The chancellor has pledged to make the UK “one of the most attractive places in the world to invent new medicines” in his budget speech this afternoon.
George Osborne championed the UK’s life sciences sector and announced £100m of investment in new university research facilities.
However, he failed to announce any new industry specific measures.
“Around one fifth of the world’s top 100 medicines originate from UK research,” he said. “So we’re backing our life sciences sector through creating the Francis Crick Institute at St Pancras and cutting taxes on patents to make this one of the most attractive places in the world to invent new medicines.”
However, tax cuts on profits earned from UK registered patents were first announced in November 2010. Work on the £650m Francis Crick Institute for interdisciplinary medical research, which is due to open in 2015, started more than a year ago.
Sources said new measures had not been expected so soon after the publication of the Life Sciences Strategy in December.
Chief executive of the Association of British Pharmaceutical Industry Stephen Whitehead welcomed the move to a “more competitive tax regime” in the form of a 3 per cent cut to corporation tax over the next two years.
He said: “The measures announced in the budget statement will help improve the UK’s general business environment and allow pharmaceutical companies operating here to remain competitive in a global market.”
Mr Osborne also reconfirmed an increase in research and development tax credits for small and medium enterprises which will come into effect from next month.
The Ethical Medicines Industry Group, which represents small and medium biopharmaceutical companies, welcomed the plans.
Chair Leslie Galloway said: “In the UK, SMEs constitute approximately 90 per cent of the total number of biopharmaceutical companies and it is estimated that 80 per cent of innovation is derived from these smaller companies. As such, we are delighted to see that today’s strategy includes specific measures to support SMEs to grow and prosper.”