What impact does Pharmaceutical & Life Sciences have on the UK economy?
02 March 2017
Life Sciences is a critical industry for the UK which brings life-saving and life-enhancing medicines to patients. The UK has a strong scientific community and a proven track-record of developing innovative new treatments and medical technologies. It has all the ingredients needed for a thriving Life Sciences ecosystem.
Pharmaceuticals and the broader Life Sciences sector have been recognised by the Prime Minister as being of strategic importance for the UK. However, there is no clearly defined measure of how much they contribute to the UK economy. In part this is because the diversity of the Life Sciences sector makes it difficult to rely on existing government statistics.
The Association of the British Pharmaceutical Industry (ABPI) commissioned PwC to generate such a measure. By conducting company-level analysis, our research sheds new light on UK Life Sciences. The company level database we have created also presents a new research resource that the ABPI can use to enhance understanding of the sector.
Our research and analysis show that Life Sciences is a major contributor to GDP, employment and taxes.
We estimate that the UK Life Sciences contributed £30.4bn to the economy in 2015. This contribution arises from the activities of pharmaceutical, medical technology and biotechnology research companies. We estimate that the direct contribution of the sector was £14.5bn. A further £7.8bn was contributed through indirect effects from the Life Sciences supply chain and £8.1bn arose from induced effects related to employee spending.
We also find that Life Sciences supported 482,000 UK jobs in 2015. These comprise of 140,000 direct employees of Life Sciences firms, 196,000 jobs in the supply chain and 146,000 supported through induced effects.
Finally, Life Sciences were an important contributor to the Exchequer. In 2015, we estimate that the sector made a tax contribution of £8.6bn across major tax groups such as Income Tax, National Insurance Contributions and Corporation Tax.
These are by no means the only benefits the sector confers on the UK. As well as contributing to the economy, a vibrant UK Life Sciences sector is delivering life-saving and life-enhancing medical technologies to patients.
We believe that our research will prove to be a valuable resource at a time of significant change and opportunity for the sector, in particular, in supporting the development of a new UK Life Sciences industrial strategy. The UK has the chance to grasp the opportunities presented through EU transition to reinvigorate the UK industry and maintain our world leading position.