ABPI disappointed that UK govt is proceeding with clawback scheme

Despite strong protest from the UK pharmaceutical sector, including several companies quitting the scheme, the government has confirmed plans to raise the revenue clawback rate paid by firms subject to the Statutory Scheme for branded medicines from 24.4% to 27.5%.

In February, trade group the Association of the British Pharmaceutical Industry (ABPI) warned that the proposed rate rise would send the worst possible signal to global investors and boardrooms at a time UK life sciences are already facing significant challenges. And this was confirmed when UK pharma major AstraZeneca last month announced a planned UK investment would now be made in Ireland due to tax reasons.

Work by  WPI Strategy suggests that sustaining such high rates for another five years would result in economic scarring, with a total loss of £50 billion ($59.8 billion) to UK GDP by 2058. The long-term losses in tax revenue alone are forecast to be worth £17.9 billion, around £5.9 billion more than the levy would raise for the National Health Service (NHS). Retaining high rates even longer after 2028, up to 2033, would mean foregoing a further £90 billion of GDP and £29.9 billion in associated tax revenues up to 2058.