The UK has been hit with a “double blow” assessment from a senior pharmaceutical executive, who described the country as both an “expensive place to operate” and a “terrible place to sell medicines.” This combination of high costs and low returns is at the heart of the industry’s decision to scale back investment.
The “expensive” nature of the UK, from labor to facilities, is a long-standing issue. However, it was previously offset by the country’s strong scientific base and a functioning market. Now, the “terrible” sales environment—caused by low NHS spending, outdated NICE rules, and high clawbacks—has tipped the balance for many companies.
This toxic combination is what prompted MSD to abandon its £1bn London research center, a project whose costs could no longer be justified by the potential returns in the UK market. It is also why Sanofi has cut its clinical trials by half and is pausing any further major spending.
To fix this, the government must tackle both sides of the equation. While it can do little about some operating costs, it has direct control over the sales environment. The industry is urging ministers to reform pricing and spending policies to make the UK a place where innovation is rewarded, not penalised.
