In a U-turn for the firm which cancelled investment in Britain last year, the investment comes on the back of the publication of the US-UK Pharmaceutical Pricing Arrangement.
The tide may be turning on pharmaceutical investment in the UK as British pharmaceutical firm AstraZeneca has said it will invest £300 million into UK drug development in what prime minister Keir Starmer has called a “major vote of confidence”.
The news comes hot on the heels of the announcement from German pharmaceutical group Boehringer Ingelheim that it plans to invest around £150 million over the next ten years to expand its AI capabilities in pharmaceutical research and development.
It is a very welcome U-turn for the firm, which comes after AstraZeneca announced in February last year that it had halted a planned £450 million investment in Speke after the government pulled back from the previous government’s offer of support.
“Today I can announce a significant new investment by AstraZeneca, investing £300 million in UK life sciences, made possible by the pharmaceutical arrangement we have struck with the US, to futureproof thousands of jobs in Macclesfield and in Cambridge,” the prime minister said at Prime Minister’s Questions.
“That is a major vote of confidence in the UK and Labour’s plans to strengthen our economy,” he added.
“We would like to thank the British government for their efforts to improve access for patients, including four new approvals since the beginning of the year across the UK. And we look forward to further enhancing the access and the reimbursement environment and building a strong life sciences sector,” said AstraZeneca chief executive Pascal Soriot in response, adding that the investment included a lab of the future that will use digital and data tools to advance drug development.
Cost to the taxpayer
This is the second major pharma inward investment of this kind since the publication of the final text of the US-UK Pharmaceutical Pricing Arrangement.
It is easy to be cynical about the sudden attractiveness of Britain to international pharmaceutical manufacturers.
UK pharmaceutical exports to the US will enter the US completely tariff-free, for at least three years. This makes the UK the first country in the world to secure 0% tariffs on pharmaceutical exports to the US.
The government claims that the partnership also accelerates NHS patients’ access to new medicines. Under the deal, it says that pharmaceutical companies have stronger incentives to launch innovative treatments in the UK, meaning patients can benefit from new cancer therapies, rare disease treatments, and other breakthrough medicines sooner.
At the same time, the UK has also secured preferential terms for medical technology.
But there is no getting away from the cost to the British taxpayer of caving in to US president Donald Trump’s demands.
The Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG) headline payment percentage – the rebate pharmaceutical companies pay on branded medicines sold to the NHS – will be capped at a maximum of 15% until the end of the current scheme, which expires at the very end of 2028.
As Healthcare Today has noted before, it is a move that will see the UK pay 25% more for new medicines and cost the NHS and British taxpayers an additional £3 billion a year.
