It is no surprise that the Chancellor called out the importance of the life sciences industry to the UK in today’s Spring Budget. Intensive industry engagement over recent months made its inclusion as a critical industry inevitable.

During his lengthy speech, he gave a few positive signals on the Government’s intent to boost the sector. He went out of his way to praise industry, particularly for its role during the pandemic, before making two new headline announcements.

First, Hunt announced an enhanced tax credit scheme for small and medium sized R&D businesses.

20,000 companies will receive £27 for every £100 they spend. This has already been celebrated by the UK BioIndustry Association (BIA), and is clear recognition of the need to do more to support biotech companies to develop breakthrough treatments in the UK.

Second, he announced new reforms to regulatory approvals in an attempt to speed up access to innovative treatments.

From 2024, the Medicines and Healthcare products Regulatory Agency (MHRA) will allow for fast-track approval of medicines and technologies already approved by trusted international regulators, such as the US, Europe and Japan.

The intention is to support companies to bring innovative treatments to patients faster, while encouraging further investment and priority launches in the UK.

This announcement comes as industry has become increasingly vocal over their concerns that the UK is losing ground as a launch market. In 2023 alone, AstraZeneca cited a sub-optimal business climate as the main reason for building a new $400m plant in Ireland, instead of the UK, and AbbVie and Eli Lilly exited the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS).

This pressure has clearly cut-through, and industry should be pleased their voice is being heard.

But, will this new MHRA process actually make the difference the Government hopes and change the direction of travel? Potentially not.

As heralded by Hunt in his speech, the MHRA was the first in the world to approve a vaccine for COVID-19. The regulator is already efficient and new schemes to speed up regulatory approval, such as Project Orbis and the Innovative Licensing and Access Pathway (ILAP), are already in place.

The biggest barrier to providing swift access to innovative treatments is NICE’s capacity to swiftly appraise the increasing volume of company submissions, and the subsequent potential for protracted negotiations with NHS England. Quicker licensing will do nothing if the resource and full system alignment are not in place.

There are also questions around how the process will be implemented. It could easily become a perverse incentive, with companies prioritising regulators with more appealing launch markets, such as the FDA, in the knowledge that the MHRA will fall in behind any license anyway.

It would also be naïve to view any announcement of this kind outside of challenging VPAS negotiations, kicking off in earnest this month as the ABPI set out their proposal of a 6.88% fixed rebate rate, which was swiftly, and strongly rebuffed by both the Department of Health and Social Care and NHS England. Ultimately, companies remain deeply concerned about the attractiveness of the UK.

Labour could steal a march if they take a bolder, whole medicines pathway approach to access. Because while it is a good sign that the Government still acknowledges the critical importance of the life sciences sector, whether the bigger issues are addressed any time soon remains to be seen.