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Drug innovation and Covid: How far have we come?

Emma Lewis, of Tax Cloud, assesses recent advancements in drug development and the role of tax breaks in supporting them.



As we’ve seen with the Omicron variant, vaccines – although very effective – are not the be all and end all in the fight against COVID. For various reasons, some countries simply haven’t been able to vaccinate people fast enough. In fact, in Africa only 13% of the population have had at least one COVID-19 jab. On top of that, vaccine effectiveness wanes over time. And we’ve all wondered, if I get sick – really sick – what treatments are there now?

Drug innovation

Anti-viral, anti-inflammatory and antibody therapies have been around for years. But it’s taken until now for scientists to understand how they work against COVID-19.

Each type of drug works slightly differently. Antivirals have proven particularly useful, as they help to stop the coronavirus duplicating itself in the body. Anti-inflammatories stop our own immune systems spinning out of control (with often fatal consequences), and antibody therapies work to mimic the coronavirus so the body will attack it.

In the world of medicines, some of these are relatively ‘simple’ and cheap to manufacture. Others are more innovative, with a price tag to match. They also each deal with variants differently.

Emma Lewis, Tax Cloud.

How anti-viral drugs work on COVID-19

Any virus will only take hold inside the body’s tissues if it can replicate. Anti-viral drugs stop this ‘copying’ from happening. Virus levels then stay low, making it easier for the immune system to kill the virus particles off.

At present, there are two main anti-viral drugs available for COVID treatment. One is called Molnupiravir and the other Paxlovid. Both should be taken as soon as symptoms become apparent.

There’s also Remdesivir, which was the first COVID-19 treatment to be approved. It’s been proven to slash COVID recovery time and is administered through a drip in hospital.

Do they make a difference?

Apparently so. The manufacturer of Molnupiravir, Merck, has said the drug will cut the chance of hospitalisation and death by around 50%.

Pfizer – the maker of Paxlovid – says its drug reduces the risk in vulnerable adults of hospitalisation and death by an impressive 89%. It comes in pill form and is taken two times a day for five days.

Sounds good – now what?

In November 2021, Pfizer said it expects to manufacture at least 50 million courses of Paxlovid by the end of 2022. It will also allow generic drug makers in 95 low-income countries to manufacture and distribute it at cost price. Merck is doing the same for 100 middle-and-low income countries.

How anti-inflammatory drugs work on COVID

When the body has detected a COVID-19 invasion, the immune system sends chemicals ready to attack. The problem is a by-product of these chemicals is inflammation, and if the virus isn’t dealt with quickly, the inflammation will start to damage vital organs. You effectively die because your own immune system is being too overzealous.

Dexamethasone is a drug that’s been around a long time as an anti-inflammatory steroid. However, for COVID patients it’s been found to cut the risk of death by a fifth for those on oxygen, and a third for people on ventilators. It’s cheap to produce too.

When do anti-inflammatories work best?

Later in the disease when the patient is clearly starting to struggle. However, there is an anti-inflammatory drug for asthmatics called Budesonide. This can be used just as symptoms emerge and is ideal for use by vulnerable people for a quicker recovery at home.

Antibody therapy

Antibody therapy was less commonly heard of by the public before the pandemic hit. Patients are given artificial COVID-19 antibodies, usually via an injection. It works by sticking to the surface of COVID cells and raising the flag for the immune system to attack it.

The other benefit with antibody therapy is that it can ‘teach’ the immune system how to identify and better attack the coronavirus next time, as well as how to make its own natural antibodies.

What antibody therapy drugs are available?

There are two currently being used by the NHS. They’re primarily reserved for extremely ill patients who aren’t making their own antibodies effectively.

The first is made by GSK and is called Sotrovimab. It works by reducing the risk of hospitalisation and death in people over 12 by as much as 79%. You’ve then got Ronapreve, manufactured by Regeneron and Roche, which cuts the amount of time people need to stay in hospital, and the chances of them dying.

“Treatments like Sotrovimab, Molnupiravir and Paxlovid could lead to a new strategy in 2022: tackling COVID-19 soon after infection to prevent severe symptoms from developing.”New Scientist

No one knows how long the COVID-19 pandemic will last, but new advancements in vaccines and treatments are constantly being made.

And their ongoing progress could be aided, in the UK, by R&D tax relief.

Millions of pounds have been invested in UK research and development throughout the pandemic.

Whether it be into new drugs, treatments, therapies or even designing new ventilators, COVID-19 has brought about innovation on a spectacular scale.

Any UK company that has invested in solving a technological or scientific uncertainly (whether related to COVID or not) can claim R&D tax credits towards the cost.

As much as 33% of all eligible costs can be reclaimed, either as a reduction in corporation tax or as a cash credit. It’s incredibly generous.

Although the R&D Tax Credits scheme certainly lends itself heavily towards medical and manufacturing R&D, any company in any sector can actually make a claim.

The healthcare sector is a huge R&D tax relief claimer.

With millions more being injected into further home-grown research and development, the odds are in our favour of more drug innovation in the months and years ahead.

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