Here is a bizarre outcome from Donald Trump’s State Visit: Britain’s leading-edge big pharma companies AstraZeneca and GSK are pledging £59billion of investment in the US over the next five years. Spending in Blighty is on hold.
The switch of focus reflects the fragmentation of global trade provoked by Russia’s war on Ukraine and Trump’s tariff mayhem.
Big pharma is doubling down on its biggest markets. GSK earns more than 50 per cent of its income in the US. Astra views the US and China as the best opportunities and Britain, where it earns less than 2 per cent of revenues, as less important.
This despite the funds it pours into research labs in Britain’s universities such as Cambridge, Oxford and York.
Anger with Health Secretary Wes Streeting and the Government is palpable. A published pharma strategy is no more than hot air. Now that Trump has left, medicine makers hope talks on the rebate on drugs sold to the NHS, under the voluntary scheme for branded medicines pricing, access and growth, can resume.
Originally, funds raised were to be recycled into innovation – but most of the income vanishes into the NHS void. The 27 per cent rebate demanded by Streeting, up from 15 per cent, is regarded as unacceptable.
Bizarre outcome: Donald Trump’s visit to Britain has seen AstraZeneca and GSK pledging £59billion of investment in the US over the next five years
There is huge frustration with the National Institute for Health and Care Excellence (Nice), which ensures taxpayers get value for money. Astra’s breast cancer drug is available in Scotland but not England.
The same goes for prostate cancer cure Zytiga, discovered in London and now in the Johnson & Johnson locker.
This week, Astra revealed that its medicine for lupus, which attacks the immune system, is ready for market. Whether British sufferers will benefit is unknown.
Even if there is a compromise on rebates, terrible damage has been done. Labour’s life sciences agenda is disappearing.
Doom loop
Life doesn’t get any easier for Chancellor Rachel Reeves. The latest monthly borrowing figures are a shocker.
Five months into the financial year and borrowing totalled £83.8billion, which is £11.4billion above forecast. All the £40billion of tax rises imposed last year has done is fuel inflation, raise borrowing costs and tip Britain deeper into debt.
And the picture may worsen before the Budget on November 26 if, as briefed, the Office for Budget Responsibility (OBR) lowers its productivity projection and growth forecast. The markets are less than pleased. After a good run, the pound dipped against the dollar and bond yields, already in the danger zone, ticked up.
There is no sterling crisis yet, but if the pound slippage should become more pronounced, then reach for seatbelts.
The black hole means consumers and business are unlikely to be freely spending or investing while uncertainty reigns.
Not all is lost. Forecasting public finances is notoriously erratic – it is the difference between two very big numbers – and retail sales data show confidence is not totally shot.
Either way, Reeves, having empowered the OBR, is not in control of her destiny.
VAR needed
Financialisaton of football gathers pace. Private equity outlet Apollo, once home to Jeffrey Epstein backer Leon Black, has a ruthless reputation.
Yet it is in advanced talks to buy Atletico Madrid in a debt-fuelled deal which values the Spanish club at £2.2billion. Its owners should be careful what they wish for.
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