The UK must act to secure the future of UK life sciences and deliver for patients

The UK pharmaceutical industry stands at a critical juncture. For many years, this country has been proud of its reputation as a world-class centre for science, research, and medicine development. Britain is home to outstanding universities, a strong science base, and a national health system that provides a unique platform for innovation.

Yet, despite these strengths, the ABPI’s latest report shows that the environment for pharmaceutical companies is becoming more uncertain and increasingly challenging. If we want the UK to remain a leader in life sciences, we urgently need to confront these issues. Doing so will require investing more on innovative medicines and making some tough policy choices that ultimately must favour growth, and not further managed decline of the sector in the UK.

One of the most pressing concerns is the way in which medicine payment schemes have evolved. The rates at which companies are required to pay back a share of their revenues to government have risen sharply. Companies now face having to pay back as much as 23.5 per cent of their newer medicines sales, far beyond what happens in other European countries, which have rates closer to seven per cent on average.

The UK’s outlier status when it comes to such payback schemes and the level of unpredictability over future rates make long-term investment decisions incredibly difficult. Developing medicines is a process that takes years, even decades, and requires billions in capital. Without confidence in a stable pricing framework, firms naturally look elsewhere to invest in research, development and manufacturing.

Access to medicines for NHS patients is another area where the UK falls behind other countries. Far too often, new treatments reach people in the UK later than in comparable countries, or not at all. Just 37% of medicines in England are recommended for use in line with their license compared with 90% in Germany.  This represents a profound missed opportunity, not just for patients who need these innovations, but for the country’s reputation as a place where medical breakthroughs can be translated into real-world benefit.

Industry investment trends tell a sobering story. Foreign direct investment into UK life sciences has fallen dramatically, dropping by more than half between 2017 and 2023. Research and development spending here has also lagged behind global growth rates.

None of this reflects a lack of scientific excellence; it reflects a commercial environment that does not give companies enough confidence to commit their resources. Other countries are seizing the chance to attract investment by offering clearer, more supportive frameworks. Unless the UK takes action, we risk falling further behind.

Underlying all these issues is a tension that is difficult to resolve but essential to address: the balance between controlling costs for the NHS and ensuring that innovation is rewarded. Medicine budgets are understandably under pressure, but treating new medicines solely as a cost to be contained overlooks the wider picture. Innovative treatments often prevent future healthcare costs, keep people healthier for longer, and allow them to contribute more fully to society. When the system is too narrowly focused on short-term expenditure, we lose sight of the long-term economic and social value of innovation.

The stakes could not be higher, because the cost of underinvestment is already showing in patient outcomes. The UK is close to the bottom of the table for similar countries for treatment outcomes in preventable and treatable conditions. Those are the things we can and should do something about. By investing properly in innovation and creating the right environment for medicine development, not only can we improve survival and quality of life today but also build a long-term culture of prevention that delivers health benefits and NHS savings for generations to come.

Despite all these challenges, it is important to remember that the UK starts from a position of considerable strength. We have unparalleled research assets, such as the UK Biobank and the Our Future Health programme, that continue to attract global admiration. If we can resolve these acute commercial pressures, there remains the opportunity for these strengths to restore the UK as a magnet for investment.

What the sector needs now is a renewed partnership between industry and government. Payment schemes must be stabilised to give companies predictability. Investment in medicines should be seen as an investment in the health of the nation and the growth of the economy, not just as a line in the NHS budget.

The choice before us is stark. We can allow uncertainty and short-term thinking to erode our position, or we can take decisive steps to restore confidence, attract investment, and ensure that patients in the UK benefit from the very best in modern medicine. I believe that with strong leadership and genuine collaboration, we can build an environment where scientific excellence translates into better health, stronger economic growth, and a reinvigorated role for the UK as a life sciences leader.