The UK’s pharmaceutical sector yesterday warned that its pivotal role in economic growth was under threat, after the government rejected its calls for financial support and tax incentives to promote research and development.

In its official response to an industry-supported report on the life sciences, the Department for Business Enterprise and Regulatory Reform yesterday ruled out calls for new tax credits and deferred demands for additional funding.

Peter Mandelson, the business secretary, accepted some calls for regulatory reform sought by the medical biotechnology industry, which he stressed was one of the sectors “with the key attributes to play a leading role in driving our economy in the future”.

However, he stopped short of following many of the recommendations made in the report, called Bioscience 2015 and chaired by Sir David Cooksey, the venture capitalist, which was submitted at the start of this year.

Mr Mandelson supported plans to double the number of NHS patients in clinical trials, but said it would take place over five years rather than within three as industry had sought.

He also deferred questions about whether and in what way fresh funding would be made available to the sector following the creation of a £750m Strategic Investment Fund unveiled in last month’s budget, and through potential tax incentives to encourage large pharmaceutical companies to support UK based biotech companies.

Clive Dix, chairman of the BioIndustry Association, the trade body behind the report, said: “We do not feel that the government’s responses have gone far enough, and are particularly disappointed that the issue of access to finance has not been addressed at this critical time.”

He called “extremely disappointing and gravely concerning” the rejection of tax incentives for research and lack of clarity over its new fund.

“Without government support in this area, the government’s own vision for ”the medical biotechnology industry . . . to play a key role in driving our economy in the future” is not achievable.”

He added: “The realisation of the vision that Government articulates again today depends on clarity on funding as soon as possible. We are in a critical period where detail and specifics are everything.”

Richard Barker, director general of the Association of the British Pharmaceutical Industry, the trade body for large drug makers, said: “Major global businesses see the UK as a promising source of bioscience and are keen to invest to help it blossom to develop new medicines for patients. At the moment however, too much of this investment is being attracted overseas.”

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