The UK is ‘losing the race’ for investment in R&D, clinical trials, and foreign direct investment, a report published by the Association of the British Pharmaceuticals Industry (ABPI) warns.
Since 2018, UK pharmaceutical R&D investment has underperformed against international rivals, according to the report published with consultants PwC. It points to a “significant slowdown” starting in 2020, when UK growth fell to 1.9% per year, behind the global average of 6.6%: pharma industry investment in R&D fell in 2023 by nearly £100 million.
The ABPI report found that life sciences foreign direct investment into the UK was around 58% lower in 2023 (standing at £795 million) than in 2017 (when it was at £1.9 billion). This saw the UK tumble down international rankings from a high of second in 2017 to seventh in 2023.
The UK’s global ranking for commercial clinical trial placement has also declined steadily since 2018: Spain has been the top European destination for commercial clinical trials since 2020.
“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,” said ABPI chief executive Richard Torbett.
Torbett said the UK has the potential to unlock billions in additional investment in early stage and medicines manufacturing facilities, but that will require 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,” he said. Still, the outlook is not necessarily gloomy; the APBI report notes that the UK’s life science strengths include 16 of the world’s top 100 universities for life sciences and medicine plus world-class research infrastructure, such as the UK Biobank, the Francis Crick Institute, and the Laboratory of Molecular Biology. The UK ranks second for share of government spending on health R&D and joint third for charitable R&D funding and has the third biggest biotech company ecosystems – and just last year UK universities produced 399 pharmaceutical spinouts.
However, it also notes that the UK invests around 9% of its healthcare spend in medicines, compared with 20% in Japan, 17% in Spain and 14% in Germany. UK patients’ access to innovative medicines is also poor. It also warns that high clawback rates on pharmaceutical companies’ revenues, at 23.5% on newer medicines in 2023, dampen investor confidence. The UK’s ranking for phase III industry trials fell from fourth to eighth, while its share of global recruitment fell to 2.6% in 2022.
The ABPI said one area of potential growth is in advanced therapy R&D: UK cell and gene therapy companies raised around £200 million of venture capital in 2023, which enabled the UK to initiate 47 clinical trials in this space 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.
Christopher Stokes, president and general manager UK, Ireland & Northern Europe, Eli Lilly, 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.”
The UK is falling behind similar countries in how it values innovative medicines and said meaningful reform is needed, said Roz Bekker, managing director UK & Ireland, Johnson & Johnson Innovative Medicine. “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,” Bekker said.
Further reading on pharmaceuticals innovation
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