Confidence dives as UK scraps drug pricing scheme

By Ben Hirschler

LONDON (Reuters) - Pharmaceutical companies have lost confidence in investing in Britain following a decision by the government to scrap a 50-year-old drug pricing mechanism, according to a survey released on Thursday.

Three-quarters of more than 100 drugmakers with British operations said they had little confidence in the current UK market environment and 83 percent expect the position to deteriorate in the coming 12 months.

"I don't think the government is aware of the depth of concern," Richard Barker, director general of the Association of the British Pharmaceutical Industry (ABPI), told reporters. "I hope this will be a bit of a wake-up call."

More than a third of companies expect to cut investment in research and development in Britain and a similar number will reduce investment in buildings and other tangible assets over the coming year.

The number of UK clinical trials is expected to drop at 46 percent of companies.

The unprecedented survey, which was conducted by independent researchers on behalf of the ABPI and the Confederation of British Industry (CBI), shows feelings are running high in the current stand-off with government.

Ministers announced plans in August to renegotiate the Pharmaceutical Price Regulation Scheme (PPRS), covering the price paid by the state health service for branded medicines, and last month gave notice that the current arrangement would end on September 1. It had been due to run until 2010.

JOB CUTS