UK tumbles down global rankings for pharma investment and research

A new Pharmaceutical Competitiveness Framework reveals that the UK is losing the race for investment in R&D, clinical trial delivery, and foreign direct investment, due to increasing drags on competitiveness.

‘Creating the Conditions for Investment and Growth,’ produced by ABPI in partnership with PwC, outlines the key factors that drive international competitiveness for pharmaceuticals, ranking the UK among its peers and highlighting the country's relative strengths and weaknesses [1].

In addition to the 48 competitiveness indicators used to benchmark the UK’s attractiveness compared to its peers across key investment factors, the Framework also presents concise summaries of the strengths and weaknesses of other countries competing for investment.

Since 2018, UK Pharmaceutical R&D investment has underperformed against global trends, with a significant slowdown starting in 2020, when UK growth fell to 1.9% per year, behind the global average of 6.6% annual growth. Pharmaceutical industry investment in R&D actually fell in 2023 by nearly £100 million.

Life sciences foreign direct investment into the UK was around 58% lower in 2023 (£795 million) than in 2017 (£1,893 million). The UK’s ranking among comparator countries fell from a high of 2nd in 2017 to 7th in 2023.[2]

The UK’s global ranking for commercial clinical trial placement has also declined steadily since 2018 among comparator nations, although there were small signs of improvement in 2023. Spain, in contrast, has established itself as the number one European destination for commercial clinical trials since 2020.

The ABPI’s new Competitiveness Framework clearly outlines the UK’s strengths, weaknesses, and areas of unrealised potential. It seeks to provide a common understanding of what drives company investment decisions to help identify where policymakers need to focus their attention if they want to win the race for globally mobile investment.

Richard Torbett, ABPI Chief Executive, said: “The UK has a world-class science base and the potential to lead globally in developing the next generation of medicines and vaccines. But without a more competitive environment for investment, we risk losing out to other countries making bold moves to attract internationally mobile investment.

“I believe UK has the potential to unlock billions in additional investment in early stage R&D, ensure patients and the NHS can benefit from access to cutting-edge clinical trials, and attract major capital investment in R&D and medicines manufacturing facilities - all of which directly support the government’s health and growth missions. But realising this potential requires industry and government working together to remove existing barriers and lean into areas of untapped strength. First and foremost, we need to create a commercial environment that rewards pharmaceutical innovation fairly and brings its benefits rapidly to UK patients.”

UK life science competitive strengths: 

• Academic institutions. 16 of the world’s top 100 universities for life sciences and medicine provide a deep pool of talent and expertise.
• World-class research infrastructure, such as the UK Biobank, the Francis Crick Institute, and the Laboratory of Molecular Biology, all providing specialist talent, equipment, research and analytical capabilities critical to the R&D process.
• Public and charitable spending on R&D. The UK ranks second for share of government spending on health R&D and joint third for charitable R&D funding.
• Robust protections for intellectual property (IP) underpin many of the UK’s strengths. A stable and strong IP framework is a baseline requirement for industry investment.
• Rich ecosystem of biotech companies, which ranks third globally and first in Europe. In 2024, UK universities produced 399 pharmaceutical spinouts, more than any other sector. Between 2017 and 2024, UK-based biotechs raised over $10 billion in venture capital, more than any other European country.

UK life science competitive weaknesses:

• Low investment in medicine. The UK invests around 9% of its healthcare spend in medicines, compared with 20% in Japan, 17% in Spain and 14% in Germany.
• Poor patient access to medicines. UK patients’ access to innovative medicines is poor, as just 37% of new medicines are made fully available for their licensed indications, compared to 90% in Germany. ABPI data shows that more than 60 medicines/indications did not launch in the UK or were delayed between 2019/20 and 2022/23.
• High and unpredictable clawbacks. High clawback rates on pharmaceutical companies’ revenues, at 23.5% on newer medicines in 2023, dampen investor confidence. Other European countries have much lower rates, such as 5.7% in France, and 7% in Germany.
• Poor clinical trial delivery. Between 2017 and 2023, the UK’s ranking for phase III industry trials fell from 4th to 8th, while its share of global recruitment fell to 2.6% in 2022, although there were small signs of improvement in 2023.

UK life sciences areas of unrealised potential:

• Health data and AI. The UK’s health data assets and expertise in AI are core assets that could attract further life sciences investment. The UK ranks among Europe’s top performers for secondary use of health data and is supplemented by world-class resources such as the UK Biobank. The UK is also a global leader in AI innovation, attracting £3.4 billion in private AI investment in 2025, behind only the US and China.
• Advanced therapies. While the UK conducts fewer total trials than some of its peers, it leads in advanced therapy R&D. UK cell and gene therapy (CGT) companies raised around £200 million of venture capital in 2023, which enabled the UK to initiate 47 CGT clinical trials in 2024. More generally, 9.5% of the world’s advanced therapy trials are recruiting patients in the UK, highlighting the country’s continued strength.
• Pharmaceutical regulation. The UK has faced significant challenges in meeting statutory regulatory processing timelines in the wake of COVID-19, the EU exit, and agency restructuring. However, there are signs of recovery, as steps are being taken to improve processing speeds. There is a clear opportunity to enhance the UK’s attractiveness to investors by building on these positive initial steps, particularly through the integration of digital and AI tools to further reduce friction.

