After years of sustained growth, with the exception of 1987, the United Kingdom balance of trade in pharmaceuticals has fallen by 16.4 per cent. This is the first fall of such magnitude since 1945.
Figures announced by the Association of the British Pharmaceutical Industry on April 25 show that, although exports of medicines rose by 7 per cent, from £5,910m in 1998 to £6,332m in 1999, imports went up 24 per cent, from £3,447m to £4,273m. The result was a reduced trade surplus of £2,060m for 1999 compared to £2,462m the previous year.
The trade balance with European Union countries showed one of the biggest drops, of 73 per cent over the previous year. In 1998, the balance of trade with EU countries had been worth £696m, declining to £191m in 1999. The ABPI blamed parallel importing for the decline.
"While the strength of the pound clearly has an effect on the export effort of all UK-based companies, including the pharmaceutical industry, parallel trade is an issue in reducing the balance of trade surplus. I believe these figures confirm the industry's fears that the UK environment for pharmaceuticals is not as encouraging as it has been in the past," said Dr Trevor Jones (director general, ABPI). "However, while the balance of trade shows a significant drop, and one which we would be ill-advised to ignore, all is not doom and gloom. Exports are still increasing, and the pharmaceutical industry remains the third biggest earner for Britain in terms of balance of trade."
An ABPI survey showed that British remained a favoured country for pharmaceutical research and development. Investment in R&D during 1998 increased by more than 5 per cent. This was expected to rise to nearly 14 per cent in 2000. Fifteen per cent of sales income was reinvested in R&D, compared with a global average of 13.5 per cent.