An industry group has put forward new proposals for developing a strong and sustainable operating environment for R&D in the UK, focusing on growth in the specialty biopharmaceutical sector.

Small and medium-sized enterprises (SMEs) constitute around 90% of all biopharma companies in the UK and it is estimated that 80% of innovation is derived from these smaller firms, says the report, published by the Ethical Medicines Industry Group (EMIG) which represents biopharma SMEs.

The "sad but seemingly continued decline of the large pharmaceutical sector's R&D footprint in the UK has sharpened attention on the business needs of smaller companies," it says. These firms typically lack the resources required to conduct all the necessary steps, from basic research to marketing, and consequently they tend to focus their R&D in well-defined and narrow fields, such as specific indications for pharmaceutical formulations. They also therefore frequently out-license or sell their innovations to larger companies.

As a result, the speciality biopharma SME sector is crucial to the overall innovation process and thus to the UK economy, says EMIG.

"Currently, approximately 25% of the molecules in the development portfolios of large pharmaceutical companies have been acquired from other companies, many of which are SMEs," notes the Group's chairman, Leslie Galloway.

EMIG says it welcomes the government's focus on ensuring growth in the life science industry but believes there must be a focus on supporting SMEs. Specifically, the group’s report is calling for:

- the NHS to become a full and integral part of the medicines invention process with SMEs, instigating a widespread, commercially-aware culture that embraces research and enables this to be performed throughout the entire NHS infrastructure, particularly at local level;

- the Department of Health and Department for Business, Innovation and Skills (BIS) to jointly recognise the link between a nation's attitude towards the procurement, adoption and diffusion of new medicines and a company's long-term willingness to continue R&D investment in that country;

- the value and ultimate price of a new medicine to be assessed in terms of the outcomes it provides for patients and the health care system, and for the UK to focus on producing more individuals with the skills to evaluate such value-based outcomes;

- the government to encourage greater public and private sector collaboration and for SMEs to have direct assistance in navigating the range of collaboration possibilities with the public sector. A range of de-risking measures is needed for R&D, especially for SMEs, and best practices can be adopted from successes in other sectors. Also, the Technology Strategy Board (TSB) should have a greater brokerage role in forging new collaborative projects;

- teaching and training in the R&D of medicines to become an academic discipline in the UK, possibly to be pioneered by the Francis Crick Institute;

- the Treasury to be prepared to provide direct funding for aspects of early-phase clinical work performed by SMEs; this would, in time, reap greater tax returns due to more products coming to market more quickly, says the report. Effective cluster formation also requires fiscal incentives to encourage companies to relocate, it adds;

- UK medical research charities to direct more of their research budgets to medicines development; and

- regulatory authorities to be an integral, not arms-length, partner in the development of new ways of working between the public and private sectors. The Medicines and Healthcare products Regulatory Agency (MHRA) should engage with SMEs in a new, open and wide-ranging dialogue on ways to deliver new medicines to patients safely and more efficiently, especially for those with significant unmet medical need, says EMIG.