Drugmakers renew concerns over UK’s attractiveness for investment

UK Investment Climate for Pharmaceutical Industry

Key Concerns

• Pharmaceutical industry leaders warn that the UK's medicine levy makes the country "un-investable" 2
• Companies say the UK's economic growth plan will falter unless the government takes action to return payment rates to international competitiveness 2
• The new scheme's rates remain unaffordable and will have an enormous impact on medium-sized companies 2

Impact on Investment

• The UK has seen a declining share of global pharmaceutical R&D investment, falling from 4.9% in 2012 to 3.3% in 2020 1
• Last year was the first time since 2012 that the UK had no Initial Public Offerings (IPOs) in life sciences 4
• The value of estimated foreign direct investment in the UK fell by 21% year-on-year to £0.8 billion in 2023, following a £0.9 billion fall the previous year 3

Industry Reactions

• Leaders from companies like AstraZeneca, Johnson & Johnson, Roche, and others have expressed concerns about the UK's attractiveness for investment 2
• The Association of the British Pharmaceutical Industry (ABPI) calls for urgent action to address concerns and ensure UK competitiveness 23

Factors Affecting Investment Climate

• High clawback rates compared to other countries (UK rate now at 22.9% vs. Germany at 7% and Ireland at 9%) 2
• Challenging access environment for new medicines 2
• Slow uptake of new treatments and innovation in the NHS 3
• Regulatory changes and international competition among regulators 4

Potential Solutions

• Industry leaders call for government action to improve the investment climate 23
• Recommendations include increasing commercial flexibility in the NHS, supporting regulatory agencies, and reviewing vaccination policies 3
• Focus on delivering the government's life sciences strategy and industrial policy 13

The pharmaceutical industry warns that without addressing these concerns, the UK risks losing its position as a leading destination for life sciences investment and innovation.

Sources:

1. https://committees.parliament.uk/writtenevidence/133756/html/

2. https://www.abpi.org.uk/media/news/2025/march/medicine-levy-makes-the-uk-un-investable-say-pharma-leaders/

3. https://www.abpi.org.uk/media/news/2024/july/new-data-shows-uk-life-sciences-failing-to-reach-its-potential/

4. https://www.adalovelaceinstitute.org/resource/pharmaceutical-regulation-uk/