The UK’s policies for pricing and purchasing new medicines are outdated and uncompetitive, forcing major pharmaceutical companies to scale back their British operations. Industry leaders are demanding a complete overhaul, citing pricing thresholds that have not moved since 1999 and a revenue “clawback” rate that is far higher than in other European countries.
This policy stagnation has created a hostile environment for innovation, according to Paul Naish of Sanofi, who called the UK “not a good place” for drug development. His company has cut its clinical trials by 50% and is holding back on further investment, waiting for the government to create an internationally competitive framework.
The consequences of inaction are already being felt. The sector was shaken by MSD’s announcement that it was abandoning its £1bn research hub in London. The decision by Eli Lilly to pause its London lab project further signals that the UK is losing its edge as a premier destination for life sciences.
The Association of the British Pharmaceutical Industry (ABPI) is leading the call for reform. It wants the NICE price thresholds updated in line with two decades of inflation and the clawback rate reduced to single digits. The industry’s message to the government is clear: modernize the system or watch as more investment, research, and jobs go elsewhere.