of the LSCIs, the updated time series is contained in the report’s accompanying Life science competitiveness indicators 2022: data tables. It has not been possible in every instance to provide continuing data; further details on which metrics this is available for and where to find them is in the accompanying Life science competitiveness indicators 2022: user guide.

Other sources of UK Life Sciences data

The LSCIs form part of a suite of metrics to measure the strength of the UK Life Sciences sector in relation to comparator countries. Other data sources in this field:

• OLS publishes the annual Bioscience and Health Technology Sector Statistics (BaHTSS) on the UK bioscience and health technology sector, providing a detailed analysis of the life science sector in the UK.

• NICE publish an annual Innovation Scorecard. This reports the use of medicines and medical technologies in the NHS in England that have been positively appraised by NICE.

• NHS England publishes the AAC Scorecard. This is an interactive dashboard that monitors the impact of AAC programmes across a wide set of measures, including the uptake of specific supported innovations. To gain access to the AAC Scorecard please contact england.irlsanalytics@nhs.net

Feedback

The Office for Life Sciences (OLS) will continue to review the publication content on an annual basis to ensure it continuously meets evolving user needs.

We welcome user feedback on this report, including suggestions for changes you would like to see in future. Please provide any comments you may have by emailing analysis@officeforlifesciences.gov.uk.

Summary of the UK’s performance in the LSCIs

Table 1: overview of the UK’s ranking in the LSCI metrics

All rankings are based on unrounded values. Difference in ranking does not necessarily indicate a significant difference in performance for any given metric.

Ecosystem element	Metric	UK (or constituent country) rank
Research environment	Government budget allocations for health R&D as a percentage of GDP	3rd out of 15
Research environment	Gross domestic expenditure on medical and health sciences R&D performed by government as a percentage of GDP	6th out of 10
Research environment	Gross domestic expenditure on R&D performed by the private non-profit sector as a percentage of GDP	5th out of 10
Research environment	Gross domestic expenditure on medical and health sciences R&D performed by the higher education sector as a percentage of GDP	6th out of 10
Research environment	Gross domestic expenditure on pharmaceutical R&D performed by business enterprises (UK only) as a percentage of GDP	Not available
Research environment	Percentage share of patients recruited to a subset of commercial global studies	6th out of 10
Research environment	Median time from clinical trial application to a regulatory authority and the first patient receiving a first dose for a subset of commercial trials	7th out of 10
Research environment	Share of medical sciences academic citations	3rd out of 12
Research environment	Proportion of each country’s medical sciences publications which are amongst the most highly cited (top 1%) globally	1st out of 12
Research environment	Life science patent applications per thousand population	6th out of 13
Domestic market	Percentage of new medicines made available	England: 6th out of 13, Scotland: 10th out of 13
Domestic market	Median time to availability for new medicines	England: 6th out of 13, Scotland: 9th out of 13
Domestic market	Per capita uptake of new medicines – NICE approved (relative uptake against average comparator uptake 5 years after launch)	Not applicable
Domestic market	Number of CT scanners, MRI units and PET scanners per million population	16th out of 16
Domestic market	Number of CT, MRI and PET exams per thousand population	12th out of 13
Production environment	Number of people employed in manufacture of basic pharmaceuticals and pharmaceutical preparations	4th out of 12
Production environment	Number of people employed in manufacture of medical technology products	4th out of 12
Production environment	Gross value added for pharmaceutical manufacturing	5th out of 12
International collaboration	Global exports of pharmaceutical products	9th out of 20
International collaboration	Global exports of medical technology products	10th out of 20
International collaboration	Global imports of pharmaceutical products	10th out of 20
International collaboration	Global imports of medical technology products	7th out of 20
Investment environment	Life sciences inward foreign direct investment – projects	3rd out of 18
Investment environment	Life sciences inward foreign direct investment – estimated capital expenditure	2nd out of 18
Investment environment	Share of global life science initial public offerings	6th out of 24
Investment environment	Amount raised in global life science initial public offerings (where known)	5th out of 24
Investment environment	Equity finance raised by life science companies	3rd out of 15
Access to skilled labour	Percentage of graduates from tertiary education graduating from natural sciences, mathematics, and statistics programmes, both sexes	2nd out of 14

Executive summary of the UK’s performance in the LSCIs

Research environment

• Whilst the UK government has a high budget allocation for health research & development (R&D), coming behind only the USA and Japan, the UK generally places around the centre of the rankings for R&D performed by government, higher education and private non-profit sectors

• R&D performed by the 4 sectors (government, higher education, private non-profit, and business), as a percentage of gross domestic product (GDP), remained stable between 2014 and 2018 for the UK

• For clinical trials, the UK has a longer length of time between first application to a regulatory authority and the first patient receiving a first dose compared to most comparator countries. In the UK, the set-up and recruitment of patients takes longer than the approval process

• The UK recruits a similar number of patients to clinical trials as countries such as France and Canada, but substantially fewer than the USA

• Amongst comparator countries, the UK, Italy and France were the leaders in terms of producing high quality research in medical sciences publications in 2021

Domestic market

• Several comparator countries in Europe, such as Germany, the Netherlands and Switzerland, approved a greater number of innovative medicines and took a shorter time to do so compared to both England and Scotland

• The UK continued to have a lower level of uptake, per capita, of new medicines, 5 years after launch, compared to the average level for comparators; product usage values are not adjusted for other factors which are likely to influence uptake

• The UK has a substantially lower number of MRI units, CT and PET scanners and similarly a lower number of scans per capita than comparator countries

Production environment

• Employment in pharmaceutical and medical technology manufacturing in the UK is higher than most comparators, with the exception of Germany, France and Italy. UK employment in pharmaceutical manufacturing has risen substantially in recent years following a dip in 2016

• The UK’s GVA for pharmaceutical manufacturing was similarly higher than most comparators, but behind the USA, Switzerland, Germany and France

International collaboration

• The UK’s import and export values for pharmaceutical products are notably lower than the majority of comparator countries. Both imports and exports for pharmaceutical products declined in recent years

• Similarly, UK trade in medical technology products was substantially lower than that seen in most comparator countries, although both imports and exports have increased each year since 2016

Investment environment

• Amongst comparator countries, the UK ranked second behind the USA in terms of estimated life science inward foreign direct investment (FDI) capital expenditure in 2021

• The UK ranked behind only the USA and Germany in terms of the number of inward FDI projects

• The UK had the sixth highest number of life science initial public offerings (IPOs) and associated amount raised in 2021. The USA and China were the leaders in terms of both the count of IPOs and amount raised, and were substantially higher than all other comparator countries

• Similarly, the UK life science industry has seen increasing levels of equity finance raised since 2012, but companies in the USA and China raised substantially more

Access to skilled labour

• The UK ranked second behind India in terms of the proportion of graduates from tertiary education graduating from natural sciences, mathematics and statistics programmes (fields which are considered to be of relevance to the life science sector)

Research environment

Main points

The UK has a higher government budget for health research and development (R&D) as a proportion of GDP than most comparator countries at 0.12%. The UK ranked behind only the USA and Japan in 2020. However, the USA’s proportion was nearly double that of the UK at 0.23%.

