{"id":105,"date":"2025-10-03T13:54:40","date_gmt":"2025-10-03T12:54:40","guid":{"rendered":"https:\/\/blogs.imperial.ac.uk\/csep-and-telecoms\/?p=105"},"modified":"2026-03-31T10:36:12","modified_gmt":"2026-03-31T09:36:12","slug":"is-the-uk-biopharma-sector-at-risk-of-sleepwalking-into-decline","status":"publish","type":"post","link":"https:\/\/blogs.imperial.ac.uk\/csep\/2025\/10\/03\/is-the-uk-biopharma-sector-at-risk-of-sleepwalking-into-decline\/","title":{"rendered":"Is the UK biopharma sector at risk of sleepwalking into decline?"},"content":{"rendered":"<p><strong>Author:<\/strong> James Barlow<\/p>\r\n<p>For years, the UK has traded on its reputation as a \u201clife sciences powerhouse.\u201d This narrative isn\u2019t entirely false: we have world-class universities, our basic science is strong, and the NHS provides a unique testbed for clinical research. Yet behind the rhetoric, the biopharma sector is facing real and immediate challenges.<\/p>\r\n<p><!--more--><\/p>\r\n<p>Global pharma companies \u2013 including Merck, AstraZeneca and Eli Lilly \u2013 have recently announced plans to pause or withdraw R&amp;D and manufacturing investment from the UK. Promising British start-ups are often sold overseas before they can scale. Access to innovative drugs is often slower than comparable countries.<\/p>\r\n<p>Unless government and industry change course, the UK risks becoming a country that generates world-class ideas and early-stage companies but leaves others to capture the economic and health benefits. Innovative drugs will take longer to reach NHS patients. Manufacturing jobs and investment will migrate abroad. The narrative of \u201clife sciences powerhouse\u201d will become a hollow slogan, masking a reality of decline.<\/p>\r\n<p>The reasons for Big Pharma falling out of love with the UK have partly been framed in terms of a \u201cTrump effect\u201d, the emphasis on domestic manufacturing, and partly on an uncompetitive drug pricing regime in the UK after changes to the Voluntary Scheme for Branded Medicines Pricing and Access (VPAS).<\/p>\r\n<p>The UK\u2019s difficulties don\u2019t exist in isolation. Across Europe, the biopharma sector is losing ground. Public R&amp;D spending on pharma is less than half that of the US, and private investment is just a quarter of American levels. Regulation is slower and more complex: median approval times for new medicines are nearly 100 days longer than in the US. Fragmented access to health data makes it harder to run efficient trials or fully exploit AI in drug development. The Draghi report has already highlighted Europe\u2019s need to unlock secondary health data and accelerate digitisation, yet progress is slow. Meanwhile, the US continues to dominate private capital flows and China is rapidly translating R&amp;D into patents and new biopharma products.<\/p>\r\n<p><br \/><strong>The UK\u2019s self-inflicted weaknesses<\/strong><\/p>\r\n<p>But the UK is not just sharing Europe\u2019s malaise \u2013 it may also be amplifying it through its own domestic weaknesses. Several structural issues make the UK a less attractive place for biopharma investment:<\/p>\r\n<p><br \/><strong>1. Start-up strength, scale-up failure.<\/strong><br \/>The UK outperforms its European peers in early-stage funding. But when it comes to growth capital, the pipeline runs dry. Company valuations are low, making the USA a more attractive location for scaling. Promising small UK biopharma firms are often acquired by overseas investors, most commonly from the USA. In short, the UK funds the cost of discovery; others reap the rewards of commercialisation.<a href=\"#_ftn1\" name=\"_ftnref1\">[1]<\/a><\/p>\r\n<p><br \/><strong>2. Clinical trials \u2013 a squandered advantage?<\/strong><br \/>The NHS\u2019s voluminous health records could be a global asset for clinical trials. Instead, trial capacity is limited, recruitment slow, and approval pathways often cumbersome. Some other countries are easier and faster places to run trials. What should be a UK strength is in reality a weak spot.<\/p>\r\n<p><br \/><strong>3. Pricing that discourages investment.<\/strong><br \/>The UK is very good at securing low drug prices for the NHS. But from an investor\u2019s perspective, the pricing model looks increasingly hostile. The VPAS is seen as punitive by global pharmaceutical companies, compared to similar schemes in other countries. Companies don\u2019t see a fair reward for their R&amp;D risk and the UK risks being deprioritised as a launch market for new drugs.<\/p>\r\n<p><br \/><strong>4. A complacent narrative.<\/strong><br \/>Successive governments have promoted the UK as a global life sciences powerhouse. While it is true that our science remains competitive, the long-term indicators are less encouraging. Patent filings, research output, and overall R&amp;D intensity show that China and other emerging players are catching up fast.