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GSK makes £275 million manufacturing investment in UK despite Brexit uncertainty

28 July 2016

On July 26, pharma giant GlaxoSmithKline (GSK) announced £275 million of new investment at three of its manufacturing sites in the UK to boost production and support delivery of its latest innovative respiratory and large molecule biological medicines. The investment will take place at GSK plants in Barnard Castle in County Durham, Montrose in Scotland, and Ware in Hertfordshire.

GSK will invest £92m in Barnard Castle, where it employs 1,100 people. It will build a new aseptic sterile plant where existing and new biopharmaceutical products will be made. At Montrose, where it employs 450 people, it will spend £110m on a new facility to make respiratory active ingredients. And in Ware it will invest £74m to support the expansion of company’s new Ellipta respiratory inhaler by increasing capacity there. The company employs 1,200 people at the plant.
In addition to jobs associated with the construction of the new facilities, GSK said that today’s announcement will support current employment at these three sites and is expected to lead to the creation of new employment opportunities.
GSK has nine manufacturing plants in the UK, employing about 6,000 people. It said the UK was still “an attractive location for investment”, partly because it had a competitive tax system. Pharmaceutical companies developing and making products in the UK pay a lower rate of corporation tax on profits generated from UK-owned intellectual property.
Before the June 23 referendum on leaving the EU, GSK chief executive Sir Andrew Witty argued that Britain should remain a member of the EU saying, “It’s better to be in and improving it than to be on the outside and trying to plot a new course.”
However, as he announced the investment decision, Witty warned that if the European Medicines Agency (EMA) relocates from London as seems likely and the UK creates its own regulatory body, the company’s regulatory burden would double.
He also highlighted concerns about a potential brain drain of scientists who are EU nationals from Britain following the referendum, and urged the government to quickly end the uncertainty surrounding their status. About 14% of the company’s staff in the UK hail from other European countries.
The impact on UK scientists’ collaborations with the rest of the EU was also a concern, he said, although so far he saw few signs that UK scientists were frozen out of projects.

Greg Clarke, the UK’s new business and energy secretary, said GSK’s investment was a reflection of confidence in Britain and “underlines our position as a global business leader”. “GSK’s recognition of our skilled workforce, world-leading scientific capabilities and competitive tax environment is further proof that there really is no place better in Europe to grow a business,” he said.

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