GLAXO SMITH KLINE, the pharmaceuticals company, is contemplating a huge increase in the amount it spends on research and development — perhaps even doubling its £2.8 billion-a-year budget.

The company now spends about 15% of its annual sales on research and development, but chief executive Jean-Pierre Garnier believes that a big increase in this could accelerate the company’s pipeline of new medicines.

Tachi Yamada, head of Glaxo’s R&D, said: “J-P believes we should spend more on R&D, not less. Smaller companies will often spend 25 or 30% of their sales. There’s no magic rule that says it should be 15%.” Yamada added: “Could I figure out how to spend (double the existing budget)? I would say yes.”

Glaxo is not planning any dramatic increase in spending in the immediate future, and would link any rise to improvement in R&D productivity.

However, Garnier and Yamada are encouraged by a better performance in the group’s drugs pipeline since Glaxo Wellcome merged with SmithKline Beecham in 2000.

“We were viewed as having the worst pipeline in the industry,” said Yamada. “The perception is that we now have one of the best.”

Glaxo’s most promising forthcoming products include Cervarix, a vaccine for cervical cancer, and Entereg, which is a treatment for bowel problems.

Yamada is also excited about the recently launched Bonviva, for osteoporosis, and Requip, now approved for restless leg syndrome, which he said was a widespread problem that caused many people to lose sleep.

Garnier said: “We have proved that we can raise the productivity of our investment in R&D. I would love to increase that investment. I want this company to be more R&D-intensive.

“We are attempting to gradually increase the number of R&D projects we pursue in the world.”

Yamada has broken up his vast R&D organisation into smaller “centres of excellence for drug discovery”, each focused on a therapeutic area.

Glaxo is also looking to save hundreds of millions of pounds by conducting more of its clinical trials outside America and the developed world.

Yamada said: “You can do studies of equal or better quality in eastern Europe, Asia or Latin America at maybe 10% of the cost.

“A lot of physicians in Asia are US-trained and often working at the best hospitals.”

Glaxo has already run successful trials in Peru and India.

Yamada said Glaxo’s recent success in generating new products internally made a merger — such as the much-touted deal with Astra Zeneca — less attractive.

He said: “I think it would have to be a really good-value proposition. I don’t know that a merger is inevitable. I think a merger that does not enhance the pipeline could be valuedestroying.”