Stakeholder reactions:

Russell Abberley, ABPI President and VP & General Manager Amgen Ltd, said: “I read ABPI’s Competitiveness Framework 2025 with mixed emotions. For it showcases the UK’s world-class strengths, of which I am fiercely proud, but also lays bare the urgent, unresolved challenges we must overcome if our sector is to realise its full potential.

“The UK has the key building blocks to be a life sciences powerhouse: world-class universities, renowned research capabilities, as well as Europe’s leading biotech infrastructure. Indeed, our sector contributes £17.6bn to the economy, supports 126,000 skilled jobs and delivers 17% of UK business R&D. However, the future remains uncertain, for we are losing ground in the international race to attract investment.

“Life sciences FDI dropped 58% between 2021 and 2023, with unrealistic clawbacks, outdated value assessments and slow adoption of innovation affecting investment decisions. Sustained commitment and decisive action are needed to tackle these issues. Only then can we unlock the full potential that a thriving life sciences ecosystem can deliver for both patients and the UK economy.”

Steve Hopkinson, Vice President & General Manager, AbbVie, UK, said: “As this new data shows, the UK life sciences sector’s inherent strengths are being undermined as other countries outpace the UK in securing global investment. Across our portfolio, we're investing in areas with high unmet need, in some cases, like oncology, where progress has stalled for decades. Falling behind on life sciences doesn’t just hurt the economy – it means fewer breakthroughs reaching UK patients, who deserve the same opportunity to access these innovations as patients across Europe.

“For government to achieve its ambition for the UK to be a top three global life sciences economy, as laid out in the Life Sciences Sector Plan, it must address longstanding underinvestment in innovative medicines and high clawback rates which continue to erode confidence in the UK.”

Tom Keith-Roach, President AstraZeneca UK, said: "New and innovative medicines are essential to improving patient outcomes and have huge potential to boost British economic growth and support delivery of the NHS 10 Year Plan. The Competitiveness Framework underscores the importance of investing in the next generation of medicines and pulling them through to the patients who can benefit.”

Vani Manja, Country Managing Director and Head of Human Pharma, Boehringer Ingelheim UK & Ireland, said: “The Government should work in partnership with the life sciences sector to establish a commercial environment that both appropriately rewards and accelerates the use of innovative medicines. This requires a bold, long-term commitment to increased investment across the NHS – not only in medicines, but also in disease prevention, early diagnosis, clinical research and digital infrastructure. Without this, the UK risks falling further behind its global peers in both health outcomes and economic competitiveness.”

Guy Oliver, General Manager, Bristol Myers Squibb UK and Ireland, said: "The evidence presented in today’s report is compelling. It provides the Government with richer and more up-to-date data on the UK’s rapidly declining international competitiveness and patient access to innovative medicines. Warning lights should be flashing across Whitehall.

"The critical question is whether the Government will respond with reform and funding that match the scale of the challenge. The UK has an opportunity to position itself as a global partner of choice for research and development, especially with companies like BMS, which have exciting and extensive pipelines reaching into areas of high unmet need such as neuroscience. But this opportunity will slip away if the Government does not urgently address the growth-limiting barriers our sector has consistently highlighted. These barriers are damaging patient access to innovation available in other countries, dampening investor confidence, creating broader contagion risks internationally, and restricting our ability to conduct trials in the UK."

Jordan Cummins, Chief Policy & Campaigns Officer, CBI, said: “It's essential that government and industry are on the same page about what genuinely influences investment decisions, and so benchmarking the UK's investment environment against our peers is a helpful starting point. If the Industrial Strategy Unit and Investment Minister incorporate data presentation approaches like this it can really help the policy debate.”

Roz Bekker, Managing Director UK & Ireland, Johnson & Johnson Innovative Medicine, said: “The UK is falling behind similar countries in how it values innovative medicines and what we are experiencing now is an environment that makes it harder for patients to benefit from the latest treatments. This includes patient access to cancer medicines in the UK, which is lower versus other European countries.

“The UK has the science, the institutions, and the history to be a leader in Life Sciences, but it needs more than ambitions, it must choose to be. Meaningful reform is needed to reverse decades-long underinvestment in medicines.  Johnson & Johnson supports and is committed to the UK government’s long-term Life Sciences vision, but with challenges such as the VPAG clawback rate and how the UK values innovation unaddressed, the UK’s global competitiveness, economic growth and most importantly, patient health outcomes, are at risk.”

