The UK Pharmaceutical Industry

• The pharmaceutical manufacturing industry represents a large sector of the U.K. and world economies. The industry is highly geared to research and development (R&D) which is critical to achieving sustainable competitive advantage.

• The market size in the U.K. has grown at 6.2% in 2002 and has a market capitalisation of £10 billion. Careers in pharmaceuticals represent a high proportion of the UK workforce.

• Pharmaceutical companies are forced to look continually at innovation, and development of new products spending an estimated 41% of total UK Research and development.

• Return on investment on products is high risk with the added difficulty in assessing income streams from long- term investments. Rewards when achieved are however, very high as patented (20 years plus) drugs provide billion pound income streams.

• For the industry to continue to achieve competitive advantage in a highly regulated marketplace and high barriers to entry, there has been considerable consolidation with the global players GlaxoSmithKline, Astra Zeneca and Pfizer dominating the marketplace in the UK.

• To overcome high barriers to entry the smaller companies in the industry are forming partnerships with the global players and continuing to remain in their niche highly specialist markets.

• As the industry looks towards the next ten years the key decisions are likely to be linked to the logistics of the operational activities along with the continued research and development expenditure to bring a continuous stream of products to market. Growth is expected to continue at 8% per annum with rhe focus being on prescription only medicines.

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