UK's Labour Party Unveils £520 Million Innovative Manufacturing Fund in Life Science-Heavy Budget

The UK government has pledged up to £520 mn through the Life Sciences Innovative Manufacturing Fund (LSIMF) to drive economic growth and enhance the National Health Service (NHS). The fund will support capital investments across the life sciences sector - providing grants for the manufacture of human medicines, including active pharmaceutical ingredients (APIs) and finished products, medical diagnostics for disease identification and monitoring, and MedTech products related to human health.

The initiative aims to strengthen the UK’s position in life sciences while simultaneously ensuring the NHS is equipped for future healthcare needs, as well as to support innovation and expand manufacturing capabilities across the UK.

The following article originally appeared in Fierce Pharma.

Biopharma production efforts are set to receive a big boost in the U.K. thanks to a new budget rolled out by the Labour Party following this summer’s general election.

As part of the new budget presented Wednesday by the U.K.’s chancellor of the exchequer, Rachel Reeves, the country is debuting a new capital grants vehicle known as the Life Sciences Innovative Manufacturing Fund (LSIMF).

The fund will dispense up to 520 million pounds sterling (about $675 million) in capital grants that will be used for investments in manufacturing for drugs and medical technologies, according to a government release.

The LSIMF has been designed to help the U.K. safeguard against future health emergencies and capitalize on the country’s history in the life sciences industry, according to the release. The overall goal is to help bolster access to products for both pandemic and non-pandemic scenarios.

To qualify for grant funds, interested companies’ projects must cost at least 8 million pounds.

Aside from manufacturing, Reeves’ budget also includes provisions to boost funding for the U.K.’s National Health Service (NHS), the National Institute for Health Research and for greater investment in research and development.

“Despite the tough fiscal environment, today’s budget is a clear indication that the government sees life sciences at the heart of its growth mission,” Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry (ABPI), said in a statement.

Ahead of the U.K.’s general election in July—which saw the opposition Labour Party beat the incumbent Conservative Party in a landslide victory—ABPI called on the country’s political parties to lay out plans to unlock the nation’s healthcare potential.

In its “Manifesto for Investment, Health and Growth,” ABPI challenged politicians to help deliver better health and equity for NHS patients, boost access to new drugs through clinical trials, bring more manufacturing roles to the U.K. and create more highly skilled and well-paid jobs across the country.

ABPI’s challenge followed a bit of a turbulent patch for the U.K. life sciences industry. During the latter half of 2023, drugmakers and the British government butted heads over a rebate scheme that had proposed capping the annual growth rate for branded medicines at 2%. The industry and government ultimately compromised in November before reworking the deal once more in December.

Separately, AstraZeneca CEO Pascal Soriot drew attention to the financial hurdles affecting British drugmakers last year when he announced that his company had decided to build a $400 million drug ingredients factory in Dublin rather than in the U.K. At the time, Soriot said AZ made the decision due to punitive tax rates in the drugmaker's home country.

Nevertheless, AZ went on to reveal a 650 million pound (then $827 million) U.K. investment in March, with much of the cash earmarked to bolster manufacturing and R&D for vaccines at the company's Speke production site in Liverpool.

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