For sectors performing R&D:

1. The UK government performs comparatively less medical and health sciences R&D than other countries

2. The UK higher education sector’s performance of medical and health sciences R&D results in a ranking in the middle of comparators

3. Similarly, the private non-profit sector’s performance on R&D results in a ranking in the middle of comparators

In the UK, the time between the first application to a regulatory authority and the first patient receiving a first dose for a subset of commercial trials is longer than in the majority of comparator countries, and has lengthened between 2018 and 2020. The UK placed seventh out of 10 comparators with a median time of 247 days in 2020. In the UK, the time taken to reach regulatory approval has consistently been a relatively small part of this timeline, whilst activities parallel to or post-regulatory approval (such as trial set-up and recruitment of patients) have generally tended to be longer in duration. Increases in the length of time were also seen in most comparator countries in 2020, which was likely influenced by the COVID-19 pandemic.

In 2020, the UK’s share of patients for these commercial clinical trials was 3.0%. This puts the UK sixth out of 10 comparator countries, although it should be noted that all other countries, except the USA, also recruited less than 5% of the clinical trial patients in the sample.

The UK accounts for a high share of medical science academic citations at 13.2% in 2020, behind only the USA and China. The UK also ranks first alongside Italy and France for the production of high-quality research in the field of medical sciences, with 2.4% of their medical sciences publications being amongst the top 1% highly cited publications globally.

The UK had 0.14 life science patent applications per thousand population in 2019, placing the UK sixth amongst 13 comparators.

Research and development (R&D)

R&D can be measured by the expenditure on R&D performed by an organisation, or the amount of R&D funded by the organisation. Funding received to perform R&D can come from the organisation itself, organisations within the same sector or a separate sector of the economy.

More information on the flows between R&D funded and performed in the UK can be found in the Office for National Statistics publication on Gross Domestic Expenditure on R&D, covering R&D across all industries in the UK.

The LSCIs measure the amount of R&D relevant to life sciences performed by government, higher education, private non-profit, and business sectors. However, it should be noted that the R&D figures presented here are not comprehensive of all life science R&D due to data availability. Government budget allocations are also included, as this has less of a time lag and can provide early insight into R&D performance for sectors highly reliant on government funding, such as higher education.

The UK government budget for health R&D has remained broadly consistent

Figure 1: Government budget allocations for health R&D as a percentage of GDP

Note: data from figure 1 can be found in table 1 of the accompanying Life science competitiveness indicators 2022: data tables

In 2020, the UK government’s budget for health R&D was £2.7bn, which equated to 0.12% as a percentage of GDP. This ranked the UK third out of all comparator countries, in terms of the proportion of GDP, behind only the USA and Japan. The UK’s budget allocation, as a percentage of GDP, was at a similar level to Japan, with the USA consistently having approximately double the budget of comparator countries, as a percentage of GDP.

Japan’s budget as a percentage of GDP has substantially increased, with a sharp rise in 2020 to 0.13% of GDP compared to 0.05% in 2019.

The UK government’s budget for health R&D as a percentage of GDP has remained broadly similar between 2014 and 2020.

The UK generally places around the centre of the rankings for R&D performed by government, higher education and private non-profit sectors

Figure 2: Gross domestic expenditure on medical and health sciences R&D performed by government and higher education sectors and all R&D for the private non-profit sector, as a percentage of GDP for 2018 or latest year available

Notes:

• data from figure 2 can be found in tables 2-4 of the accompanying Life science competitiveness indicators 2022: data tables

• figures for government and the higher education sectors relate to medical and health science R&D. For the private non-profit sector this relates to all R&D performed

• the data labels in the chart are rounded to 2 decimals places but the bars represent their unrounded value

• figures where R&D as a percentage of GDP rounds to 0 at 2 decimal places are not included in the visualisation

In 2018:

• UK government institutions performed £264m of medical and health sciences R&D, amounting to 0.01% of GDP. This is lower than most comparators, with countries such as Spain and Germany spending the equivalent of 0.07% and 0.04% of their GDP respectively on medical and health sciences R&D in 2018.

• The amount of R&D performed by the UK private non-profit sector was £823m, or 0.04% as a percentage of GDP, which placed the UK in the middle of the rankings of comparators. This measure includes all R&D by the private non-profit sector. In the UK, the private non-profit sector largely consists of registered charities and trusts that specialise mainly in health and medical research, but this is not necessarily the case in other countries, where private non-profit sector R&D figures may include a higher proportion of non-life science R&D.

• The UK higher education sector performed £2.1bn of medical and health sciences R&D, amounting to 0.1% of GDP. This puts the UK in the middle of the rankings with a lower percentage than countries such as the Netherlands and Germany but higher than countries such as Spain and Italy.

R&D as a share of GDP performed by these sectors remained broadly consistent in the UK between 2014 and 2018. More details of which organisations are included in these sectors for the UK can be found in the accompanying Life science competitiveness indicators 2022: user guide in the section on Research and Development.

Pharmaceutical R&D performed by industry has consistently accounted for around one fifth of all industry R&D performed

Figure 3: Pharmaceutical R&D and all other R&D performed by the business enterprise sector in the UK, current prices

Note: data from figure 3 can be found in table 5 of the accompanying Life science competitiveness indicators 2022: data tables

The business sector in the UK performed £5.0bn of pharmaceutical R&D in 2020, and this has mostly followed an upward trend since 2014, in current prices. Similarly, R&D performed on all other areas by the business sector has increased each year. As a result, pharmaceutical R&D was 30% higher in 2020 compared to 2014, and similarly R&D on all other areas was 36% higher.

As a result, pharmaceutical R&D has consistently accounted for around one fifth of R&D performed by industry between 2014 and 2020.

Pharmaceutical R&D performed by the business sector accounted for 0.23% of GDP in 2020 which is a modest increase from 0.21% in 2019.

This data is only presented for the UK whilst a suitable data source is found to allow appropriate international comparisons.

Clinical trials

Data on the following metrics is extracted from the Centre for Medicines Research (CMR) Global Clinical Performances Metrics, Clarivate:

• Percentage of patients recruited to a subset of commercial global studies (all trial phases)

• Median time between clinical trial application to a regulatory authority and the first patient receiving a first dose for commercial trials (all trial phases)

This includes data from 25 pharmaceutical companies that participated in data collection activities. As a result, this metric only includes commercially sponsored trials. This data also only considers interventional trials, where a medicine is tested in participants, and trials for novel medicines (newly launched medicines or recently launched for a new indication). The data considers all phases of trials. More details are available in the accompanying Life science competitiveness indicators 2022: user guide in the section on clinical trials.

The USA recruited over a quarter of patients in 2020 but its share has declined in recent years

Figure 4: Percentage share of patients recruited to a subset of commercial global studies for novel medicines (all trial phases)

Note: data from figure 4 can be found in table 6 of the accompanying Life science competitiveness indicators 2022: data tables

In 2020, the UK’s share of patients for a subset of commercial clinical trials for novel medicines was 3.0% (2,907 out of a total 98,055 patients). This puts the UK sixth out of 10 comparator countries, although it should be noted that all other countries, except the USA, also recruited less than 5% of the clinical trial patients in the sample in 2020.

The USA’s share of patients declined from a peak of 44.1% in 2014 to 25.5% in 2020. Although other comparator countries’ share of patients has fluctuated, their share has predominantly remained under 5% each year since 2012.

This metric only presents a subset of commercial trials to allow a standardised comparison between countries. For the UK this data relates to 83 clinical trials in 2020, the number of studies included for other countries and for past years is available in the accompanying data tables. The UK also recruits a substantial number of patients to non-commercial studies.

Data in table 2 from the National Institute of Health Research’s (NIHR) Clinical Research Network (CRN) shows how many patients were recruited to commercial interventional trials in the UK. The NIHR data does not include early phase trials in healthy volunteers.

