Key Summary
- Germany’s Bayer had suspended new enrollments for patients with critical unmet needs.
- Officials negotiate tax relief to safeguard UK's clinical research edge.
- Firms argue VAT on post-trial free drugs discourages studies in the UK.
The government has decided to pause the imposition of VAT on free medicines provided by drug companies to patients after clinical trials.
Drug makers had earlier raised alarm over VAT on free medicines they provide to patients as part of early access programs.
HMRC has agreed to suspend its enforcement during an ongoing government review, triggered by sector complaints.
Last month, German pharma giant Bayer had suspended new enrollments for patients with critical unmet needs, while another firm had indicated that it was contemplating a similar move.
The programmes bridge gaps by offering unlicensed therapies to those with life-threatening conditions lacking approved options.
Industry leaders fear extra costs for continuing free treatments post-trial will discourage research and erode Britain's attractiveness in life sciences research.
Julia Lopez, the shadow science, innovation and technology secretary, had raised concerns with Liz Kendall, the secretary of state, in February, where she had said the “UK’s reputation as a home for clinical research is essential to our status as a life sciences superpower. That reputation is now at risk.”
Bayer cited HMRC's stance shift as forcing its pause on newcomers, though existing patients continue.
