Budget provides UK science incentives
pharmafile | March 24, 2011 | News story | Research and Development | George Osborne, R&D tax credits, clinical trials
Chancellor George Osborne has unveiled tax incentives, new funding and moves to cut red tape for the life sciences sector in his annual Budget.
Osborne stressed that the life sciences was a primary driver of growth for the economy and wanted to make this “as easy as possible” for the pharma industry and other sectors.
A new health research regulatory agency will be set up to streamline regulation and cut the cost of conducting clinical trials in the UK.
Funding from The National Institute for Health Research (NIHR) to NHS trusts will be conditional on meeting benchmarks, including a 70 day target to recruit first patients for trials.
The move comes in response to clear evidence that times for setting up trials in the UK lag far behind other countries. A recent report by the Academy of Medical Sciences found that it took an average of 621 days from a decision to support studies through to the first patient entering a trial, compared to Canada’s 30 to 60 day process.
Other measures includes a plan for the NHS Chief Executive to provide a report by November 2011, on how the adoption and diffusion of innovations can be accelerated across the NHS. The report will be put together in consultation with industry, academia and other interested parties and will inform the strategic approach to innovation in the reformed NHS.
Tax breaks
One of the key measures aimed at stimulating the entire UK economy is the move to lower Corporation Tax. This will be cut by 2% this year, (double what Osborne had previously announced) and will continue to fall by 1% every year for the next three years bringing it down to 23 per cent. The government says this will result in the UK having the lowest corporate tax rate in the G7 nations.
The government will also increase the rate of the SME R&D tax relief to 200% in 2011 and 225 per cent in 2012, subject to state aid approval. In addition the Government will look to make it easier to use by small firms, and consult on changes to ensure relief is available when R&D project work is contracted out.
There will be also be 21 “enterprise zones,” 11 more than originally intended, that could include the region of Kent where Pfizer’s R&D site in Sandwich, is set for closure by 2013.
These zones will incorporate specific tax breaks and employment incentives in an effort to both attract more businesses to the UK and keep others from leaving.
Osborne also announced a £100m boost for science with new investment in publicly-funded research centres in Cambridge, Norwich, Harwell and Daresbury.
The Chancellor also confirmed that new legislation would be developed by the autumn to introduce the previously announced ‘patent box’. This will provide a reduced rate of 10% corporation tax from profits derived from patents, aimed at stimulating investment in the UK bioscience sector.
APBI welcomes measures
The UK pharma industry has welcomed the measures. ABPI Director General Richard Barker said the pharma industry “warmly welcomes” measures in the Budget to cut red tape and improve the process for clinical trials.
This is “a significant step towards faster patient access to new medicines whilst also making the UK a more attractive place to do business,” Barker said.
He added that these measures, together with the package of measures around skills, IP, tax credits and breaks and the continuation of translational research partnerships, shows that “Britain is a strong competitor,” and place to do business for the pharma industry.
Nigel Gaymond, the Chief Executive of UK biotech association the BIA also welcomed the news.
“This is an extremely significant day for our sector, enhancing the UK’s competitive position in life sciences through a wide variety of supportive measures.
“R&D tax credits are the lifeblood of the R&D intensive bioscience sector, and BIA has maintained a sustained campaign on this issue for many years.
“The extension of this relief will be enthusiastically welcomed by companies in our sector. In addition, many of the other measures outlined today demonstrate this government’s commitment to putting life sciences at the heart of the UK’s recovery,” said Gaymond.
Full list of measures announced for Life Sciences in the Budget
1 The Government will set up a new health research regulatory agency to streamline regulation and improve the cost effectiveness of clinical trials. It will make future National Institute for Health Research (NIHR) funding to providers of NHS services conditional on meeting benchmarks, including a 70 day benchmark to recruit first patients for trials.
2 The Government will reduce perceived gold-plating and increase the proportionality of EU Clinical Trials Directive (CTD) and its application.
3 The Government will open up information about clinical trials to enable the public to get involved.
4 The Government will build a consensus on using e-health record data to create a unique position for the UK in health research.
5 The Government will open up information on clinical research to promote collaboration and innovation.
6 The Government will consider opening up prescribing data.
7 The Government will form new Translational Research Partnerships from its £775 million investment in NIHR Biomedical Research Centres and Units.
8 The Government will remove any barriers that limit the further development of geographical clusters, working with industry, local government, universities, NHS and funders.
9 The Government will launch a competition to form a Cell Therapy Technology and Innovation Centre.
10 To ensure educators provide the skilled individuals the sector needs to grow, the Government will, through Cogent, improve market signalling by bringing companies and educators together.
11 The Government will ensure that the Intellectual Property (IP) system supports life sciences businesses.
12 The Government will take forward a range of measures to encourage innovation in NHS procurement.
13 The NHS Chief Executive will provide a report by November 2011, in consultation with industry, academia and other interested parties, on how the adoption and diffusion of innovations can be accelerated across the NHS. This report will inform the strategic approach to innovation in the reformed NHS.
14 The Government will take forward a package of measures to improve the take up of assisted living technology.
15 The Government will strip out regulations that were never meant for the social care market and are preventing market entry and flexible services.
16 The Government will establish a proactive, entrepreneurial NHS Global to make the most of the NHS brand internationally and to offer support and advice to NHS trusts.
Source: The Plan for Growth
Ben Adams
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