As part of the government’s pre-Christmas, pre-election “we can only do this because we’re been successful” giveaway, Chancellor George Osborne has announced news of an increase in tax credits for R&D. Tax credits are to increase to 230% for small and medium companies, and to 11%for large firms.
ABPI chief executive Stephen Whitehead was happy with the news. “I welcome the chancellor’s decision to increase the rate of R&D tax credits for both smaller and larger firms which will have a beneficial impact on business investment in the UK”, he said.
Whether the level of credits are right are wrong, the logic of using industrial policy to promote industrial objectives, is correct. Likewise, using health policy and the health budget to promote health objectives, is correct. The trouble comes when you mix the two. Rewarding innovation by sacrificing health, which is the consequence of NICE taking innovation into account, is wrong in principle. It also rewards the pharmaceutical industry twice for innovation.
Health economists sometimes get the reputation of pharma bashers. They are not. Tax credits are a good way to promote innovation. Penalising patients is not.
These views do not represent those of ScHARR, or any of its funders, and perhaps not even those of the author.