North East Cluster
The longstanding and globally successful pharmaceutical manufacturing cluster anchored in the North East is thriving and is primed for further growth
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Background
The extraordinary growth of the Cluster’s activities and workforce over the last five years are strong proof that global challenges are being successfully addressed, from Alnwick in the north of the region to Teesside in the south.
Read the most recent report on the Profile & Importance of the North East.
The previous (2017) report is available here.
Profile and Importance of the North East Pharmaceutical Manufacturing Cluster
Growing its Contribution 2017-2023
North East Cluster
The North East of England has a long and strong heritage of pharmaceutical manufacturing, capability and expertise.
Images credit – Sterling Pharma Solutions / Onyx Scientific
Significant facilities were established in the 1960s and 1970s by UK and American owned parent companies in response to the sector growth in innovative medicines and the favourable environment in the UK for manufacturing and marketing of pharmaceutical products.
The facilities were active in making Active Pharmaceutical Ingredients (APIs) and in formulation and packaging, primarily for UK markets. This established the North East as one of three major areas for pharmaceuticals manufacturing in UK together with the Home Counties and the North West of England.
These facilities grew in capability and performance and were able to adapt to the needs of global customers as the first of several phases of globalisation, expansion and then consolidation took place in the pharmaceutical industry with added manufacturing capacity in tax advantageous countries and emerging markets.
The continuing evolution of the market and the development of blockbuster products and the growth of biomanufacturing enabled these facilities to hone their performance in terms of quality cost and reliability of supply. They contributed powerfully to UK economy, adding significantly to the UK’s balance of payments and enhancing the UK’s reputation in regulatory compliance and manufacturing process development, where it operates consistently at a very competitive global level.
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There are 12 pharmaceutical manufacturers in the North East of England Cluster with a diverse range of business models, ownership arrangements and relationship structures with the regional and UK economy. Owners include individual investors, private equity, US, Japanese, Chinese and Indian companies.
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Internationally Owned Sites
Six pharmaceutical manufacturing sites in the North East are internationally owned.
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GVA Contribution
The North East pharmaceutical manufacturing Cluster directly employs more than 5,500 people within the region. The Cluster companies included in this report contribute at least £2.72 billion to the UK’s Gross Value Added (ONS 2023 data).
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Product Export
Pharmaceutical manufacturing sites in the sector export an average of 61% of their products with 39% of exports going to the United States.
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Capital Assets Investment
Cluster companies have privately invested over £950m in both new and improving assets since 2018 with some significant investments made in the last 2 years.
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Workforce Growth
The sector workforce has grown by over 50% since 2018 and continues to grow. It is expecting to recruit a significant number of additional jobs to its current manufacturing and research workforce.
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Sector Employment
The Cluster employs over 5,500 people in the region with a total salaries bill in excess of £270 million.
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Productivity GVA per worker
Productivity ( GVA / job ) in the pharma manufacturing sector in the UK is 6 to 7 times higher than the economy as a whole.
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UK Pharmaceutical Sector GVA
The pharmaceutical sector GVA for the North East is 28% of the total manufacturing GVA for the region and 3.9% of the region’s total GVA; this is a higher proportion than for any other UK region.
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Productivity
Productivity in the pharma manufacturing sector in the North East is 11 times higher than for all registered businesses in the region. By this measure, productivity in the sector is higher than it is nationally.
Opportunity in the North East
The longstanding and globally successful pharmaceutical manufacturing cluster anchored in the North East is thriving and is primed for further growth.
Inward Investment & Business Support
