International trade

Creating trade policy for a life sciences superpower

The UK is a life sciences superpower. Its exceptional strength in the research and production of world-class medicines and vaccines has developed over many decades out of a strong science base, open approach to foreign investment in pharmaceuticals, a skilled manufacturing workforce, and robust culture of protecting innovation through intellectual property (IP) rights. Its regulators are recognised as among the most experienced and sophisticated in the world.

This ecosystem enables the UK pharmaceutical sector to thrive as a major exporter of life-saving medicines to patients across the globe. Over £23 billion worth of medicinal and pharmaceutical products were exported around the world in 2019. This figure is over double the £11.4 billion worth of branded medicines procured by NHS England in the same year, illustrating the scale and importance of UK pharmaceuticals as a fundamentally export-oriented sector.

As well as exporting vital medical goods, the UK also exports life sciences ideas – licensing treatments for production, converting its own IP into manufactured medicines in markets around the world, and shaping debates about the present and future of medicines regulation and pharmaceutical innovation. The sector’s strength is already recognised in the Life Sciences Industrial Strategy, where the Government has laid out its vision for transforming the UK into a global life sciences hub. Outside of the EU, the UK needs a trade policy that aligns with this goal and is fully customised to its unique features: enabling the sector to pull in the imports, talent, and capital it needs for world-class science and manufacturing, and ensuring it can export UK pharmaceutical innovation easily and compete fairly in export markets. A trade policy for the pharmaceutical sector can and should encompass all these aspects in a single strategic vision that supports the Government’s broader industrial policy and public service priorities.

This vision can then inform a consistent UK approach to Free Trade Agreements (FTAs) and wider trade policy.

To achieve the Government’s ambition for the UK to thrive as a life sciences superpower, the Association of the British Pharmaceutical Industry (ABPI) believes the Government should establish three core pillars for its trade policy for pharmaceuticals

A life sciences superpower:
3 key benefits for the UK

  • Companies will continue to invest in pharmaceutical R&D and manufacturing in the UK, creating highly skilled and productive jobs across the entire country.
  • The removal of tariff and non-tariff barriers will boost high-value UK exports.
  • Streamlined supply chains and regulatory practices support the UK’s public service priorities by helping to deliver the best possible treatments and value to the NHS.

A strategic trade policy for the UK pharmaceutical sector: a summary of ABPI recommendations

UK scientific innovation

  • Develop an ‘IP diplomacy’ strategy to promote UK standards in export markets.
  • Ensure that preferential trading partners commit to a clear baseline of best practice for IP that reflects current UK standards.
  • Ensure that pricing and reimbursement processes are fair, transparent and do not discriminate against UK companies

Medicines regulation and policy

  • Encourage all countries to regulate medicines to the highest international standards.
  • Develop and deepen formal channels of cooperation on medicines regulation to remove duplicative processes.
  • Work collaboratively with regulatory peers to pioneer new thinking behind novel regulatory pathways.

The pharmaceutical supply chain

  • Ensure the full elimination of all tariffs on finished medicines and raw materials.
  • Adopt a simplified, common approach to origin requirements and customs protocols for all UK FTAs.

No FTA commitments should in any way limit the UK’s freedom to define the policy of the NHS as it wishes, in line with its existing international commitments to non-discrimination.

Trade policy toolkit

The ABPI sees four basic tools available to promote and champion a trade policy for the UK pharmaceutical sector.

A strategy built around these pillars utilising these tools can reinforce the role of the UK as a global platform for developing, manufacturing, and exporting world-class pharmaceuticals. The next three sections of this ABPI report set out a strategic vision for UK trade policy for each of these pillars

FTA negotiations

FTAs are a vital way of aligning and locking in common high standards in the UK and with any trading partner. They can provide a joint commitment to robust IP protection, tariff liberalisation, openness to investment and effective medicines regulation by binding best practice in both markets, which enhances the value of export markets.

The WTO framework

The WTO framework has a number of elements specifically targeted to trade in pharmaceuticals that urgently need updating to reflect technological change and medical advancement – such as the WTO Pharmaceutical Tariff Elimination Agreement. The UK can and should advocate for these changes and encourage adoption of, and adherence to, important international rules on public procurement, technical regulation of pharmaceuticals, and IP

Regulatory diplomacy

As a highly regulated sector, the conditions of medicines regulation in export markets are a key determinant of UK export success. Strong links between UK regulators and their peers can support convergence in regulatory practice, aligning approaches to emerging regulatory questions and formally recognising UK ‘gold-standard’ approaches, or those similar in partner countries, in a way that reduces duplicative processes for exporters.

Unilateral policy in the UK

There are a range of choices the UK can make for its own framework that will support its performance as a life sciences superpower. Outside of the EU, the UK can set its general external tariff at the appropriate level to ensure competitive costs for manufacturing inputs and continue to enhance its robust framework for protecting IP to enable timely patient access to new medicines in the world.

Creating trade policy for a life sciences superpower

A trade policy for the pharmaceutical sector can and should encompass all these aspects in a single strategic vision that supports the Government’s broader industrial policy and public service priorities. This vision can then inform a consistent UK approach to Free Trade Agreements (FTAs) and wider trade policy.

To achieve the Government’s ambition for the UK to thrive as a life sciences superpower, the Association of the British Pharmaceutical Industry (ABPI) believes the Government should establish three core pillars for its trade policy for pharmaceuticals.

Creating trade policy for a life sciences superpower

WTO Twelfth Ministerial Conference: A Critical Opportunity to Strengthen the Global Trade and Health Agenda

The WTO’s Twelfth Ministerial Conference (MC12) presents an opportunity for WTO members to formalize and pursue a robust trade and health agenda that builds on these principles and further strengthens the open and rules-based international trading system in response to COVID-19 and future health crises.

Download the Trade Agenda