Five ways R&D contributes to the growth of the pharmaceutical industry

When it comes to research and development, the pharmaceutical industry has always been a massive player — now so more than ever as our health services work incredibly hard to combat COVID-19, reports Cale Bannister, Myriad Associates

Globally, vast sums of money are invested each year for everything from drug development to testing and packaging – all of which businesses can claim for.

Although drug development is an obvious R&D avenue to most companies, many still don’t realise that simply adapting or changing a manufacturing process for a drug is also likely to be eligible for R&D tax credits too.

The modern pharmaceutical market requires drugs to be in the hands of patients faster and cheaper than ever before ... but with regulatory requirements still being met. It’s a constant drive to balance speed and cost with high drug quality.

There’s a huge number of areas within this industry wherein R&D comes into play, but here we’ve selected just a few of them to consider.

Developing or adapting the manufacturing process: As is typical of any manufacturing process, drug production targets in terms of cost-effectiveness, wastage and quality must all be reached.

At the same time, it’s one of the most highly regulated industries on the planet, making regulatory compliance essential. Automation could make the manufacturing process quicker or improve technology that is already in use to make it faster and/or more efficient.

Focusing on the production of pharmaceuticals specifically, simply increasing production is not an option. Some chemicals, when mixed together, can negatively interact with each other when produced at different volumes, rates or in certain environments.

With that in mind, developing new machinery that can increase production by 50%, for example, will need to be tested rigorously to make sure that the chemical formulation stays intact and that the same high quality product is created at the end.

Size and taste matters: Obviously, the main purpose of a drug is to cure or manage the condition it was designed for.

However, these days the size, shape and taste of a drug is very important too. Many pharmaceutical companies are now innovating to cut the size of pills and to adapt their shapes whilst still meeting ingredient requirements. The development is particularly important for vulnerable groups, such as children and the elderly.

Taste also has a big impact on a patient’s experience of a drug, with many still being very bitter on the palate. This can again be a particular obstacle for vulnerable groups.

R&D is currently taking place to develop certain taste-masking technologies, such as the use of masking agents like sweeteners and flavourings. Some polymer coatings can also now be used to prevent the drug from coming in contact with taste-buds. Again, these advancements could all attract R&D relief.

The testing process: Patient safety is paramount in every aspect of pharmaceutical production, making rigorous testing and analysis essential before any drugs are released onto the market.

These tests often provide data that helps to ensure regulatory legislation across different global markets is adhered to.

Many companies perform customised testing for the pharmaceutical and medical industries, completing a broad variety of drug and device studies at each stage of production. Testing can involve both raw and active pharmaceutical materials as well as the end-stage products themselves.

Packaging development: The development of packaging in pharmaceuticals is another substantial area of R&D.

Companies essentially need to ensure that the products they offer retain their high-quality for as long as possible. This is not just an issue of preserving shelf-life but for security too. Public awareness around the use of sustainable materials and environmentally friendly production methods also means these factors should be taken into consideration when possible.

Choosing the right materials: Companies must work to strict regulatory demands whilst also looking to improve sustainability, speed up packaging manufacture and cut costs. When using a variety of different materials for their packaging, one of the greatest challenges can be in ensuring they bond together in the correct way.

Bonding certain plastics onto other plastics is especially difficult and requires a large amount of experimentation. This is just another area where qualifying R&D expenditure claims can be made for tax relief.

How to claim your own grant to support the pharmaceutical industry’s development

The pharmaceutical sector is a hotbed of R&D tax credit opportunities but there is also scope for numerous R&D grant funding too.

For R&D tax credit purposes for SMEs, it is vital to distinguish State Aid grant funding from other grant types. If a project is financed by a State Aid grant, even if it’s a very small one, it is not then able to benefit from an R&D tax credit claim under the SME programme.

For any other type of grant or subsidy, companies can receive SME relief for non-subsidised costs. Under the RDEC scheme for larger companies, this restriction on grant funding does not apply, so expenditure that cannot be included in an SME claim may qualify for a large company claim instead (although the RDEC scheme is less generous than the SME one).

This means that companies must consider carefully which scheme to use when applying for their R&D funding. It’s important that they weigh up the pros and cons of each grant type for their individual R&D projects to achieve the maximum financial benefit possible.

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