The 3 Key Restraints in the UK Life Sciences Market expansion

Regulatory Obstacles

The stringent regulatory regimes in the UK contribute to the high costs and long delays entailed in taking a new product through the regulatory system. This also introduces a potential barrier to innovation; this is particularly in small companies which find it difficult to operate throughout the whole innovation cycle and therefore, either rely on MNCs to take their products through to market, or alternatively they try to make themselves attractive acquisition targets, in both cases tailoring their innovation strategies to match those of the MNCs. As a member of the European Union (EU), the EU legislations also affect the regulatory regime in the UK, thereby adding additional pressure.

Competition from International Markets

France and Germany both registered a bigger pharmaceutical market size (nearly US$38 billion each as compared to the UK’s US$25 billion) than that of the UK in 2011. In the developed markets, the UK life sciences market faces competition from its European peers Germany and France, and the US. The UK attractiveness survey 2013, published by Ernst & Young, reveals that the UK, though retaining its position as no. 1 investor destination in Europe, is expected to be surpassed by Germany in the next few years. On the other hand, the emerging economies, such as China and India, are also presenting a competition to the UK life sciences market, mainly due to their high growth rate and thus growing opportunities.

Bolar Exemption

According to Bolar exemption, despite the patent rights, performing research and tests for preparing regulatory approval does not constitute infringement subject to certain conditions. One implication of this exemption is that it allows generic manufacturers to prepare generic drugs in advance of the patent expiration. The European Union introduced a ‘Bolar’ provision into its patent laws granting exemptions where the research relates to requirements for obtaining certain marketing authorizations. The UK, Ireland, the Netherlands and Spain only apply the Bolar provision to generic, bioequivalent or biosimilar drugs, while Germany and other European states apply it to all studies and trials needed to obtain marketing approval of any medicinal product. This often encourages pharmaceutical companies (having a pan European/worldwide presence) to take their research out of the UK where they can leverage a broader definition of ‘research’. Recognizing this, the UK government announced a patent rule change in March 2013. The measure is expected to pass into law as part of the enterprise and regulatory reform bill in October 2013 or later.

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