HC Deb 06 May 2004 vol 420 cc1474-6
2. Mr. Eric Illsley (Barnsley, Central) (Lab)

What steps she is taking to improve the competitiveness of the UK pharmaceutical industry. [170679]

The Minister for Trade and Investment (Mr. Mike O'Brien)

The UK is one of the world's leading locations for pharmaceutical research and development, and the Government are committed to maintaining and strengthening that position. Our 10-year strategy on science and innovation, as well as specific work undertaken in partnership with the pharmaceutical industry, will help to ensure that we achieve that aim.

Mr. Illsley

I am grateful to my hon. Friend for that response. As he points out, the UK pharmaceutical industry makes a huge contribution to our economy, investing some 40 per cent. of this country's research and development budget alone. He may be aware that, at a recent seminar in the House, reference was made to the competitiveness of the UK industry compared with that of the United States. Will he look again at the higher spend on drugs in the US, which makes it attractive to highly mobile capital and pharmaceutical companies? Will he do all that he can to ensure that the UK pharmaceutical industry maintains its current position?

Mr. O'Brien

We shall certainly do all that we can to ensure that the UK pharmaceutical sector enjoys a highly favourable position in the UK economy and is competitive, but it operates in a globalised area of the world economy. The UK continues to be strongly favoured for investment; the rest of Europe perhaps less so. The UK played a key role in the G10, the EU high-level group on innovation and the provision of medicines, which reported to the Commission in 2002 with recommendations to address the growing imbalance in competitiveness and investment with the United States. Europe has great strengths in science and research, but that does not translate into industrial leadership and investment. As in other sectors, the key is to provide the right framework for incentivising and rewarding innovation. We in Britain do so, but other parts of Europe do not. We are working hard, however, to ensure that the European pharmaceutical industry as a whole remains high on the EU's competitive agenda.

Dr. Andrew Murrison (Westbury) (Con)

The health of the pharmaceutical sector in this country is heavily dependent on its research base. In that context, what discussions has the Minister had with the industry about the likely impact of forthcoming legislation, particularly the Human Tissue Bill and the EU clinical trials directive?

Mr. O'Brien

The Department has had discussions with the pharmaceutical industry to ensure that we respond to its concerns. It may not always want everything that we can do, but it is satisfied that we are listening carefully and are responding with appropriate amendments.

Dr. Ashok Kumar (Middlesbrough, South and Cleveland, East) (Lab)

Given the importance of the pharmaceutical industry to our economy, as the Minister said, and its strong links with the chemical industry, I wish to raise a matter affecting Teesside, where Huntsman is going to build a polyethylene plant and apply to the Department of Trade and Industry for regional selective assistance. Will he consider that grant and provide all the support that he possibly can, because the plant is very important to the Teesside economy?

Mr. O'Brien

I accept that it is indeed important, and know that my hon. Friend has made strong representations on behalf of Huntsman. We look forward to intensive negotiations and discussions with the company to ensure that we provide whatever support is appropriate for us to provide. We shall obviously look at all the circumstances surrounding its bid for an RSA grant, arid hope to be able to give my hon. Friend good news, but we cannot guarantee to do so.

Mr. George Osborne (Tatton) (Con)

The 5,000 people who work in AstraZeneca's laboratories in my constituency are a testimony to the investment that is being made in the British pharmaceutical industry. Does the Minister agree that the capacity to make such investment and develop new life-saving drugs is undermined by unilateral decisions by, for example, the Hungarian Government, to slash pharmaceutical prices, thus reducing the amount of money paid for some pharmaceutical products? That has hit profits and the capacity of companies such as AstraZeneca to invest in eastern and central European countries. What are the British Government doing to make representations to the Hungarian Government?

Mr. O'Brien

Hungary is an EU accession country, and we must ensure that it accepts the need for a level playing field and negotiates with its partners in the EU about the operation of the industry and the support and advantages that it seeks to provide. The aim of the EU is to create that level playing field. As for AstraZeneca, we are listening carefully to the concerns that it shares with other pharmaceutical companies about advantages that are being sought in some eastern European countries, and we shall make appropriate representations or their behalf to the Hungarian Government.