Value of the Pharmaceutical Industry to the UK Economy

Hale, D. and Towse, A.

Monograph
June 1995

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Although there is widespread agreement about the important role the pharmaceutical industry plays in the U K economy, there is no easily available source presenting the chief figures in a clear and easily interpretable way. The purpose of this paper is to do precisely that. It is based on serious research and analysis by economists, and provides a perspective within which the industry may be understood, and criticised, and assessed.

Economists are well aware of" how cautious one must be in making an assessment of the value of an industry to an economy. One advantage of the present case is that the industry is relatively easy to define and delineate. Even then the authors have erred on the side of caution. The industry itself, no doubt, will complain that they have been too conservative, especially in countenancing the possibility that the net value of the contribution could even be below £1 billion per annum. My own judgement is that in economic assessment it is always better to err on the low side, enabling other experts to argue for an increase if they are able to do so validly.

May I finally draw the reader's attention to the seriousness of the economic theory that underlies a study of this kind. Its professional standards are high, and provide a basis for significant further debate. The authors are to be congratulated tor that, and for making an important contribution to this part of industrial economics.