One week after warning that the U.K. is undervaluing life sciences manufacturing investments, trade organization the Association of the British Pharmaceutical Industry (ABPI) has issued another call to action for policymakers and the local biopharma scene.
The U.K. is lagging its peers when it comes to R&D investment, clinical trial delivery and foreign direct investment, the ABPI warned in a new report, attributing the issues to “increasing drags on competitiveness” in the country.
Since 2018, the U.K.’s pharmaceutical R&D investment has underperformed versus global trends, the ABPI said in its new Creating Conditions for Investment and Growth report. The situation culminated with a significant slowdown beginning in 2020, when local growth slowed to 1.9% per year versus a 2017-20 compound annual growth rate of 6.3%.
The ABPI based that metric on the CAGR of business investments in U.K. pharmaceutical research from 2017 through 2023, when the figure reached 8.7 billion pounds sterling. By comparison, the global CAGR for R&D investments across 12 comparator countries included in the report reached 6.6% over that same time frame.
Meanwhile, foreign direct investment into U.K. life sciences, and the country’s global ranking for commercial clinical trial placement, have also been in decline since the late 2010s, theABPI pointed out.
In turn, the U.K. must “double down on its strengths,” swiftly address “systemic weaknesses” and capitalize on areas of “unrealized potential” if it hopes to achieve its goal of becoming Europe’s top life sciences hub by 2030, Richard Torbett, Ph.D., chief executive at the ABPI, said in a foreword to the analysis.
The report, which serves as an investment competitiveness framework outlining both the U.K.’s strengths and weaknesses in life sciences, was produced by the ABPI in partnership with the accounting and consultancy firm PwC.
Aside from the U.K., the report also looked at biopharma investment trends in 12 competitor countries: Belgium, Canada, China, France, Germany, Ireland, Ital, Japan, Singapore, Spain, Switzerland and the U.S.
The U.K.’s key competitive weaknesses come down to its low investment in innovative drugs, poor patient access, high and “unpredictable” clawback rates on drugmakers’ revenue and poor clinical trial delivery, the ABPI said.
The proportion of healthcare spending the U.K. channels toward novel medicines is comparatively low, at a 9% average compared to countries like Japan and Spain, which spend about 20% and 17% of their healthcare budgets, respectively, on new drugs, the ABPI noted.
Patients’ ability to take those drugs is limited, as well, with the ABPI noting that just 37% of new drugs are made “fully available” for their licensed indications in the U.K. That compares to 90% of medicines that are made widely available in Germany, according to the report. The U.K. also has the second-lowest level of uptake three years after a medicine is approved among a group of seven countries, namely Canada, France, Germany, Italy, Japan, the U.K. and the U.S., the ABPI said.
All told, those “persistent, structural barriers” to patient access undermine the U.K.’s attractiveness to global biopharma investors, the trade group cautioned.
On clinical studies, the ABPI praised the U.K. government’s recent pledge to improve trial delivery in the country but caveated that “this level of ambition must be applied to addressing the U.K.’s other competitiveness challenges,” too.
The U.K. didn’t always struggle on trial delivery. In 2017, the country ranked 3rd, 2nd and 4th in the world for number of active phase 1, 2 and 3 trials, respectively, according to the ABPI’s analysis. But that clinical edge has “steeply declined” in the ensuing years, with the U.K.'s global ranking for late-stage studies dropping to 8th in 2023.
Limited capacity and slow trial set-up timelines are contributing to the issue, the ABPI said, noting that the U.K. now ranks 7th on its clinical trial infrastructure index and 8th in terms of clinical trial sites per million people.
The ABPI tracked the U.K.'s median clinical trial setup time at 273 days, which was faster than China”s but behind the U.S., Spain, France and Germany.
The limitations spotlighted by the ABPI aren't just conceptual, with several high-profile pharma companies pulling out of or reducing planned investments in the U.K. in recent years over related concerns.
Take local drugmaker AstraZeneca, which pulled a 450-million-pound-sterling investment at its Liverpool vaccine production site in January over the reduction of a planned financial contribution from the British government. Separately, AstraZeneca—which is one of the U.K.'s top companies by market cap—is plugging a staggering $50 billion into its U.S. operations by the end of the decade.
Meanwhile, hours before the ABPI issued its analysis, New Jersey drug behemoth Merck & Co. said it had scrapped plans to open a new U.K. headquarters and R&D facility in London that was slated to open in 2027.
Merck credited the decision to "challenges of the U.K. not making meaningful progress towards addressing the lack of investment in the life science industry and the overall undervaluation of innovative medicines and vaccines by successive UK governments," according to a statement obtained by Reuters.
Multiple stakeholders also expressed concern for the U.K.'s competitiveness in a follow-up to the ABPI's report.
Russell Abberley, the ABPI's president and general manager of Amgen U.K. and Ireland, said that he read the report with “mixed emotions.”
The analysis “showcases the UK’s world-class strengths, of which I am fiercely proud, but also lays bare the urgent, unresolved challenges we must overcome if our sector is to realize its full potential,” he said.
“The UK has the key building blocks to be a life sciences powerhouse: world-class universities, renowned research capabilities, as well as Europe’s leading biotech infrastructure,” Abberley continued. “However, the future remains uncertain, for we are losing ground in the international race to attract investment.”
Similar sentiments were expressed by executives at companies like AbbVie, Boehringer Ingelheim, Johnson & Johnson, Novartis and Pfizer, plus many others.
The ABPI’s report wasn’t exclusively critical, also highlighting core strengths of the U.K. biopharma scene that the government should leverage to attract more investment. Chief among those, the U.K. still ranks 2nd among its peers in terms of both top universities and research quality, providing an edge in preclinical endeavors, the ABPI noted.
The country also offers “robust” intellectual property protections, has a strong foundation in public and charitable spending on research and development and boasts a multifaceted ecosystem of biotech companies, ranking third globally and first in Europe on the latter metric.
In fact, in 2024, U.K. universities produced 399 pharmaceutical spinouts; and, between 2017 and 2024, U.K.-based biotechs raised more than $10 billion in venture capital, eclipsing their European peers, the ABPI explained.