After a torrid 2025, pharmaceutical companies are starting to invest in the UK again thanks to a combination of short- and long-term policy commitments. 

Since September last year, the global pharmaceutical industry has committed an additional £2 billion of investment into the UK, spanning the value chain from AI-enabled discovery science to large-scale medicines manufacturing.

These investments have been made possible through collaboration between industry and government, alongside a combination of short- and long-term policy commitments, including an increase to the baseline cost-benefit threshold used by NICE and a commitment to increase UK investment in innovative medicines to 0.6% of GDP. 

As Healthcare Today reported at the end of last year, under pressure from the White House, the government cut the payment rate for newer medicines under the Voluntary Scheme for Branded Medicines Pricing and Access. The payment rate for newer medicines under the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG) has been slashed to 14.5% from 22.9% last year.

“A year ago, the UK was losing ground in the global race for pharmaceutical investment. Today, the picture is more hopeful,” said Association of the British Pharmaceutical Industry (ABPI) chief executive Richard Torbett. 

“Through a real partnership between government and industry, we have started to turn a trend of disinvestment into one of green shoots,” he added. 

High-profile recent deals include a £300 million backing from AstraZeneca to support operations in Cambridge and Macclesfield using artificial intelligence to discover new drugs, and Moderna opening an innovation centre in Oxfordshire with a £1 billion UK research and development investment commitment spanning the next decade.

Core competitive strengths 

In a new report, the ABPI has set out the UK’s attractiveness as a destination for global pharmaceutical investment against 12 leading markets, using more than 40 international metrics. 

The report finds that the UK has retained its core competitive strengths, but several are at risk of erosion. 

The UK’s science base, domestic talent, and intellectual property policy framework remain globally competitive. Yet these structural capabilities take years to rebuild once lost, and international competitors are closing the gap. 

The UK has fallen behind in the quality of its research output as China extends its lead, and the proportion of UK students graduating in the natural sciences, mathematics, and statistics has declined.

The UK is, however, making progress on the weaknesses that were deterring investment. Government commitments, the ABPI says, have begun to address the UK’s narrow access to, slow adoption of, and underinvestment in, innovative medicines, as well as high clawback rates on company revenues.

“Investors make decisions that play out over decades, and they are watching closely to see whether the UK delivers on the commitments it has made. The task now is to provide and proceed along a clear, reliable roadmap to delivery so companies can invest with confidence. Get this right, and the UK can unlock tens of thousands of high-value jobs, billions of pounds of growth, and faster access to new medicines for NHS patients,” said Torbett.