What drives company decisions on new medicine launches and UK investment?

In this piece, David Watson, ABPI Executive Director of Patient Access, discusses the findings of ABPI's 2025 Medicines Impact and Investment Survey, which aims to supplement existing data to understand and track how UK policy conditions influence company decisions, particularly on investment, workforce plans, and prioritisation of medicines launches. 

The challenge of research, development, and manufacturing of a new medicine is among the most complex and expensive endeavours performed by any business. Once the R&D challenges are met, companies must undergo rigorous regulatory oversight and assessment of the efficacy, safety, and cost-effectiveness of their products. When companies and regulators get this balance right, the benefits for patents are life-changing, and the economic dividends for the countries that host such innovation may be considerable.

As we entered 2025, it was clear the UK was not getting this balance right. A record-high newer medicine payment rate required by VPAG and internationally near-bottom value thresholds used to assess cost-effectiveness led to cancelled research and manufacturing investments, and new medicines that were launched elsewhere in Europe were not being brought to NHS patients in the UK. All pointed to a life sciences sector in trouble – the question was how much trouble, and what key factors were driving these problems.

This is why, in September 2025, the ABPI launched the Medicines Impact and Investment Survey (MIIS) [1]. This new industry-wide survey aims to supplement existing data to understand and track how UK policy conditions influence company decisions, particularly on investment, workforce plans, and prioritisation of medicines launches. These choices matter because they shape where R&D takes place, where clinical trials happen, and which treatments reach NHS patients.

This first survey is clearly a moment in time, conducted before the critical announcement of the UK/US pharmaceuticals deal, which included essential commitments to cap VPAG rates, raise the NICE threshold, and boost long-term medicines investment.

However, while much of the policy context has changed, the survey's insights remain relevant to how the future might look and will provide a baseline for reforms aimed at improving the UK commercial environment in the years to come.

What are the key factors shaping company decisions in the UK?
The MIIS survey makes two things very clear: nine in ten companies said the two most significant factors shaping their UK operations are high and volatile payments imposed by the government on medicines sales, and the cost-effectiveness thresholds used by NICE, both of which have had negative impacts on launch and investment in recent years.

These survey findings do not replace other kinds of macro data that we collect on pharmaceuticals R&D, but they do support the trends in these data, for example:

• On investment: over the past decade, global pharmaceutical R&D investment has increased by about 6.6 per cent year on year. Before 2020, the UK was keeping pace with that rate of growth. But post-pandemic, UK growth has only been about half that rate, showing a clear trend of stagnation and missed investment. [3]
• On launches: companies that reported launch impacts to the MIIS had approximately 20 per cent of their portfolio’s pipeline impacted, similar to the 25 per cent of non-launches seen in NICE’s data (accounting for non-recommendations of 8 per cent and terminated appraisals of 17 per cent). [4]

The MIIS data help explain the underlying factors driving companies’ decisions in early and mid-2025, and the extent to which these decisions are explicitly driven by UK policies.

In terms of investment, the volatile UK commercial environment has led to the pause or cancellation of over 10 significant projects in the last decade or so. [5]

When a big swing in net prices – for example, through changes to VPAG – reduces a company's expected revenues, it has few options but to adjust its UK operations, whether through cutting investment, planned partnerships, or headcount.

Another key factor is the crystallisation of uncertainty. Volatility in the VPAG rate, coupled with continued erosion in real terms of NICE’s baseline threshold, increased the risk associated with UK revenue while decreasing its overall potential. For example, four in five (79%) firms questioned in September 2025 said they had considered operational or investment reductions in the UK since January 2024. Among those who had discussed reductions, around three-fifths reported having already decided to cut, defer or cancel UK investments.

What impact does this have on the UK?
When companies explain what’s most at risk, clinical trials and wider R&D programmes are cited most frequently, with late-stage trials singled out because they require significant, multi-year commitments and depend heavily on pricing/reimbursement certainty.

On launches, the MIIS captures a clear shift in the UK’s place in global launch planning and explains why it is happening. Nearly two-thirds (62%) of companies said the UK’s position had deteriorated over the past five years, with some firms explicitly describing the UK as being deprioritised – a “second-wave market”. While low thresholds and high rebate rates are again cited as key factors, comparatively low uptake is also consistently mentioned.

Since January 2024, firms in the sample reported that 46 medicines had their UK launches of new active substances and new indications delayed, launched privately, or not launched at all. Of the 46 product launches impacted, around half will not reach NHS patients – either limited to private patients (n=17) or with no planned UK launch (n=7).

These launches are concentrated in oncology – an area where international benchmarking has repeatedly shown the UK trailing peers in survival rates for some cancers.[6] However, there are also many other therapy areas impacted, with just over half of the impacts accounted for by new active substances.

A number of these products offer a significant step forward in patient treatment or serve as a last line of care; any impediment to their launch is therefore concerning in itself. But companies also explain how launches lay the foundations for future investment – by ensuring that the standard of care in a country remains current so that it can be compared with new treatments. Similarly, for ethical reasons, firms are reluctant to run trials in countries where they may not be able to make the medicine available afterwards.

These factors mean that reduced launches create a self-perpetuating loop, reducing clinical trial activity, even as the government has made improving commercial clinical trials a central plank of its life sciences agenda. [7]

Conclusion
Taken together, the MIIS provides further evidence for what needs to change to support the government's ambition for the UK's life sciences sector.

It shows that the government is right to focus on addressing the stagnant NICE threshold and on addressing VPAG rates and their volatility. Companies consistently identify these two factors as being the most critical in shaping global investors' view of the UK.

The Prime Minister's confirmation that the UK will continue to swiftly implement these proposed reforms is welcome and vital for addressing uncertainty in the sector.[8] The government must continue to act decisively by laying out detailed plans to implement these proposals, with close engagement from the UK sector, to unlock new investment in the country and ensure NHS patients receive the best treatments.

Endnotes:
[1] ABPI, 'Medicines Impact and Investment Survey (MIIS)', 26 January 2026
[2] ABPI, 'UK-US deal is good news for NHS patients and will help to support UK life sciences competitiveness, says ABPI', 1 December 2025 
[3] ABPI, 'Creating the conditions for investment and growth', 10 September 2025
[4] VPAG Operational Review Metrics Pack (to be published shortly)
[5] ABPI analysis available upon request
[6] The Lancet, 'Global surveillance of trends in cancer survival 2000–14 (CONCORD-3): analysis of individual records for 37 513 025 patients diagnosed with one of 18 cancers from 322 population-based registries in 71 countries', 17 March 2018 
[7] UK Government, 'Life Sciences Sector Plan', 16 July 2025  
[8] In response to a question asked in the Q&A: The Guardian, 'Minister defends UK’s decision not to hit back at Trump tariffs threat, saying ‘aim is to de-escalate’ – as it happened', 19 January 2026