Table 2: Number of interventional studies and number of patients recruited by commercial status in the UK

Year	2019/20	2020/21	2021/22
Number of patients recruited	201,821	166,780	467,851
Commercial studies	14,807	28,114	18,124
Non-commercial studies	187,014	138,666	449,727
Number of interventional studies	3,091	2,613	3,171
Commercial studies	1,291	1,091	1,393
Non-commercial studies	1,800	1,522	1,778

Time from application to first dose to first patient has been increasing in most countries between 2018 and 2020

Figure 5: Median time from clinical trial application to a regulatory authority and the first patient receiving a first dose for a subset of commercial trials for novel medicines (all trial phases)

Notes:

• data from figure 5 can be found in table 7 of the accompanying Life science competitiveness indicators 2022: data tables

• higher values equate to a longer time from application to first dose to first patient. Countries with lower values have a higher rank.

The time from clinical trial application to first patient first dose includes the time taken for:

• Regulatory approval

• Set-up including recruiting patients

In 2020, the median time in the UK between a clinical trial application being submitted to a regulator and the first dose to first patient was 247 days for a subset of commercial trials. The median time has been getting longer since 2018, when the median time was 222 days. The USA continues to have the shortest turnaround time with 155 days.

The median times in 2020 were likely impacted by the COVID-19 pandemic, when many countries pivoted research efforts to COVID-19 research from other indications.

Similarly, there has been an increase in time for most other comparator countries over the same period, with some countries such as France and Canada seeing steep increases in 2020 compared to 2019. As a result, the UK has moved from having the longest time in 2019 out of 10 comparators to ranking seventh in 2020.

For the UK this data relates to 79 clinical trials in 2020, the number of studies included for other countries and for past years is available in the accompanying data tables.

For the UK, clinical trials need to be approved by both the Medicines and Healthcare products Regulatory Agency (MHRA) and the Research Ethics Service (RES) supported by the Health Research Authority (HRA). As of 2022, all trial applications in the UK are subject to combined review from MHRA and HRA, however this will not be entirely reflected in the figures presented due to the data covering only the period to the end of 2020. Before 2022, applications could be initially submitted to either body, with the timelines for approval not necessarily being sequential or through the combined review process. The starting point for the UK takes the date for which body the applicant submitted to first if the trial was not reviewed through combined review.

Table 3 provides timelines for clinical trial approval from MHRA and HRA in the UK, and indicates the extent to which the median turnaround time can be attributed to regulatory approval, as opposed to the set-up of a clinical trial, including recruitment of patients. Data in table 3 is not directly comparable to the metric used for making international comparisons above (time from first application to first patient receiving a first dose). This is because table 3 includes all commercial Clinical Trials of an Investigational Medicinal Product (CTIMP) whereas data extracted from CMR only includes a subset of commercial trials for novel medicines.

The figures in table 3 show that combined review substantially shortens the length of time for clinical trial approval in the UK. These are not directly comparable to the length of time from first clinical trial application to a regulatory authority to first patient receiving a first dose and cannot be used to derive how much time is taken for approval compared to clinical trial set up and recruitment. However, as the data provided from HRA considers all commercial trials it can be inferred that the time to set up and recruit patients is longer than the time taken to approve trials.

Table 3: median number of days for commercial clinical trial approval in the UK by whether they were reviewed through combined review

Year	2018	2019	2020	2021
Standard CTIMPs for trials that were not reviewed through combined review	97	108	92	90
MHRA approval timeline for CTIMPs that were not reviewed through combined review	46	46	46	51
HRA approval timeline for CTIMPs that were not reviewed through combined review	94	101	92	78
CTIMPs that were reviewed through combined review	37	55	57	61

Notes:

• for standard CTIMPs the timeline is from first regulatory application to last regulatory approval. For combined review there is one application and one approval.

• individual regulator timelines, for MHRA and HRA, are not necessarily sequential and in some cases may overlap. They should not be combined to obtain an estimate of overall regulatory approval timings for CTIMPs.

• HRA approval includes approval from Research Ethics Committees (REC) and Administration of Radioactive Substances Advisory Committee (ARSAC).

All clinical trial data in this section refers to all trial phases combined. Further comparisons for the UK by trial phase are available through data reported by the Association of British Pharmaceutical Industry (ABPI) on their facts, figures and industry data on clinical trials.

Citations

The UK’s share of medical science citations has been consistent over the past decade

Figure 6: Percentage share of global medical sciences academic citations

Note: data from figure 6 can be found in table 8 of the accompanying Life science competitiveness indicators 2022: data tables

This metric shows the share of global medical sciences academic citations held by the UK and its comparator countries (other G7 countries as well as Brazil, China, India, Russia, and Republic of Korea). Citation counts can be used to indicate the total citation impact of a country’s medical sciences publications.

In 2021, the UK’s share of global medical sciences academic citation counts was 13.2%, ranking third amongst comparator countries behind the USA (34.4%) and China (18.0%). The UK’s share has been relatively consistent between 2011 and 2021.

The UK’s ranking fell from second to third in 2017 due to China’s share markedly increasing. China’s share increased from 6.2% in 2011 to 23.0% in 2020, but fell to 18.0% in 2021. This was mirrored by a declining trend in the USA’s share, which was 43.5% in 2011 and had decreased to 34.4% in 2021.

The UK, Italy and France had the highest proportion of their publications that were highly cited

Figure 7: proportion of medical science publications that are amongst the most cited (top 1%) globally

Note: data from figure 7 can be found in table 9 of the accompanying Life science competitiveness indicators 2022: data tables

This metric indicates the proportion of each country’s publication which are among the most-cited globally within the field of medical sciences. This is calculated by taking the number of medical sciences publications for each country which are amongst the top 1% most cited globally as a proportion of that country’s total scholarly output (total publication count).

The share of global citation count indicates the volume of citations each country’s publications receive; this metric is a useful indication of how influential each country’s medical sciences publications are.

In 2021, 2.4% of the UK’s medical sciences publications were in the top 1% of the most-cited medical sciences publications globally. The UK’s percentage was the highest amongst comparator countries, along with Italy and France (both also 2.4%).

The proportion of the UK’s medical science publications that were highly cited saw a decline from 2.9% in 2019, a trend which was also seen in most comparator countries.

Citations data tends to take about 3 years after the publication to stabilise, so it should be noted that citation data presented here for more recent years should be interpreted with caution and may differ from values published in future publications.

Patents

The UK’s count of life science patent applications has declined slightly since 2014

Figure 8: number of patents applications per thousand population

Notes:

• data from figure 8 can be found in table 10 of the accompanying Life science competitiveness indicators 2022: data tables

• it is known that substantial data is missing for China, and therefore the country’s figure is an underestimate.

This metric shows the number of life science patent applications (adjusted for population) made from each country in each year. Applications are assigned to the country in which the applicant (either a company, a university, or an individual) is registered or based.

Although this metric is generally a good proxy of where and when innovative life sciences activity took place, it is important to note that the applicant address may be the address of a company’s head office, or the inventor’s home address, rather than the actual location of where the invention took place. This means that, in some circumstances, patents may originate from research and development that took place in a different country to the ‘applicant country’.

Despite a declining trend since 2013, Switzerland remained top of the rankings in 2019, with over triple the number of life science patent applications per thousand population than any of the other countries included in this metric.

In 2019, the UK ranked sixth amongst comparator countries with 0.14 life science patent applications per thousand population, behind Switzerland (0.98), USA (0.29), Germany (0.19), Japan (0.15) and Canada (0.15).

