Recently I spoke with two international businesses, one Dutch and one Korean. Both were involved in oncology clinical trials. Both were deciding where to run the next phase of development. And in both conversations, the United Kingdom felt like it was already on the back foot especially against Australia.
For obvious confidentiality reasons I will keep this high level. What stood out was not the science. It was the comparison exercise.
These were globally structured biotech groups. They had options. They were modelling jurisdictions side by side, looking at regulatory pathways, investor appetite, and crucially, net cost after incentives.
In one case, part of the clinical programme was likely to be placed in Australia because an investor was supportive on that basis. The attraction was straightforward. Australia offers a refundable R&D tax incentive that can reach 43.5 percent for eligible companies. For early stage oncology trials, where expenditure runs into the millions, that level of support materially changes the funding equation.
We then looked at the current UK position under the merged R&D scheme. The effective net benefit is significantly lower. Recent reforms have also narrowed the scope for overseas costs. For oncology programmes that naturally span multiple countries, that restriction reduces flexibility and, in commercial terms, reduces appeal.
The second business reached a similar view. The UK science base was respected. The ecosystem was acknowledged. But when the numbers were modelled, the UK was not the clear winner.
This is why the phrase “losing the R&D Ashes ” comes to mind. When internationally mobile drug development is compared across jurisdictions, the UK is not dominating the scoreboard like our cricket team in the ashes we are losing.
The reforms introduced in recent years have focused on slashing benefit rates, tightening compliance, and reducing error. That is understandable. However, oncology clinical trials are exactly the type of high value, scientific activity the UK says it wants to attract. They bring specialist employment, hospital collaboration, and long term commercial opportunity.
If the structure of the incentive makes the UK less competitive for globally mobile life sciences projects, that is a strategic outcomethat deters investment.
There is a serious question here for policymakers. Should there be enhanced support for drug development and clinical trials? A higher effective rate for qualifying pharmaceutical R&D, or greater flexibility for internationally structured trials, would send a strong signal that the UK intends to compete. I felt in trying to win these trials for the UK that where it mattered I was heavily restricted in my pitch.
At present, in conversations with overseas oncology businesses, the UK feels more cautious than competitive.
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Christopher Toms MA MAAT
Compliance Director
RandDTax