AstraZeneca has reportedly raised the possibility of UK job cuts if the British government enforces a global levy targeting pharmaceutical profits.
The company’s concerns are part of a wider industry backlash against proposals to share profits from drugs developed using digital sequence information (DSI) from biodiversity. These proposals are under negotiation at the UN biodiversity summit, Cop16, in Cali, Colombia.
Proposed Levy on Digital Sequence Information
The concept of DSI refers to digital representations of genetic codes from natural sources.
Developing countries often possess vast biodiversity. They have expressed frustration over how the data is freely accessed by multinational corporations for commercial use without adequate compensation.
To address this, global leaders are considering implementing a one percent global levy on profits from goods derived from DSI. This levy is intended to fund conservation efforts worldwide.
For AstraZeneca, this proposed tax could cost the company up to $60 million annually, depending on the UK government’s approach to enforcement.
While the tax is technically voluntary, the UK government is contemplating compulsory measures for UK-based businesses.
Concerns Over Job Losses and UK Competitiveness
During a roundtable meeting with the Department for Environment, Food and Rural Affairs (Defra) on October 15, AstraZeneca allegedly suggested the levy could impact jobs in the North-West of England, particularly at its Liverpool-based vaccine research and manufacturing facility.
AstraZeneca later denied these comments were made by its representatives. It said it remains aligned with the broader industry stance expressed by the International Federation of Pharmaceutical Manufacturers & Associations (IFPMA).
The IFPMA, along with other industry groups, has voiced strong opposition to the proposed levy. I warns it could stifle innovation and harm competitiveness.
The Association of the British Pharmaceutical Industry (ABPI) echoed these sentiment. It stressed the risk of placing UK-based companies at a disadvantage compared to countries like the United States. This is because the US is not a signatory to the UN biodiversity agreement.
Richard Torbett, CEO of the ABPI, called the proposed compulsory levy a “poorly targeted and damaging response to a critical global challenge,” adding that it would hinder research efforts and impact public health advancements in the UK.
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AstraZeneca’s Stance and Global Implications
AstraZeneca has not directly threatened to move its operations but has shown alignment with industry concerns regarding the proposed profit-sharing measures.
The company made a £650 million investment in its UK operations in March, demonstrating its commitment to the region. However, the prospect of a new levy poses an added challenge to the industry.
Eva Zabey, Chief Executive of Business for Nature, emphasized the need to find a balance between conservation objectives and scientific progress.
She stated that businesses have a responsibility to contribute both financially and non-financially to using natural resources.
What’s Next?
Negotiations at Cop16 are expected to conclude soon, with international leaders attempting to strike a deal on how profits from genetic resources should be shared.
As the talks unfold, the pharmaceutical industry will be watching closely to see how any final agreements could impact their operations and competitiveness in the global market.