The UK’s count of life science patent applications per thousand population has decreased modestly every year since 2014, with the most substantial year on year decrease occurring between 2018 and 2019, a relative decrease of 17%. All comparator countries also saw decreases in their count of life science patent applications per thousand population between 2018 and 2019 except for China, where there was a modest increase. The decrease in Japan and Canada was smaller than that seen in the UK, meaning that both countries moved up in the rankings and pushed the UK down from fourth in 2018 to sixth in 2019.

When measuring patenting activity, the Relative Specialisation Index (RSI) value can show the volume of patents filed in a given country in a specific field relative to overall patenting levels in that country.

An RSI value greater than zero indicates that a country has a higher share of a particular technology relative to its overall share of patent families. In 2019, the UK’s RSI value for life science patents was -0.69, indicating that disproportionately few life science patents are filed in the UK compared to other fields.

Domestic market

Main points

• 68% and 54% of new medicines were made available to patients between 2017 and 2020 in England and Scotland, respectively. Several European comparator countries, such as Germany, Italy and Austria made a higher percentage of new medicines available to patients than both England and Scotland. As a result, England and Scotland ranked sixth and tenth respectively for medicines that received marketing authorisation between 2017 and 2020.

• Similarly, a handful of comparator countries had a shorter time than both England and Scotland for availability of medicines to patients following marketing authorisation. The median length of time was 296 days in England and 384 days in Scotland, ranking them sixth and ninth, respectively, among comparator countries.

• The UK’s uptake ratio is a measure of uptake relative to the uptake of other comparator countries, adjusted for population. This is not adjusted for other factors such as disease prevalence or HTA recommended usage. For medicines launched between 2016-2020:

1. the UK’s uptake ratio of new medicines relative to comparator countries was 0.58 1 year after launch. This is broadly similar to medicines launched in 2015-2019.

2. 5 years after launch this rose to 0.81 but this is based on a small cohort of medicines. This compares to 0.60 for medicines launched in 2015-2019.

• The UK’s uptake ratio has been consistently below 1 for all launch cohorts since 2014, which means the UK has a lower adoption of new medicines in comparison to the average of comparator countries.

• The UK has a substantially lower number of MRI units, CT and PET scanners than most comparators with 16.5 scanners per million population and 174.5 scans performed per million population.

Access to pharmaceuticals

This report takes the analysis from the European Federation of Pharmaceutical Industries and Association (EFPIA) W.A.I.T Indicators. A medicine being available in this analysis in England and Scotland is defined as when the National Institute of Health and Care Excellence (NICE) and the Scottish Medicine Consortium (SMC), respectively, have issued a positive recommendation as part of their technology appraisal processes. If the medicine was not evaluated by NICE or SMC, IQVIA sales data was analysed to determine if the medicine is available. Medicines which are recommended for a restricted patient cohort relative to licenced indication (NICE’s optimised recommendation or SMC’s restricted recommendation) are considered in this analysis to be available. See NICE’s webpage on technology appraisal guidance and SMC’s How we decide webpage for more information on outcomes of their health technology assessments (HTA).

Of the constituent countries of the United Kingdom, only England and Scotland are included in these figures due to data availability. More details on the differences between HTA bodies and assessments in the 4 nations is available in the accompanying Life science competitiveness indicators 2022: user guide.

Figures are only available for European countries in the EFPIA W.A.I.T Indicators and comparator countries for the LSCIs have been chosen based on the European countries used in the analysis of uptake. See the section on ‘Uptake’ for more information.

The analysis is based on new medicines that received central marketing authorisation from the European Medicines Agency (EMA). New medicines refer to new active substances, this excludes medicines that have previously been appraised for a different indication with an exception for medicines for rare diseases. Under the centralised authorisation procedure, pharmaceutical companies submit a single marketing-authorisation application to EMA. Following the UK’s exit from the EU, from 2021 onwards, the MHRA are the sole regulator to approve medicines for marketing authorisation in the UK but for the period these figures relate to (up to 2020) the UK was included in the EMA central marketing authorisation process. Future reports will consider how to incorporate this change into the analysis. For more information see the access section of the accompanying Life science competitiveness indicators 2022: user guide.

The National Institute for Health and Care Excellence (NICE) adapted its priorities during the COVID-19 pandemic and paused appraisals of some new active substances. The rate of availability for England in the 2017-20 period may therefore be understated and trends over time should be treated with caution. Other countries included in the report may have faced similar impacts.

The rate of availability for new medicines varies between 92% and 42% across European comparator countries

Figure 9: Percentage of new medicines that received central marketing authorisation in Europe between 2017 and 2020 available to patients

Note: data from figure 9 can be found in table 11 of the accompanying Life science competitiveness indicators 2022: data tables

There were 160 new medicines in the analysis that received central marketing authorisation from the European Medicines Agency (EMA) between 2017 and 2020. 68% and 54% of these medicines were made available in England and Scotland, respectively. This has been remained broadly consistent with rates in the previous two time periods (2015 to 2018 and 2016 to 2019). Germany had the highest rate of availability with 92% of medicines made available between 2017 and 2020.

More information on the differences between how medicines are reimbursed across Europe can be found in the World Health Organisation’s (WHO) report on Medicines reimbursement policy in Europe.

Time to availability for new medicines varies between 52 and 468 days across European comparator countries

Figure 10: Median number of days between marketing authorisation and medicines being made available for medicines that received central marketing authorisation in Europe between 2017 and 2020

Notes:

• a higher median number of days indicates new medicines take longer to be available to patients in the respective country

• the marketing authorisation (MA) date is based on the EMA central marketing authorisation date except for Switzerland where local authorisation dates are used

• data from figure 10 can be found in table 12 of the accompanying Life science competitiveness indicators 2022: data tables

For medicines that received central marketing authorisation in Europe between 2017 and 2020, the median time from the marketing authorisation date to availability was 296 days in England and 384 days in Scotland.

For both England and Scotland, the median number of days was broadly similar to that of the previous two time periods (2015 to 2018 and 2016 to 2019).

More details on the definition for the length of time for medicines to become available can be found in the accompanying Life science competitiveness indicators 2022: user guide.

Amongst 13 European countries, England and Scotland respectively had the sixth and ninth shortest median times to availability for medicines that received central marketing authorisation in Europe between 2017 and 2020. Germany had a substantially lower time than all other European countries with a median of 52 days for medicines to be made available. In Germany, medicines are in principle available immediately after marketing authorisation with a health technology assessment running in parallel which can later restrict access.

The Cancer Drugs Fund (CDF) has been operating since 2016 in England to provide earlier access to patients for innovative treatments. In 2022, the Innovative Medicines Fund was launched to provide a similar early access option for non-cancer medicines, but this will not yet be reflected in the data presented here as only medicines receiving marketing authorisation up to the end of 2020 have been considered.

Uptake of medicines

The uptake ratio measures the relative adoption of new medicines in the UK in contrast to other countries. The uptake ratio is a measure of relative uptake in terms of days of therapy (DOT) per capita for new medicines recommended by NICE and first launched between 2014 and 2020. A ratio of the UK DOT per capita to the average DOT per capita for comparator countries is calculated for each medicine, and then the median of these ratios is taken to summarise how uptake in the UK compares to other countries – this value is hereafter referred to as the uptake ratio.

An uptake ratio of 1 means the median UK per capita consumption is equivalent to the average uptake per capita in the comparator countries.

An uptake ratio of less or more than 1 means the median UK per capita consumption is less or more respectively than the average uptake per capita in the comparator countries.

