Britain’s life sciences sector has been thrown into crisis after major pharmaceutical firms paused or cancelled nearly £2 billion in planned UK investments this year, sparking warnings of patient “suffering” as ministers prepare for talks with US President Donald Trump over drug pricing.
The turmoil began when American drugmaker MSD announced it would scrap its £1bn London research centre. Within days, AstraZeneca revealed it was halting a £200m expansion of its Cambridge facilities. These blows followed the cancellation of AstraZeneca’s Liverpool vaccine site project and a shelved Eli Lilly lab in London. Together, four projects worth more than £1.7bn have been lost or frozen in 2024.
Since 2022, 13 major projects or company decisions have hit the UK pharma industry, including site closures and stock market exits. Drug companies argue the government is failing to spend enough on new medicines, claiming Britain undervalues innovation and discourages investment.
The crisis will come under the spotlight when MPs on the science, innovation and technology committee question MSD’s UK and Ireland managing director Ben Lucas, AstraZeneca UK president Tom Keith-Roach, and Association of the British Pharmaceutical Industry chief executive Richard Torbett. Science minister Lord Vallance, a former GSK executive, will also give evidence.
Diplomatic pressure has added to the row. According to the Financial Times, US ambassador Warren Stephens recently urged chancellor Rachel Reeves to offer a better pricing framework, ahead of Trump’s visit to the UK this week. Trump has long criticised other nations for “freeloading on US innovation”, while US firms have faced accusations of “price gouging” at home.
Industry leaders are warning of a mounting human cost. Guy Oliver, the UK head of Bristol Myers Squibb, told the Times: “There is a human cost to all of this. Patients are really suffering, and have been suffering for many, many years now.” He revealed the firm had cancelled 34 NHS partnerships in the past year due to “chronic underinvestment”.
The government’s voluntary scheme for branded medicines pricing, access and growth remains a key flashpoint. Pharma companies currently pay back 23.5% of UK revenues on newer medicines, a clawback rate they say is “unsustainable” compared with lower levels across Europe. Negotiations to reform the scheme broke down in August when health secretary Wes Streeting’s “generous” offer was rejected.
The fallout is being felt across the sector. MSD confirmed it will discontinue all UK research and development, leaving 125 scientists at the Francis Crick Institute and London BioScience Innovation Centre without jobs. Eli Lilly has also put its £279m London Gateway Lab on hold, citing a lack of clarity over the UK’s life sciences environment. AstraZeneca has already abandoned a £450m Liverpool vaccine expansion after failing to agree on state support.
French giant Sanofi’s UK head of market access, Paul Naish, warned: “This is an intolerable situation for too many \[patients] in this country and that is why government needs to work with the sector.” Meanwhile, Swiss drugmaker Novartis is holding off new investments, having already cut its UK footprint from seven sites and 4,000 staff to just one London base employing 1,200.
Despite the uncertainty, some global firms remain committed. Germany’s BioNTech has confirmed its £1bn, decade-long partnership with the government is progressing, with cancer immunotherapy trials already treating hundreds of patients. US biotech Moderna also opened a new vaccine manufacturing site in Harwell, Oxfordshire, in May.
The mounting investment freeze underscores the scale of the challenge facing ministers as they seek to balance fair pricing with Britain’s future as a global hub for pharmaceutical innovation.
