The UK government faces mounting pressure to address a decade-long decline in NHS spending on medicines as major pharmaceutical companies pull back significant investments in the country. Science minister Lord Patrick Vallance, a former GlaxoSmithKline (GSK) executive, told parliamentarians that reversing this trend is a critical priority, emphasising the need not just for increased drug pricing but also for faster access to innovative medicines across the UK. Declining investment in life sciences has spurred companies like Merck and AstraZeneca to cancel or pause multi-million-pound projects, raising alarms about the UK’s competitiveness in the sector.

Merck announced it would abandon a £1 billion research centre plan in London, resulting in 125 job losses and withdrawal from key scientific hubs such as the Francis Crick Institute. The company cited the UK’s failure to make meaningful progress on investment and the undervaluation of innovative medicines as primary reasons for this decision. Similarly, AstraZeneca recently paused a £200 million laboratory project in Cambridge and scrapped a £450 million vaccine manufacturing investment in Speke amid reduced government support. These moves compound concerns that the UK is losing ground to countries like the US, Belgium, Ireland, Singapore, and Germany, which are currently viewed as more favourable for pharmaceutical R&D.

Lord Vallance identified that NHS spending on medicines has declined as a proportion of total healthcare expenditure since 2015 but indicated that the government plans to reverse this, raising the share above the current 9%. Speaking to the Commons science committee, he said the issue extends beyond price negotiation—improving rapid uptake and equitable access to cutting-edge treatments is equally vital. Vallance called for closer integration between the Medicines and Healthcare products Regulatory Agency and the National Institute for Health and Care Excellence (NICE) to streamline drug approval and availability.

Dr Zubir Ahmed, the new health under-secretary and a Scottish surgeon, also acknowledged the need for revised pricing models that better reflect the economic and clinical value of advanced therapies, which tend to be more expensive. Despite stalled formal negotiations between government and pharma industry representatives over medicine pricing mechanisms, ministers continue to engage in “lots of discussions” to improve the commercial environment.

The industry warns that ongoing uncertainty and the recent collapse of drug pricing talks have precipitated this investment retrenchment. Ben Lucas, Merck’s UK head, expressed regret over the withdrawal and emphasised the company's commitment to collaborations in the UK, while AstraZeneca’s UK president Tom Keith-Roach described government engagement as “highly constructive” despite current difficulties. The Association of the British Pharmaceutical Industry highlighted that the prevailing environment risks pushing more investment abroad.

Amid these UK challenges, GSK is planning to invest $30 billion in the United States over five years, focusing on research, development, supply chain infrastructure, and digital technologies. This initiative is viewed partly as a strategic response to potential US pharmaceutical tariffs and aims to bolster transatlantic life science cooperation.

Speculation has arisen about whether pharma companies' coordinated scaling back in the UK is intended to pressure the government for more favourable terms. An unnamed senior official suggested that the timing and similarity of announcements from major firms like Merck, AstraZeneca, and Eli Lilly—who recently hiked UK drug prices—could be a deliberate tactic, though it might also reflect companies responding similarly to market conditions.

Overall, these developments represent a significant challenge to the UK’s ambition to remain a global biotechnology and pharmaceutical hub. Merck's decision to shift research focus to the US aligns with a broader trend of investment migrating away from the UK, with foreign direct investment in UK life sciences reportedly falling 58% between 2017 and 2023. The government’s response in balancing fair pricing, industry incentives, and public healthcare needs will be decisive in determining the future trajectory of the UK's life science sector.

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Source: Noah Wire Services