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Medical Assistance

Volume 406: debated on Tuesday 10 June 2003

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To ask the Minister of State, Department for International Development what use has been made of the tax measures introduced in the 2002 Budget to encourage private sector research and development of new treatments for HIV/AIDS, TB and malaria in developing countries and responsible donations of medical supplies and equipment to developing countries. [117755]

The UK Government are committed to significantly improving access to medicines in developing countries. We need to tackle all the key factors affecting access if we are to make lasting improvements.The factors recognised by the World Health Organisation (WHO) that can improve poor peoples' access to medicines are: affordable pricing, sustainable financing, reliable health and supply systems, and the rational selection and use of existing drugs.Clare Short chaired a High Level Working Group on Increasing Access to Essential Medicines in the Developing World, which examined these factors in detail and made a series of recommendations for action in its report of November 2002. Officials across Whitehall are taking forward these recommendations with stakeholders.One recommendation was to encourage companies to increase Research and Development into medicines and vaccines for diseases prevalent in developing countries, namely TB, malaria and relevant strains of HIV/AIDS, taking forward implementation of the R&D tax credits announced in the budget. The special tax relief for companies developing drugs and vaccines for TB, malaria and HIV/AIDS applies to expenditure incurred on or after 22 April 2003. As it is claimed by companies when they complete their tax returns, which they can submit up to 12 months after the end of the accounting period in question, the Inland Revenue do not yet have any information on claims.Section 55 of the Finance Act 2002, which provides relief from any possible tax penalty on donations of drugs and equipment abroad, is a deregulatory measure which requires no claim by the donor. Accordingly, the Inland Revenue keeps no record of the amounts involved.