Full-cost regime frightens industry

November 9, 2006

As UK universities pass on the total costs of research to businesses, drugs companies are seeking partnerships overseas, writes Anthea Lipsett.

Drugs firms are turning their back on collaborations with UK academics in the wake of government reforms that oblige universities to charge the full economic cost of research projects, the Association of the British Pharmaceutical Industry has warned.

According to a survey that the ABPI conducts every two years, there was a 23 per cent drop in the number of company research collaborations with UK universities between 2003 and 2005.

Malcolm Skingle, director of academic liaison at GlaxoSmithKline, told delegates at the annual meeting of the Engineering and Physical Sciences Research Council that the policy - which requires universities to charge the total cost of doing research, including researchers' salaries, overheads, estate costs and a contribution to the supervisor's salary - meant the UK was becoming expensive, even for a global organisation.

"Unfortunately, the non-financial contributions from industry, which often catalyse the research, are seldom taken into account in university costings," he said.

Philip Wright, director of science and technology at the ABPI, said the decline was attributable to universities forging fewer but larger collaborations with UK universities and more with universities overseas. He said: "Full economic costing is one factor and (others include the) unrealistic expectations universities have of the value of intellectual property, particularly in our industry where there are high attrition rates, and increasing competition from overseas universities.

"The survey is more indicative than absolute, but this shift out of the UK is worrying. It was rare, now it is more common. Other academics see that there is an opportunity here and are more open and willing to collaborate with industry," Dr Wright said.

"There is a lack of willingness to consider industrial costs in the UK. The benefits and the quality are still a strong case for doing research here, but we are not as competitive as we were," he said.

According to the survey, there has also been a 4 per cent decline in the number of studentships between 2003 and 2005. There were now 668 registered with the ABPI's academic liaison group, Dr Wright said.

Tim Bradshaw, head of the Council for British Industry's Innovation, Science and Technology Group, said: "Full economic costing was always going to be a problem in how it was interpreted by universities. We predicted that this was likely to happen and warned that the Government had to be careful."

The latest Higher Education Funding Council for England statistics, published in July, showed a marked increase (10 per cent) in collaborative research income overall from 2003 to 2004 - from £491 million to £541 million. But contract research income from business dropped 1 per cent to £287 million.


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