The uptake ratio accounts for individual country population size, but not for need (number of cases and HTA authorities’ recommended coverage), standard clinical practice or total medicine spend in each country. It also does not adjust for the impact of different marketing or launch strategies in different countries. These factors are likely to have a substantial impact on uptake figures.

In many cases there is no consensus as to what the ideal level of uptake should be. As such, high or low usage should not be interpreted as good or bad performance in itself. Nonetheless, the uptake ratio with respect to an international benchmark may be used to understand how UK adoption of innovative products changes in the years following their introduction.

This metric considers all 4 nations of the UK (England, Scotland, Wales and Northern Ireland), however it should be noted that Health Technology Assessment (HTA) process varies amongst the UK countries. For consistency, only NICE recommendations have been considered. Positive NICE guidance obligates mandatory funding in England and Wales, albeit with slightly different implementation timings, whilst Wales also has an independent HTA body – the All Wales Medicines Strategy Group (AWMSG). In Scotland, whilst NHS Boards are expected to follow SMC advice, the implementation of SMC-accepted medicines is subject to a local NHS Board decision regarding whether or not to include these in their formularies. Northern Ireland follow NICE guidance, but with some local interpretation.

Uptake in the UK continues to be below the average of comparators

Figure 11: UK uptake (days of therapy) of new medicines, per capita, as a ratio of comparator countries average

Notes:

• the figures only include medicines with a positive NICE recommendation

• each line refers to the cohort of medicines with a launch date in the labelled years. The x-axis refers to the number of years after launch for each medicine in the cohort.

• the figures are adjusted for population size between countries but not for other factors (such as disease prevalence and HTA authorities’ recommended coverage) which may influence differences in uptake

• data from figure 11 can be found in table 13 of the accompanying Life science competitiveness indicators 2022: data tables

Across all time periods, the UK has demonstrated a rise in uptake 5 years after launch when compared to 1 year after launch. However, it should be noted that the UK’s uptake ratio remains below 1, when compared to the average uptake per capita in the comparator countries.

For the most recent time period, 2016-2020, the uptake ratio 1 year after launch was 0.58 - this was similar to the previous period, 2015-2019, at 0.57. By comparison, 5 years after launch the uptake ratio was 0.81, up from 0.60 in the previous time period.

The comparator countries used to derive the uptake ratio are Australia, Austria, Belgium, Canada, Finland, France, Germany, Ireland, Italy, Japan, Netherlands, Spain, Switzerland, Sweden, USA.

Only 9 of the medicines receiving HTA approval between 2016-20 had sufficient time to accumulate a full 5 years of data, meaning that the 2016-20 uptake ratio for year 5 may not be representative of the full cohort of drugs, and should therefore be interpreted with caution. The table below shows the uptake ratios alongside the number of medicines included in the calculation.

Table 4: Uptake ratios for the UK and number of medicines included in the ratio calculation

Measure	Launch year	Year 1	Year 2	Year 3	Year 4	Year 5
Uptake ratio	2014-18	0.50	0.53	0.59	0.72	0.72
Uptake ratio	2015-19	0.57	0.61	0.57	0.63	0.60
Uptake ratio	2016-20	0.58	0.64	0.57	0.80	0.81
Number of medicines in the analysis	2014-18	68	65	60	41	28
Number of medicines in the analysis	2015-19	75	69	54	34	22
Number of medicines in the analysis	2016-20	68	55	40	20	9

This report does not rank countries by their uptake of medicines due to the uncertainty around the ideal level of uptake for each individual medicine. This measure does not make inferences on what the UK’s ratio should ideally be but exists to provide information on how the UK is utilising new medicines compared to peers and how that is changing over time. The UK’s uptake position will also differ across different classes of medicines.

Availability and utilisation of diagnostic technologies

The UK had the lowest number of MRI units, CT and PET scanners per million population amongst comparator countries

Figure 12: Number of MRI units, CT and PET scanners per million population, 2019 (or nearest year)

Notes:

• data from figure 12 can be found in table 14 of the accompanying Life science competitiveness indicators 2022: data tables

• for Japan 2019 data is not available so 2017 data has been used.

• for Australia data only includes equipment eligible for public reimbursement.

• for Germany 2019 data is not available so 2018 data has been used.

• data for Sweden and United Kingdom exclude equipment outside hospitals. Switzerland’s MRI units and PET scanners data also excludes equipment outside hospitals.

This metric gives an indication of the differing levels of availability in the UK and comparator countries for three diagnostic technologies: computed tomography (CT), magnetic resonance imaging (MRI) and positron emission tomography (PET).

Whilst these technologies have an important function in medical diagnosis, it is important to note that there is no general international benchmark for the ideal number of CT scanners, MRI units or PET scanners. Having too few may have implications on patient access/waiting times, but having too many may mean that money is being spent unnecessarily with little or no benefit to patients.

The UK’s count of diagnostic technologies per million population have been presented alongside data for 15 comparator countries (the same 15 as used in the ‘uptake of medicines’ metric, see the section on uptake). Comparisons are drawn between countries based on their 2019 data (or nearest year, if 2019 data is not available).

For the combined number of CT scanners, MRI units and PET scanners, the UK had the lowest number per million population at 16.5 compared to all comparators. Japan has a substantially higher combined number compared to all comparators at 171.3.

Amongst comparator countries, Japan had by far the highest number of CT scanners and MRI units per million population (111.5 and 55.2 respectively), and ranked second for PET scanners (4.6). The USA ranked first for PET scanners (5.5), second for MRI units (40.4), and third for CT scanners (44.9).

The UK had the lowest number of CT scanners (8.8), MRI units (7.4), and PET scanners (0.4) per million population amongst comparator countries.

The need for investment and reform in diagnostics in England was recognised in the NHS Long Term Plan, and since then there has been a nationwide effort to increase efficiency and reduce waiting times for diagnostic services. This has included a push to enable more diagnostic exams to take place at Community Diagnostic Centres (CDCs), thereby reducing pressure on hospitals, providing quicker access to tests and greater convenience to patients. In October 2021, the UK government announced £2.3bn capital investment over three years to transform the model for diagnostic services, including by delivering up to 160 Community Diagnostic Centres (CDCs) across the country by 2025, 90 of which are open already. These include 22 smaller spoke sites across England in a range of settings from local shopping centres to football stadiums The aim is to provide around 2.8 million tests during 2022-23.

It is important to note that UK data includes only diagnostic equipment in hospitals, and therefore CT scanners, MRI units and PET scanners in CDCs will not necessarily be captured.

The UK performed a comparatively low number of diagnostic exams

Figure 13: number of diagnostic exams per 1,000 population, 2019 (or nearest year)

• data from figure 13 can be found in table 15 of the accompanying Life science competitiveness indicators 2022: data tables

• for Germany 2019 data is not available so 2018 data has been used.

• for Switzerland and the UK exams conducted outside of hospitals are not included.

• for Australia exams conducted on public patients are not included.

• for the Netherlands privately funded exams are not included.

This metric demonstrates the varying levels of diagnostic technology utilisation in the UK and comparator countries.

The UK’s count of diagnostic exams per 1,000 population is presented alongside that of 12 comparator countries – this is a subset of the 15 countries used for the international comparison of diagnostic technology equipment availability, as data for Japan, Sweden and Ireland was not available. Comparisons between countries are drawn based on data for 2019, or the latest available year if 2019 data is not available.

For the combined number of CT, MRI and PET exams, the UK ranked 12th amongst 13 comparator countries, with 174.5 exams per 1,000 population. This was less than half the number of exams per 1,000 population in the USA (413.2) and Austria (349.1), who ranked first and second respectively.

