UK Patent Box To Boost UK Competitiveness, Says GSK

by Robin Pilgrim, LawAndTax-News.com, London

11 December 2009

GlaxoSmithKline (GSK), one of the world's largest research-based pharmaceutical and healthcare companies, has welcomed the proposed introduction of the "patent box" regime in the UK, announced in the pre-budget report.

GSK believes this new system, which will apply a 10% rate of corporate tax to patent income from April 2013, will significantly improve the UK’s international competitiveness and encourage long-term inward investment in the UK from companies seeking to build their future high technologies and manufacturing capability.

Andrew Witty, CEO of GSK, said: “The patent box is exactly the sort of active, long-term and creative support that we need from the government to ensure that the UK remains an attractive place for highly skilled sectors such as pharmaceuticals. For GSK, assuming the new regime will apply to patents currently under development it will have the immediate impact of making the UK a priority area for future investments, particularly in manufacturing.”

According to GSK, the introduction of the patent box will enable the company to increase its existing investment in the UK. Near-term likely investments include building a state-of-the-art biopharmaceutical manufacturing plant.

GSK currently has six biopharmaceuticals in late-stage development for treatment of diseases such as lupus and diabetes, representing 15% of GSK’s clinical pipeline.

The company is also committing new investment to an existing facility in the UK to manufacture next generation respiratory medicines.

In combination, the company said that these new investments in UK manufacturing will amount to approximately GBP500m (USD816m).

The introduction of the "patent box" will also benefit small businesses who supply services and facilities to sectors specializing in research and development, GSK noted. The company currently works with more than 20,000 suppliers in the UK.

Recommended