Britain to Create Tax Breaks For Pharmaceutical Research Aimed at Developing World

Chancellor Gordon Brown, the U.K. minister of finance, on Friday announced plans to offer tax breaks to pharmaceutical companies that put more money into research of diseases such as AIDS, malaria and tuberculosis in the developing world, the BBC News reports. Brown will include the tax breaks in the March 7 national budget proposal and said he is also prepared to "change the tax status of donations of drugs and vaccines" made by drug companies to developing nations in order to "encourage such initiatives." Addressing the media ahead of this week's London conference on international child poverty, Brown said, "There is a gap here that has got to be bridged. Clearly we have not moved far enough and we have not moved fast enough." Brown unveiled his announcement ahead of the budget statement to get feedback from drug companies before allocating "public funds" (BBC News, 2/23). Brown was also expected to announce at the conference yesterday the creation of an international fund to help provide developing nations with "cheap vaccines against childhood diseases." He is "concerned" that world governments, which pledged to meet a series of social commitments in 1995 at a U.N. summit, would miss the 2015 deadline if a "concerted effort" is not made and hopes the conference will spur delegates to "concrete" action. The global commitments include cutting infant mortality by two-thirds, halving the number of children living below the poverty line and ensuring access to primary education for all children (BBC News, 2/26).

GlaxoSmithKline Responds
GlaxoSmithKline PLC CEO Jean-Pierre Garnier said he "welcomed" Brown's tax cut proposal and "pledged" to provide medicines at "steep discounts" to the proposed new global fund. "Tax credits for research will allow GlaxoSmithKline to allocate resources to more new products. In particular, this initiative could go a long way to pushing forward further research and development into vaccines for those infectious diseases that cause millions of deaths each year," he said. GSK has recently come " under fire" from Oxfam for its pricing and patent policies (Wall Street Journal, 2/27).