Big Pharma in the Balance
On the industrial policy front, none of the three parties want to kowtow to Big Pharma. Nevertheless, The Guardian's April 11 story revealing that Novartis and Roche are threatening to pull investments out of the UK in an ongoing row over
pricing and rules surrounding clinical safety trials seemed more of an embarrassment to the government than a sign of it resisting
corporate pressure. According to the report, "the documents ... make clear that cabinet ministers have been conducting a vigorous
charm offensive to prevent multinational drug companies leaving Britain."
Roche refuted the story and Novartis declined to comment, but none of this stemmed the flow of conspiracy theories about an
attempt by Big Pharma to influence the course of the election. The corporate world, of course, has more to gain from a Conservative
win—the Tories have vowed to cut corporation tax and new businesses' National Insurance contributions—but Labour is certainly
not keen to lose the business vote it worked so hard to gain back in 1997.
There was more explicit agreement between the parties on the "Patent Box," a scheme proposed by the Review and Refresh of
Bioscience 2015 advisory report and confirmed in Chancellor Alastair Darling's March Budget to reduce corporate tax on income
from patents from 28 to just 10 percent by 2013. Another initiative that the parties all support is the "Innovation Pass,"
which will help patients with rarer diseases access highly innovative new drugs not yet appraised by NICE. Although proposed
under Labour, both initiatives will come to fruition regardless of the election winner.
Not long before the election was announced, the Labour government also issued a press release stating that the Prime Minister
intended to establish a new cabinet-level "Minister for Life Sciences" in the next Parliament. There is no reason to believe
a Tory or Liberal Democrat win would nix this idea either.
There has also been an overall convergence of policies regarding biotech and SMEs. The Tories are promising that "R&D tax
credits will be improved and refocused on hi-tech companies, small businesses and new start-ups," along with government guarantees
to create more diverse sources of affordable credit for SMEs. Labour, for its part, aims to "bring together a total of £4
billion of public funds and combine it with private money to channel equity to businesses looking to develop and grow." This
scheme will include an extra £500 million of bank lending being made available.
But the closeness of the three parties on these and other issues has not inspired much optimism among industry analysts. If
the May 6 election results in a hung parliament, with each of the two major parties dependent on the Liberal Democrats for
support, the larger problem will be the absence of a stable hand at the till, causing more confusion and uncertainty as a
cobbled administration awaits improved conditions in which to send voters back to the polls to deliver a clearer mandate.
And what's the big issue for Big Pharma? Whether or not there will be stable, predictable, consensus-based policies at a time
when companies have numerous alternatives on where to place their money and expertise, often at much lower cost. An inconclusive
election result will perpetuate the policy inertia that industry leaders such as GSK's Andrew Witty contend is the more serious
long term threat to the UK's status as a favoured site for pharma investment.
Julian Upton is Pharmaceutical Executive's European correspondent. He can be reached at email@example.com