UK pharma sector R&D spending at 8-year high

R&D spending in the UK pharmaceutical sector has jumped 6.9% annually to an eight-year high, analysis of the latest ONS data by R&D tax relief specialist Catax shows.

Total pharmaceutical industry spending on R&D rose to £4.8bn last year, an increase of £306m from the £4.5bn recorded a year earlier1. It was the largest real-terms increase of any sector, according to the data.

The industry now employs 29,000 people directly involved in R&D, and the rate of growth has sped up from the 3.4% rise recorded in 2018.

Uncertainty surrounds what impact the COVID-19 pandemic will have on the level of investment this year, though pharmaceuticals is poised to be one of the most insulated industries from the economic disruption caused by the virus. Work on vaccines has seen the valuations of many firms leap this year while other sectors have suffered.

The amount that UK businesses across all sectors have invested in R&D continues to grow, rising 3.3% to £25.9bn2 but this was the slowest rate of growth since 2012.

The number of people employed by UK businesses to perform R&D also continued to grow, rising 4.4% annually to reach 263,000 full-time equivalents2.

The largest percentage terms increase in R&D spending was achieved by the printing, pulp and paper industry, which saw a 31.4% increase to £92m.

Mark Tighe, chief executive of R&D tax relief specialists Catax, said: “The pharmaceutical industry has been centre stage during the pandemic and it’s highly likely that its commitment to R&D investment will be bullet proof compared to many other industries.

“Like aerospace, it is a sector whose fate is intertwined with scientific endeavour and it would not be surprising at all to see its total R&D spending increase this year, although the industry will have to wait until next November to find out.”

Image credit: Micheile Henderson



1ONS UK Business Enterprise R&D Expenditure 2019, current prices

2ONS UK Business Enterprise R&D Expenditure 2019 report



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