I recently came across an article from bloomberg.com titled “Drug-Price Decision Threatens U.K. Investment, Industry Says”. I found this very interesting from an investment perspective – let me explain.
The article begins:
Pharmaceutical companies are protesting a U.K. government decision on drug pricing that their lobbying group says may prompt more of them to scale back operations in Britain.
I believe that this isn’t solely down to pricing however.
The Department of Health told drugmakers May 19 it was ending a deal that allowed some of them to increase prices to make up for money they lost when a previous agreement was suspended in 2007. The Association of the British Pharmaceutical Industry objected to both the decision on the accord, known as the Pharmaceutical Price Regulation Scheme, and the refusal to share information showing how it was reached.
Switzerland’s Novartis AG (NOVN) and New York-based Pfizer Inc. (PFE), two of the world’s biggest drugmakers, said this year they plan to scale back U.K. operations. Prime Minister David Cameron said in January he personally called the heads of pharmaceutical companies to urge them to continue investing, pointing to tax breaks he was offering. The ABPI said the Department of Health’s move undermined that effort at a time when the government aims to replace the 54-year-old drug-pricing system.
The amount of red tape that exists in the UK, for UK based business – let alone for an overseas business operating here is constricting. Just trying to get VAT registered is hard enough. We should be looking at making it easier for companies like Switzerland’s Novartis AG (NOVN) and New York-based Pfizer Inc to stay in the UK. Their presence here not only will help to rebuild the economy; while arguably on the exist of a recession, but also create a wellness for overseas companies who are looking at expanding their operations, and considering the UK, as well as say Germany.
Tags: International corporate structure, uk business, UK Inward Investment, UK news
