UK pharma investment and R&D rankings decline as global competitors surge ahead
The UK has tumbled down the global rankings for pharmaceutical investment, research and development (R&D), and clinical trial delivery, according to a new Pharmaceutical Competitiveness Framework published by the Association of the British Pharmaceutical Industry (ABPI).
The report, titled Creating The Conditions For Investment And Growth, benchmarks the UK against global peers using 48 competitiveness indicators and highlights key strengths, weaknesses, and areas of unrealised potential in the life sciences sector.
Since 2018, UK pharmaceutical R&D investment has consistently underperformed against global trends. Growth slowed sharply in 2020, falling to just 1.9% per year compared to the global average of 6.6%. In 2023, R&D investment in the sector actually declined by nearly £100 million.
Foreign direct investment (FDI) has also taken a hit, with life sciences FDI in 2023 dropping 58% to £795 million compared with £1.89 billion in 2017. This has caused the UK’s ranking among comparator nations to fall from 2nd place in 2017 to 7th in 2023.
Decline in clinical trial delivery
The UK has steadily lost ground in commercial clinical trial placement since 2018, although there were small signs of recovery in 2023. Spain has emerged as the top European destination for commercial clinical trials, surpassing the UK in attracting global pharma investment.
Strengths of UK life sciences
Despite these challenges, the UK retains a strong life sciences ecosystem, powered by:
- Academic excellence: 16 of the world’s top 100 universities for life sciences and medicine.
- World-class research infrastructure: UK Biobank, the Francis Crick Institute, and the Laboratory of Molecular Biology.
- Strong IP framework: Robust intellectual property protections that provide investor confidence.
- Vibrant biotech ecosystem: Leading Europe in biotech spinouts and venture capital funding, raising over $10 billion between 2017 and 2024.
Key weaknesses threatening competitiveness
- Low medicine investment: The UK spends just 9% of its healthcare budget on medicines versus 20% in Japan.
- Poor patient access: Only 37% of new medicines are fully available for licensed use, compared with 90% in Germany.
- High clawbacks: A 23.5% revenue clawback on new medicines in 2023 has created investor uncertainty.
- Falling clinical trial participation: Phase III trial rankings fell from 4th to 8th between 2017 and 2023.
Opportunities for growth
ABPI identifies major opportunities for the UK to reclaim its competitiveness, including leveraging its world-leading health data assets, expanding AI adoption in drug discovery, and accelerating regulatory processing times post-Brexit.
Richard Torbett, ABPI Chief Executive, emphasized that collaboration between industry and government is essential:
“The UK has a world-class science base and the potential to lead globally in developing the next generation of medicines and vaccines. But without a more competitive environment for investment, we risk losing out to other countries making bold moves to attract internationally mobile investment,” he said.
ABPI calls for policies that reward pharmaceutical innovation, expand patient access to medicines, and improve trial efficiency, enabling the UK to once again become a preferred destination for global pharma R&D investment.
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