Amongst comparator countries, the USA ranked first for the number of CT exams per 1,000 population (278.5), third for MRI exams (128.0), and third for PET exams (6.7). Austria had the highest number of MRI exams per 1,000 population (148.0), and Belgium was first for PET exams (10.1).

Since 2012, the UK’s overall number of CT, MRI and PET exams per 1,000 population has increased by 62%, from 107.8 in 2012 to 174.5 in 2019. The majority of this was due to the increase in CT scans performed, which increased by 65% from 62.6 exams per 1,000 population in 2012 to 103.3 in 2019.

Across other countries there has been a general upward trend in the use of diagnostic technologies over time, but the effects of the COVID-19 pandemic in cancelling/delaying diagnostic exams can already be seen in the countries for which 2020 data is available, although please be aware that 2020 data is not yet available for the UK. This can be seen in some countries where 2020 data is available, for example, the number of CT exams per 1,000 population fell by 21% in the USA and 33% in Finland in 2020 compared to 2019. Similarly, whilst the number of MRI exams decreased by 36% in the USA and 22% in Finland in the same time period.

Production environment

Main points

• Employment in pharmaceutical manufacturing in the UK has been increasing since 2016. As a result the UK had the fourth highest level of employment in 2019 at 56,500, which was a substantial increase from 32,200 in 2016 (a relative increase of 76%)

• Employment in medical technology manufacturing was at 43,000 in 2020. The UK has consistently ranked fourth out of 12 comparators since 2010.

• The UK’s GVA for pharmaceutical manufacturing has also been broadly consistent since 2016 and has consistently ranked fifth out of 12 comparators. The USA’s GVA for pharmaceutical manufacturing has been substantially higher than all other comparator countries each year, and in 2019 the USA’s GVA value ($143.2bn) was over triple that of Switzerland ($47.5bn), which ranked second.

Manufacturing employment

UK employment in pharmaceutical manufacturing has been increasing but remains lower than several competitors

Figure 14: Number of people employed in manufacture of basic pharmaceutical products and pharmaceutical preparations

Notes:

• UK data for 2020 is unavailable as ONS were unable to publish this figure for disclosure reasons through their UK employment estimates by enterprise industry

• data from figure 14 can be found in table 16 of the accompanying Life science competitiveness indicators 2022: data tables

The UK has seen an increase in pharmaceutical manufacturing employment between 2016 and 2019 with employment of 32,200 in 2016 compared to 56,500 in 2019, a relative increase of 76%. This has resulted in the UK overtaking Spain and Switzerland to have the fourth highest employment in both 2018 and 2019.

Germany, France and Italy all have higher employment than the UK for the most recent data available (2020 for Germany and Italy, 2019 for the UK and 2017 for France). Germany has a substantially higher level of pharmaceutical manufacturing employment than comparator countries, with their 2019 employment figure being over three times that of the UK.

Figures presented only include employment in enterprises whose economic activity is classed as manufacture of basic pharmaceuticals and pharmaceutical products and will not consider all persons working in pharmaceutical manufacturing. Please see the accompanying Life science competitiveness indicators 2022: user guide for more details.

Employment in medical technology has been stable in the UK

Figure 15: Number of people employed in manufacture of medical technology products

Note: data from figure 15 can be found in table 17 of the accompanying Life science competitiveness indicators 2022: data tables

Employment in medical technology in the UK was 43,000 in 2020 with employment fluctuating between 2015 and 2020 with no clear trend. The UK has consistently ranked fourth amongst 12 comparators since 2010. Employment in 2020 in the UK was 14% lower compared to the peak seen of 49,700 in 2008. Similar to pharmaceutical manufacturing, Germany, France and Italy all continue to have substantially higher employment than the UK. Germany has substantially higher employment than all other comparators with employment being nearly 3 times higher than the next nearest comparator, Italy.

Figures presented only include employment in enterprises whose economic activity is classed as manufacture of irradiation, electromedical and electrotherapeutic equipment and manufacture of medical and dental instruments and supplies. Therefore, this will not consider all persons working in medical technology manufacturing. Please see the Life science competitiveness indicators 2022: user guide for more details on methodology.

Gross value added (GVA) for pharmaceutical manufacturing

The UK’s pharmaceutical manufacturing GVA has remained stable since 2016

Figure 16: GVA for pharmaceutical manufacturing, constant prices, base year 2015 ($m)

Note: data from figure 16 can be found in table 18 of the accompanying Life science competitiveness indicators 2022: data tables

GVA measures the contribution to the economy that an industry makes. GVA is calculated as either the value of outputs from production minus the value of the inputs used, or revenue from pharmaceuticals minus the costs of production.

The UK’s GVA for pharmaceutical manufacturing was $14.0bn in 2019 and this has been broadly similar each year since 2016. The USA has a substantially higher GVA for pharmaceutical manufacturing than all comparators at $143.2bn in 2019, with 3 times the value of the next highest comparator, Switzerland.

The UK has consistently ranked in fifth place out of 12 comparators between 2016 and 2019.

International collaboration

Main points

• UK exports and imports of pharmaceutical products in 2020 were valued at $25.9bn and $26.8bn respectively. These values were notably lower than the majority of comparator countries, with the UK ranking ninth for exports and tenth for imports.

• The value of both exports and imports for pharmaceutical products has seen a decline year on year since 2016 and 2015, respectively, in contrast with a general upward trend seen in most comparator countries.

• UK exports and imports of medical technology products in 2020 were valued at $4.7bn and $6.8bn respectively. These values were also substantially lower than that seen in most comparator countries, with the UK ranking tenth for exports and seventh for imports

• Both imports and exports of medical technology products have increased in each consecutive year since 2017.

• The global impact of the coronavirus (COVID-19) pandemic, combined with uncertainty surrounding the effect of EU exit contributed to increased volatility in UK trade in goods across 2020. It is challenging to disentangle the driving factors and difficult to assess the extent to which trade movements reflect short-term trade disruption, or longer-term supply chain adjustments.

Export and imports of pharmaceuticals and medical technology products

The value of the UK’s export of pharmaceutical products decreased for a fifth consecutive year

Figure 17: value ($m) of global exports of pharmaceutical products

Notes:

• data from figure 17 can be found in table 19 of the accompanying Life science competitiveness indicators 2022: data tables

• data for Switzerland includes Liechtenstein.

• data for China includes Hong Kong and Macau

In 2020, UK exports of pharmaceutical products were valued at $25.9bn, a decrease of $2.6bn from $28.5bn in 2019. This was the fifth consecutive year of decreasing pharmaceutical product exports for the UK, with the export value by 2020 being 29% lower than the peak of $36.7bn in 2015.

The UK ranked ninth amongst comparator countries for exports of pharmaceutical products in 2020. Germany and Switzerland have consistently been the top two exporters in recent years, and both have seen relative increases of over 30% since 2015.

The value of pharmaceutical exports from Ireland increased each year between 2016 and 2020, rising from $33.3bn to $66.2bn in 2020, a relative increase of 99%. As a result, Ireland overtook the USA to occupy third place amongst the selection of comparator countries.

The value of UK exports of medical technology products increased modestly over each of the last 4 years, following a decline in 2016

Figure 18: value ($m) of global exports of medical technology products

Notes:

• data from figure 18 can be found in table 20 of the accompanying Life science competitiveness indicators 2022: data tables

• data for Switzerland includes Liechtenstein.

