Novartis threatens UK withdrawal

 Novartis has warned the Government to reduce R&D bureaucracy to increase innovation or it will move its UK operations overseas.

Jon Symonds, Global Finance Director of Novartis, said that Britain is losing its competitive edge to emerging markets and called for the Government to streamline its R&D approach.

“One of the characteristics of the UK is a very low up-take on innovation. Sitting in another part of the business allocating my resources, if we don’t see the up-take in the UK resources will be allocated elsewhere,” said Mr Symonds.

To address the issue the pharmaceutical giant has arranged a meeting of scientists, NHS trustees and Government officials in London.

Novartis allocates around $10bn globally to research and development a year. Speaking in The Telegraph Mr Symonds said it usually costs a pharma company around $1bn to bring a new drug to market. However, he added there’s only a small window of opportunity to recoup this investment before products are exposed to generic competition.

Mr Symonds is expected to tell attendees at the crisis meeting that “the placement of research is increasingly globally competitive: we can and must make choices over where we invest.”

He will highlight how the Swiss-based company has chosen to invest in Shanghai, Russia and Brazil because the “one thing these markets have in common is that they have each recognised the need to shift from being a consumer of innovation to a generator of innovation.”

A withdrawal by Novartis would be another blow to the UK pharma industry. Pfizer cut 2,400 jobs last year when it closed R&D activities at its facility in Sandwich, Kent. Novartis UK currently employs around 3,500 people across eight sites.

Ana Nicholls, Healthcare Analyst at the Economist Intelligence Unit, said that Novartis is right to warn the Government over its prolong R&D processes – especially at a time when emerging markets are making “determined efforts to boost innovations in their pharma industries.”

She added that the Government has tried to make the “UK more attractive for pharma R&D” through schemes such as the Patent Box and with its proposed changes to the Patents Act. But she warned “Novartis wants the Government to go further and streamline the whole trial and approval process – a push that will no doubt be supported by GSK, AstraZeneca and others.”