Associate feature: Scottish pharmaceutical industry going from strength to strength

“We are absolutely central to the economy in Scotland,” Alison Culpan, Scotland Director of the Association of the British Pharmaceutical Industry tells Holyrood.

“We are the kind of industry that countries are looking for: we are innovative, we pay people well, the conditions are good, we develop our workforce, so it’s everything you’d want in an industry in your country.”

Culpan’s assessment of the pharmaceutical industry in Scotland comes as the Fraser of Allander Institute publishes its latest findings on the economic contribution of the sector – and it’s fair to say that the economic think tank largely agrees.

The pharmaceutical industry in Scotland has grown significantly over the past decade, with the wider sector itself employing 5,600 full-time equivalent jobs and directly generating £1.2bn in Gross Value Added in Scotland.

On its own, the manufacturing of pharmaceuticals employs around 4,000 people, with significant employment in rural areas.

This includes employment of a large number of people in places such as North Ayrshire where income and employment deprivation are higher than in most parts of the country, making the pharmaceutical sector an important contributor to inclusive growth in Scotland.

Indeed, the Fraser of Allander report concludes that “the pharmaceutical sector employs a significant number of people in Scotland and generates a significant amount of economic activity for the Scottish economy. The sector contributes to inclusive growth through the quality of its employment and wider healthcare benefits”.

“The pharmaceutical industry is a crucial plank in the Scottish economy for many reasons,” Culpan continues.

“There’s a lot of jobs, with over 5,600 full time equivalent jobs generating, £1.2bn in GVA, however I think our value is more than that in Scotland. If you go out into education, the pharmaceutical sector collaborates with many of our universities.

“Scotland works hard to get inward investment from the pharmaceutical industry and I think it needs to continue to do so because we are an industry that provides well-paid and fulfilling employment.”

Pharmaceutical employment in Scotland has grown consistently faster than the UK as a whole.

While employment in the UK pharmaceutical industry remains steady at 2009 levels, Scotland’s sector has grown and its GVA has almost doubled since 2009.

“Scotland has stepped up its productivity and I think that’s helped bring jobs to Scotland,” explains Culpan. “It is interesting that jobs are growing greater in Scotland than down south and our next task is to find out what is driving this and how we can maintain our current momentum.”

“However, we mustn’t forget that we are in a global race, because many countries, like Singapore, all want a slice of the cake and it’s great that Scotland has expanded its slice but we now need to understand how we can drive growth in the future.”

The pharmaceutical industry, which makes up a significant part of the Life Sciences sector, has been identified by the Scottish Government as a key ‘growth sector’ in which it believes Scotland has a distinctive comparative advantage.

Culpan says that while Scotland does have an advantage, pace is incredibly important and it is vital that Scotland continues to build on its reputation and is not left behind.

“We’ve started from being in pole position some years ago, but others have caught up so we need the government’s help to make sure we capitalise on the potential we’ve got,” she tells Holyrood.

“Pharmaceutical companies recognise that we have really good medical schools in Scotland and we’ve generated lots of good research from universities, and as a result have a legacy which other countries don’t. This legacy stands us in good stead and we’ve got to maintain that great reputation by moving forward in areas like data and AI.”

While the past year has been one of the toughest across all areas of the Scottish economy, the full impacts of the COVID-19 pandemic are still to be revealed, while the impact of Brexit on the pharmaceutical industry is also still up in the air.

As Mairi Spowage, Deputy Director of Fraser of Allender points out, different sectors have experienced differing levels of hardship, and recovery is likely to follow suit.

“It’s clear that there’s been a lot of challenges, so if you think particularly about the manufacturing part of the pharmaceutical industry, a lot of manufacturers faced a number of challenges, particularly during the first lockdown when some of them were closed apart from those deemed essential,” she says. “Obviously in the pharmaceutical industry, a significant number of manufacturers were deemed essential, but they’ve all had to adapt to new ways of working, and we can see that in manufacturing overall there has been a decent recovery in terms of the level of economic output from the depths of the pandemic.

“You can see there’s been a very different sectoral story, and many sectors have been able to adapt and sort of bring this into their overall risk assessment procedures. So, manufacturing companies and construction companies, for example, are very used to managing risk.

“And whilst industries that rely on social spending, such as the hospitality industry, have been on the hook when restrictions came in, they managed to open up during the summer, but they’ve been impacted greatly during the autumn and now again are back on the brink due to restrictions. Manufacturing and construction were shut down during April and May but were able to open and managed to keep going.

“We’re really seeing a differential sectoral story which may well mean that certain types of businesses aren’t going to survive, but others who have been able to adapt, will be a lot stronger for it.”

For the pharmaceutical industry, which has remained strong throughout the pandemic, one of the key lessons for the future is the need to continue collaboration, which has led to the sector gaining significant trust.

Maintaining this trust and utilising increased collaboration between industry, government, and academia, has the potential to ensure the sector continues to grow and succeed.

Culpan says the pandemic has allowed the public to see exactly how the industry works and has perhaps put to bed some myths surrounding the sector.

“Industry’s always been a great collaborator with academia, but with increased media attention this story has been told better than ever and the public understand far more about clinical trials, the risk involved, and how the R&D process works.

“From our perspective, the fact that the public are more aware of what we do, that they realise when our scientists enter the lab they are committed to discovering treatments which can be a game-changer for human health.

“That’s what drives research and I think in the past, we’ve sometimes been characterised as the pantomime villain, but actually, when you’re in industry, it certainly doesn’t feel that way, because you’re working with people whose number one priority is the patient and that’s what drives them. We all want that feeling of doing something which can help humankind.

“Many years ago, I remember being asked by a banker if Sir James Black was rich, if he’d become wealthy from his inventions of the beta blocker and the H2 antagonist and I remember just being absolutely flabbergasted because his idea of rich and mine were obviously very different.

“This one Scotsman had basically saved the lives and suffering of millions of people around the world and was he rich? Well, yes, I believe Sir James Black would think he was very rich.

“And people are now seeing that this is what drives the industry and I think, from my perspective, if there is a benefit of this crisis, if I have to try and find a silver lining of a particularly black cloud, then it’s encouraging that the public now have a greater understanding of how medicines and vaccines are developed.”

Spowage agrees that collaboration is one aspect which the pharmaceutical industry in Scotland could utilise going forward.

“There’s a lot of opportunities,” she tells Holyrood. “One of the things we found really interesting in the research, speaking to a lot of the pharmaceutical companies, was that the opportunities presented through collaboration, particularly with government and the NHS, could be adopted on a wider and more permanent basis.

“I think the hope from the industry is that a lot of this co-operation persists post-pandemic and that the level of trust that has been built can be used to see the industry as a facilitator to help solve some of the public health issues that we have in Scotland.”