• data for China includes Hong Kong and Macau

The value of UK exports of medical technology products in 2020 was $4.7bn, an increase of $0.1bn (3%) since 2019. The UK saw a small decrease in the value of medical technology exports in 2016 and has experienced modest, but consistent, growth since then.

In 2020, the UK ranked tenth amongst comparator countries in terms of value of medical technology exports. The USA and Germany have consistently been the top exporters of medical technology products in recent years, and despite a $1.5bn decrease in exports since 2019 the USA remains at the top of the rankings with a total of $35.1bn in 2020.

China saw the largest absolute and relative growth in export value between 2019 and 2020, increasing by $5.5bn (relative increase of 35%) from $15.8bn in 2019 to $21.3bn in 2020.

The value of UK imports of pharmaceutical products in 2020 was over 20% lower than the peak in 2014

Figure 19: value ($m) of global imports of pharmaceutical products

Notes:

• data from figure 19 can be found in table 21 of the accompanying Life science competitiveness indicators 2022: data tables

• data for Switzerland includes Liechtenstein.

• data for China includes Hong Kong and Macau

In 2020, the value of UK imports of pharmaceutical products was $26.8bn, placing the UK tenth amongst the selection of comparator countries. This represents a decrease of $2.0bn since 2019, and a decrease of $8.0bn from $34.7bn in 2014.

The UK had a pharmaceutical products trade deficit of $0.8bn in 2020 (meaning that UK imports exceeded UK exports by $0.8bn), widening from a smaller deficit of $0.2bn in 2019. The UK has had a trade deficit in pharmaceutical products every year since 2015 (when there was a surplus of $2.1bn).

The countries which saw the largest absolute growth in imports between 2019 and 2020 were the USA and Germany, increasing by $11.2bn and $8.0bn respectively.

The value of UK imports of medical technology products increased every year since 2016, but not substantially enough to alter the UK’s ranking amongst comparator countries

Figure 20: value ($m) of global imports of medical technology products

Notes:

• data from figure 20 can be found in table 22 of the accompanying Life science competitiveness indicators 2022: data tables

• data for Switzerland includes Liechtenstein.

• data for China includes Hong Kong and Macau

The value of UK imports of medical technology products in 2020 was $6.8bn, an increase of $1.1bn (19%) since 2019. UK medical technology product imports have been increasing modestly every year since 2016, and the value of imports in 2020 was the highest it has been for the past 10 years.

In 2020, the UK ranked seventh amongst comparator countries for the value of medical technology products imports. The UK has remained in the same position in the rankings for each of the 10 years prior to 2020.

The USA has a substantially higher value for medical technology imports than all other comparators. In 2020, the USA’s imports were valued at $38.4bn, over double that of the comparator country with the second highest value, China whose exports were valued at $17.0bn.

Investment environment

Main points

• The value of estimated inward life sciences foreign direct investment (FDI) in the UK was £1.9bn in 2021, coming behind only the USA in terms of value. 2021 marked a second year of substantial increase in FDI in the UK since 2019 when the value was £574m

• Inward FDI is highly volatile year-on-year and the UK’s ranking has fluctuated over the past 10 years

• Initial Public Offerings (IPO) from the listing of life science companies in the UK raised £751m in 2021, ranking the UK fifth amongst comparator countries. This was substantially less than the amount raised in IPOs in the USA and China, with IPOs raising £15.9bn and £11.7bn respectively.

• The UK life science industry raised £7.0bn in equity finance in 2021, this has substantially increased compared to 2012 when £0.5bn was raised, a twelvefold increase. In 2021, the UK life science industry was placed third compared to comparators in terms of equity raised, behind only the USA and China.

Foreign direct investment (FDI)

Inward foreign direct investment (FDI) is an investment from a foreign investor into an enterprise in a different country. The entity then becomes an affiliate enterprise, which is either a subsidiary, branch, or an affiliate company of the parent company – the foreign investor. In practical terms, a foreign company can either set up a version of itself in the country, or can acquire/merge with an existing company.

The FDI data in this report however only includes situations where a foreign company has set up a new entity in the UK and doesn’t include mergers or acquisitions. The data also only includes publicly available data on FDI projects and therefore underestimates global FDI. More information can be found in the accompanying Life science competitiveness indicators 2022: user guide.

This indicator is based on fDi Markets data available at the industry Cluster level definition for “Life Sciences”, which includes projects in pharmaceuticals, biotechnology, medical devices as well as some projects in adjacent sectors such as healthcare, software and IT, business services and various other industries where fDi Markets has tagged these projects as life sciences.

The UK’s ranking has fluctuated but there has been a substantial rise in estimated life science FDI value since 2019 in the UK

Figure 21: life science inward foreign direct investment – estimated capital expenditure (£m)

Note: data from figure 21 can be found in table 24 of the accompanying Life science competitiveness indicators 2022: data tables

The value of FDI comes from capital expenditure collected from fDi markets data. Some projects do not have a known value for capital expenditure and this is estimated by fDi markets.

In 2021 the value of estimated inward FDI into the UK was at £1.9bn, which was second only to the USA. The USA continues to have a substantially higher estimated value of FDI than all other comparators with FDI of £6.5bn in 2021.

This data uses the fDi markets definition of ‘life sciences’ and as a result some projects included do not necessarily align with the definition of life sciences considered in the Office for Life Sciences official statistics on Bioscience and Health Technology Sector Statistics (BaHTSS). In 2021, there was a substantial investment into the UK that would be considered healthcare and outside of the scope of the BaHTSS definition of life sciences. Despite this, the fDi data provides a consistent definition across countries to allow for international comparisons.

The value of estimated inward FDI in 2021 was generated from 49 projects in the UK compared to 171 in the USA. Germany had a higher number of inward FDI projects at 94 but the overall value for these was less than the UK’s at £930m.

Equity finance raised by industry

Industry investment in this report refers to the amount of equity capital raised by the issuing of new shares by life science companies. The amount includes equity raises by private and publicly listed companies that has been publicly disclosed (private companies sometimes do not always disclose capital raises). One type of equity financing is Initial Public Offerings (IPO) which are also reported on in the section on Initial Public Offerings.

Equity finance raised by the UK life science industry has risen but industry in the USA and China raised substantially more

Figure 22: equity finance raised by life science companies, (£m, currency translations at historic exchange rates)

Notes:

• data from figure 22 can be found in table 27 of the accompanying Life science competitiveness indicators 2022: data tables

• figures for China include Hong Kong

Equity finance raised by the UK life science industry reached £7.0bn in 2021 which places the UK third compared to comparator countries, behind only the life science industry in the USA and China.

The life science sector in the USA and China raised substantially higher equity finance compared to all other comparators in 2021 at £98.5bn and £38.2bn.

The UK has mostly seen an increasing trend in equity finance raised over time, with the equity finance raised in 2021 (£7.0bn) over 12 times the amount raised in 2012 (£0.5bn). The exception to this was in 2017 where there was a 9% decrease compared to 2016.

Initial public offerings

An initial public offering (IPO) describes the act of a company offering their stock on a public stock exchange for the first time. An IPO allows a company to raise capital from public-market investors and enables its shares to be trading after the listing. A publicly listed company is more likely to increase its activities in the country where it is listed.

China and the USA raise substantially more through IPOs compared to comparators since 2017

Figure 23: Amount raised (where known) in life science Initial Public Offerings (IPOs) (£m, currency translations at historic exchange rates)

Notes:

• data from figure 23 can be found in table 26 of the accompanying Life science competitiveness indicators 2022: data tables

• figures for China include Hong Kong

The value of an IPO is determined by the amount of money it raises, which generally reflects the valuation of the company, and its growth prospects.

