Medical Research and the Economy: The Case for Investment

The economy currently represents the biggest challenge to European governments. UK Policy makers are constantly called upon to stimulate growth, create jobs and boost prosperity, all while addressing a crippling budget deficit. As a consequence, the medical sciences industry finds itself under increased pressure to justify its slice of the budget, at a time when it’s facing increasing competition to remain at the forefront of international research.

The Government has pledged to ring-fence the science budget, a welcome step that acknowledges the importance of this industry. It is time, however, for the government to make a bolder, bigger commitment to medical sciences and the concomitant economic and social benefits this industry reaps by pledging to increase and maintain future funding.

Britain has been a world leader in medical science research for decades, responsible for 14% of the top 100 medicines in use today. However, while funding for R&D is ring fenced in the UK, frozen at just 1.8% of GDP since 2010, Chinese spending increases by 20% per year and Brazil tripled its R&D budget between 2000 to 2008. A recent report from the European Commission concluded that if recent trends in R&D continue, Europe and the US will lose their global lead to Asia: and with it the financial and social rewards the industry brings.

Though reports on the extent of returns differ, it is widely accepted that the medical sciences industry provides a sound investment. A recent report commissioned by the MRC, Wellcome Trust and Academy of Medical Sciences concluded that for every £1 invested in cardiovascular disease (CVD) research, a 39 pence return could be expected every year, forever. Similarly, every £1 the government commits stimulates a further £5 investment from the pharmaceutical industry.

Consider the American model: the National Institute for Health (NIH). In 2011, NIH funded research created over 400,000 new jobs and $62bil in new economic activity. A report by Families USA calculated that in 2007, every $1 in NIH funding resulted in an additional $2.11 in economic output in the US. By funding medical research the NIH has created a foundation for a medical innovation sector worth $90bil in goods and services and generating $84bil in wages.

These benefits extend beyond growth and employment. Jon Sussex, Deputy Director at the Office of Health Economics astutely points out: ‘The UK is richer as a result of medical research, as well as healthier’. In the case of CVD treatments, the medical sciences have developed over 45 different treatments and preventative therapies, not least Statins, Beta‐blockers and ACE inhibitors. Beyond the significant social value of the improved quality and longevity of life, there is a financial value to these health gains. It is estimated that between 1985‐2005 the gains in quantity and quality of life produced by new CVD interventions totaled £69bil.

The Centre for Economic and Business Research (CEBR) recently calculated that sick leave costs UK business £6.5bil annually. The value of a new analgesic to target Osteoarthritis pain, accounting for 3.1% of those on sick leave in the UK, is estimated to be worth £200mil per year to UK business in sick leave savings alone.

Though scientists are not blind to the current budget constraints, the case is clear for investment in medical sciences research. As a world leader in the field, the UK can attract the best academics, international collaborators, and private investment. As a result of this we benefit from huge economic and social gains. For the UK to retain these and remain a world leader, we must make a series of commitments.

First, financial support of the industry must be both sustainable and reliable. The research cycle – taking an idea from the lab bench to the bedside – is estimated as 17 years. In a competitive market, private sector investment relies on stability and threats of future cuts undermine the desirability of UK projects: sending investors, business and academics to safer research havens abroad. As advised by the Presidents of four UK National research Academies, the government needs to build a stable 10 year investment plan, protected and championed as a central pillar in the governments plan for economic recovery.

Second, the government must acknowledge the benefits associated with increasing medical research’s share of the national budget, both in terms of economic and social gains. Public funding fosters collaborations between both academics and industry and in doing so, increase our already world leading efficiency and returns.

While the UK government strives for growth it must be reminded that it need look no further than to the medical sciences industry for jobs, wealth and health. With the right strategic investment, our medical sciences sector will deliver.

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