Encouraged by measures in the 2012 Budget to boost home-grown research and development, GlaxoSmithKline has announced its plan to invest more than £500 million in British manufacturing. The drug maker has also selected Ulverston in Cumbria as the site for its first new factory in almost 40 years, which will create up to 1,000 new jobs. The Government has confirmed in the budget announcement that it will reduce the level of corporation tax applied to income from patents – known as a patent box. According to GlaxoSmithKline’s CEO Andrew Witty, “The introduction of the patent box has transformed the way in which we view the UK as a location for new investments, ensuring that the medicines of the future will not only be discovered, but can also continue to be made here in Britain.”
This initiative will decrease the tax rate in relation to other countries like US and Japan and effectively will refine the amount of investments in the UK. The Chancellor’s statement was also welcomed by Stephen Whitehead, chief executive of the Association of the British Pharmaceutical Industry (ABPI), who said the measures will help improve the UK’s general business environment and “allow pharmaceutical companies operating here to remain competitive in a global market. Specifically, moves towards a more competitive tax regime, including a further reduction of corporation tax so that the UK has among the lowest rates in Europe, are welcome”.
Significantly, last week’s news provided a real glimmer of hope to healthcare in Europe, which has been profoundly impacted by the austerity measures necessitated by the current economic crisis. The pharmaceutical industry has been particularly hard hit as the measures have had a significant effect on both drug innovation and pricing. Pfizer’s retreat from Sandwich, a site it’s owned since the 1950s, and the relocation of Shire Pharmaceuticals to Ireland provide high-profile examples of how pharma companies have been forced to cut back operations in Europe and focus instead on countries such as the US and Japan where attitudes towards research and development have, until now, been seen to be more favourable.
Evidently, none of us know what the future holds. Nevertheless, it will be important for healthcare communications to keep an eye on the developing situation and change with the times. No doubt our greatest responsibility though will be to reassure stakeholders, particularly patients, throughout the process of change.