In 2021, UK IPOs in life sciences raised £751m from 11 IPOs, placing the UK fifth amongst comparator countries in terms of amount raised. This is an increase on the £133m raised from 5 IPOs in 2020, although it should be noted that there is extreme volatility in these figures year-to-year.

Despite the fact that the USA’s amount raised from life science IPOs fell in 2021 compared to 2020, the USA has remained first amongst comparator countries since 2017. The USA and China have consistently raised the highest amounts from life science IPOs over the last 10 years, with their lead widening considerably in recent years. The USA and China had 150 and 76 IPOs, respectively, which accounted for 64% of all life sciences IPOs in 2021.

Access to skilled labour

Main points

• In 2019, 13.4% of UK graduates from tertiary education graduated from natural sciences, mathematics, and statistics programmes – this was the second highest proportion amongst comparator countries, behind only India.

The UK had the second highest number of graduates behind India

Figure 24: Percentage of graduates from tertiary education graduating from natural sciences, mathematics, and statistics programmes, both sexes (%)

Data from figure 24 can be found in table 28 of the accompanying Life science competitiveness indicators 2022: data tables

Tertiary education comprises undergraduate degrees (or equivalent) and above - this metric shows the percentage of graduates from tertiary education graduating from natural sciences, mathematics and statistics programmes.

UNESCO data for 2020 is not available for all countries (just India amongst comparator countries), so rankings have been made using the most recent year where a country’s data is available. The UK ranked second amongst comparator countries, with around 13.4% of graduates from tertiary education graduating from natural sciences, mathematics, and statistics programmes in 2019.

Despite seeing a slight decrease since 2019, India remained at the top of the rankings (15.2% in 2020).

In addition to the number of graduates, the number of life science apprenticeships started each year in the UK can be a measure of the sector’s skills base. In the financial year 2020-21, the number of life science apprenticeships started was 1,100, 27% of which were level 6 or 7 (approximately equivalent to bachelor’s or master’s degree). This was a slight decrease on 2018-19, when there were 1,180 starts on life science apprenticeships in the UK. The proportion of life science apprenticeship starts that were level 6 or 7 has increased for each of the past 4 years.

The full time series on life science apprenticeships started between 2016/17 and 2020/21 in the UK can be found in this report’s accompanying Life science competitiveness indicators 2022: data tables. Details on the data source used and the selection of apprenticeship types to represent ‘life sciences’ can be found in the accompanying Life science competitiveness indicators 2022: user guide.

Annex A: Statistics on pharmaceutical expenditure

Pharmaceutical expenditure is not currently a part of the LSCI list of indicators due to ongoing considerations on how to best measure the UK’s net spend on pharmaceuticals in a way that is comparable to other countries.

How pharmaceutical expenditure influences the goals of improving health outcomes and economic growth (recognising that spend on pharmaceuticals may displace other healthcare provision and jobs in the NHS and supply chain), has not been evaluated as part of this report.

Monitoring pharmaceutical expenditure can also be useful context for understanding how much value for money countries are getting for their spend. This should be looked at within the context of uptake and access to medicines.

In the UK, the voluntary scheme for branded medicines pricing and access (VPAS) is a non-contractual voluntary agreement between the Department of Health and Social Care (DHSC) and the Association of the British Pharmaceutical Industry (ABPI). The Voluntary Scheme has two parts:

• first, it sets out a range of measures for England, unless otherwise stated, to support innovation and better patient outcomes through improved access to the most transformative and cost-effective medicines; and

• second, it sets out a UK wide affordability mechanism under which Scheme Members make a financial contribution to the Department for sales of Branded Health Service Medicines above the agreed allowable growth rate.

For more information, please see the DHSC page on Voluntary scheme for branded medicines and prices.

Monitoring pharmaceutical expenditure can also provide evidence behind the objectives of the scheme, which are to:

• improve patient access to medicines by getting the best value and most effective medicines into use more quickly

• keep the branded medicine bill affordable for the NHS through a cap in growth of branded sales

• support innovation and a successful life sciences industry in the UK

Publicly available sources on pharmaceutical expenditure

International sources

Various sources in the public domain attempt to quantify expenditure on pharmaceuticals at an international level, including for the UK:

• OECD’s pharmaceutical spending as a percentage of healthcare spending

• IQVIA’s report on Drug Expenditure Dynamics 1995 – 2020

The OECD statistics only include expenditure on retail pharmaceuticals (i.e. community pharmacies), including prescription and over the counter medicines. Medicines consumed in hospitals and other healthcare settings are excluded. Final expenditure on pharmaceuticals includes wholesale and retail margins and value-added tax, where applicable. Total pharmaceutical spending refers in most countries to “net” spending, i.e. adjusted for possible rebates payable by manufacturers, wholesalers or pharmacies. The OECD statistics are collected from countries in accordance with the framework described in A System of Health Accounts.

IQVIA’s report includes estimated spend for pharmaceuticals in both hospitals and other health care settings in addition to retail pharmacy.

IQVIA’s data source for the UK is based on the Department of Health and Social Care (DHSC) and Association of British Pharmaceutical Industry (ABPI)’s joint Waterfall Analysis of UK medicine sales 2018-19. This analysis estimates the residual between:

• branded medicines sales at list price (IQVIA data) for medicines supplied to the NHS across the UK

• sales of branded medicines net of all discounts and distribution costs, but not including the payment made by industry through the VPAS or Statutory Scheme (SS) in 2019. The net sales data comes directly from VPAS company returns or adjusted IQVIA parallel import data, and will not include VAT, centrally procured vaccine sales (which are excluded from VPAS) or distribution and supply chain elements.

The ‘discount/residual’ is the difference between spend at list price and net sales revenues accruing to companies. This difference can be accounted for by distribution costs, pharmacy margins, and discounts off list price; more information is available in the Waterfall Analysis.

The IQVIA analysis takes the sales of branded medicines net of all discounts and the payments made by industry through the VPAS or Statutory Scheme (SS). IQVIA additionally add data for over-the-counter medicines to this total from their data. True net NHS spend is likely to include a proportion of the discount/residual amount, but this is not quantified in the waterfall model. These figures therefore do not account for the additional discount/residual and are likely to understate net spend by the NHS.

IQVIA’s methodology differs for other countries and is summarised in the table on page 35 of the report.

Domestic sources

In addition, the NHS Business Service Authority publish official statistics for England on the Prescribing Costs in Hospitals and the Community. Prescribing Costs in Hospitals and the Community (PCHC) shows the actual costs paid for drugs, dressing, appliances, and medical devices which have been issued and used in NHS hospitals in England. This is alongside the cost for the same classes of items that have been issued in other settings in England. This includes:

• prescriptions issued by GP practices and community prescribers in England that have been dispensed in the community in the UK (excl. Northern Ireland)

• prescriptions issued by Hospitals in England that have been dispensed in the community in the UK (excl. Northern Ireland)

• prescriptions issued by dental practitioners that have been dispensed in the community in the UK (excl. Northern Ireland)

• medicines issued in hospitals in England that have been dispensed via the hospital pharmacy, homecare companies and outsourced out-patient pharmacy partnerships

but excludes:

• Prescriptions issued through Justice and Armed Services health services in England commissioned by NHSEI but not dispensed in the community, this covers pharmacy, appliance, Dispensing Doctors (DD) and Personally Administered Items (PADM).

• Any medicines issued in hospital in England but not managed via the hospital pharmacy service.

Information on how this data is collected can be found on NHSBSA’s accompanying methodology note.