Johan Kahlström, Country President & Managing Director, Novartis UK & Ireland, said: “The UK has long held the ambition to be a global leader in life sciences, and we continue to believe that this is within reach. 

"But ambition alone is not enough. The UK invests significantly less in medicines than our European peers, and the NICE cost-effectiveness threshold – unchanged in over 25 years – continues to block patient access to breakthrough treatments.

"Without bold action to modernise this system, the UK risks falling further behind in innovation, patient outcomes, and global competitiveness.

“This failure to act puts patients at risk of missing out on life-changing therapies, deepens pressures on the NHS, and threatens future investment and growth in one of the UK’s most vital economic sectors.

“We remain committed to working in partnership with Government to reset the UK’s approach and restore its position as a global leader in life sciences. The time to act is now.” 

John McGinley, Country President and Managing Director of Pfizer UK, said: “We are at a crossroads. Today’s investment and competitiveness framework comes at a critical moment in the history of the UK life sciences sector. Pfizer is proud to be at the heart of an industry adding more than £17BN in value to the UK and creating well over 100,000 jobs. We have a world-class community of life sciences people in this country. But this new framework makes a compelling call to action. Without a commercial environment for medicines that rewards innovation fairly and brings benefits rapidly to patients, our ambitions to deliver growth as a leading life sciences economy are in danger.”

Christopher Stokes, President and General Manager UK, Ireland & Northern Europe, Eli Lilly and Company, said: “The UK is currently an international outlier in life sciences competitiveness. There is great potential here, but we must see bolder action to address some of these critical factors that influence inward investment decisions. Lilly has recently paused a potential investment in the UK while we wait for more clarity on the UK environment. We are keen to see urgent action to reverse some of the recent decline in competitiveness.”

Kate Rowbotham, General Manager, Roche Products Ltd UK, said: "This report clearly shows the challenges and opportunities facing the UK Life Sciences Sector. While the UK has a world-class science base, its position as a top destination for global investment is precarious. The UK is being held back by significant structural barriers, such as unsustainable and unpredictable VPAG rates and delays in patient access to new medicines.”

“These barriers are fixable, and the UK's potential is clear. By working in partnership, industry and government can positively change the trajectory of these trends, creating a competitive commercial environment that secures the UK's future as a global leader in Life Sciences."

Rippon Ubhi, UK & Ireland Country Lead & General Manager Speciality Care, Sanofi, said: “The findings in this report paint a concerning picture for UK patients and our economy.  The UK is increasingly being viewed as ‘uninvestable’ in global boardrooms due to unprecedented clawback rates and restrictive patient access to medicines.  While other countries are actively investing in innovative medicines for patients, the UK is falling behind.”

Sharon Hall, Vice President and General Manager, Sobi UK and Ireland, said: “The UK stands at a critical crossroads in its ambition to be a global life sciences leader. There is no doubt that we have the necessary world-class talent, a world-renowned infrastructure and a vibrant ecosystem to enable us to be at the forefront of healthcare innovation. However, this report clearly sets out the challenges we face in the UK system, with long-term underinvestment in medicines hindering our ability to be globally competitive.

Decisive government action is now needed to address these barriers and unlock the UK’s full potential. It is critical that this starts with increasing the amount the UK Government spends on medicines, as a proportion of healthcare spend, to bring us in line with other developed countries. Only then can we start to deliver on our global leadership ambitions and importantly, secure better health outcomes for people across the UK.”

Şeyda Atadan Memiş, General Manager, Takeda UK and Ireland, said: “Our life sciences ecosystem has huge potential to deliver growth and better health outcomes to patients, but this won’t be realised without timely and coordinated action to strengthen the UK’s global competitiveness. Today’s report is a stark reminder that the government’s ambition - to make the UK a leading life science economy in Europe and globally - will not be achieved unless improvements are made to how we value innovation in the UK. 

“We were disappointed that talks with Government on the Voluntary Scheme for Pricing, Access & Growth did not result in the changes that would return the UK’s rebate rates to internationally competitive levels. That said, we remain committed to working with Government to find solutions that reverse the UK’s declining levels of investment, support the sustainability of the NHS and increase patient access to innovative medicines.

Nico Reynders, General Manager UCB UK & Ireland, said: "It is clear from this report that the UK is losing its edge as an attractive place to invest in biopharmaceutical research.

"This is most devastating for patients who are increasingly at risk of not being able to access innovative treatments available elsewhere in the world. But it is also detrimental for the wider UK economy which risks losing significant employment and investment, and not aligned with the government's ambition to make the UK a leading life science economy.

"We have such a great foundation to build on, it is imperative that industry and government work together to turn this around now before it's too late."