<\/p>\r\n<p><br \/><strong>What needs to happen now<\/strong><\/p>\r\n<p>Global pharma companies are not sentimental. They will locate their R&amp;D and manufacturing where conditions are most favourable. Switzerland offers stability, the US offers capital depth, China offers scale and political backing. In contrast, the UK\u2019s science base is still strong, but the downstream environment \u2013 scaling finance, trial efficiency, regulatory predictability, and pricing \u2013 does not match. Put simply, the UK is no longer seen as offering the right balance of opportunity and reward.<\/p>\r\n<p><br \/>We still have assets worth fighting for, but this requires political will. Policymakers must:<\/p>\r\n<p>\u2022 <strong>Continue to improve the environment of drug trials.<\/strong> This includes ensuring NHS data is more readily accessible to help provide real world evidence for R&amp;D and virtual trials.<br \/>\u2022 <strong>Support scale-ups, not just start-ups.<\/strong> Provide the right tax and investment landscape to build deeper pools of growth capital so that UK firms can mature into global leaders, rather than being sold abroad.<br \/>\u2022 <strong>Reform drug pricing.<\/strong> Be bold \u2013 move beyond penny-pinching and embrace value-based pricing models that align rewards with outcomes.<br \/>\u2022 <strong>Face reality.<\/strong> Stop hiding behind \u201clife sciences powerhouse\u201d rhetoric and treat life sciences as a strategic national priority.<\/p>\r\n<p><br \/>The remedies aren\u2019t just the responsibility of government alone. The biopharma sector can\u2019t simply sit back and wait for policy changes \u2013 it needs to:<\/p>\r\n<p>\u2022 <strong>Be more ambitious.<\/strong> Aim to scale from a UK base rather than defaulting to acquisition as an exit.<br \/>\u2022 <strong>Engage proactively with the NHS.<\/strong> Build the evidence base for adoption as innovative technologies are being developed and not after they have been launched; work with clinicians to overcome the system\u2019s inherent risk aversion.<br \/><strong>\u2022 Tell the value story better.<\/strong> Demonstrate clearly how new drugs save money and improve outcomes, not just what they cost.<\/p>\r\n<p><br \/><strong>A wake-up call<\/strong><\/p>\r\n<p>If we keep congratulating ourselves on our science while ignoring the cracks in our industrial base, we will drift into decline. Biopharma is too important to the UK\u2019s economy and health system to be allowed to wither. The choice is clear: act boldly now or accept second-tier status tomorrow.<\/p>\r\n<p><em>This blog draws on recent interviews James gave to <a href=\"https:\/\/www.nature.com\/articles\/d41586-025-03001-y\">Nature<\/a> and CNN\u2019s Marketplace Europe about the state of the UK and European health tech industry.<\/em><\/p>\r\n<p><br \/><strong>CSEP\u2019s work on the biopharma and health technology sectors<\/strong><\/p>\r\n<p>We have published reviews of the competitiveness of the UK\u2019s biopharma (<a href=\"https:\/\/www.imperial.ac.uk\/media\/imperial-college\/research-centres-and-groups\/centre-for-sectoral-economic-performance\/Biopharmaceutical_Sector_2024_Brochure_Nov2024.pdf\">Biopharmaceutical_Sector_2024_Brochure_Nov2024.pdf<\/a>) and health technology (<a href=\"https:\/\/www.imperial.ac.uk\/media\/imperial-college\/research-and-innovation\/the-forum\/public\/348-IMP-Public-Affairs-3-reports_Medtech_AW_DIGITAL_SINGLES_Sept23.pdf\">348-IMP-Public-Affairs-3-reports_Medtech_AW_DIGITAL_SINGLES_Sept23.pdf<\/a>) sectors, with recommendations for business and government. In collaboration with the ABHI, we have developed a UK healthtech sector strategy, available here: <a href=\"https:\/\/www.imperial.ac.uk\/media\/imperial-college\/research-centres-and-groups\/centre-for-sectoral-economic-performance\/Lores_Screen_View_Only_HealthTech_Report_Oct2024_v4-FINAL.pdf\">Lores_Screen_View_Only_HealthTech_Report_Oct2024_v4-FINAL.pdf<\/a><\/p>\r\n<p>CSEP is currently investigating the R&amp;D productivity of UK biopharma and whether this has changed in recent years as new technologies such as AI have become more widely used. Another project is investigating the \u201clong tail\u201d of around 500 smaller biopharma companies and their potential for growth. These projects will be completed in 2026.<\/p>\r\n<p><em><a href=\"#_ftnref1\" name=\"_ftn1\">[1]<\/a> More information on\u00a0the slippage in the UK\u2019s scientific performance and on the challenges faced by small biopharma companies seeking to grow can be found in the CSEP\u00a0<a href=\"https:\/\/blogs.imperial.ac.uk\/csep-and-telecoms\/2025\/01\/20\/from-biopharma-innovation-to-biopharma-impact-can-the-uk-compete-globally-in-2025\/\">blog<\/a>\u00a0&#8220;From biopharma innovation to biopharma impact: Can the UK compete globally in 2025?&#8221;<\/em><\/p>\r\n<!-- \/wp:post-content -->","protected":false},"excerpt":{"rendered":"<p>Author: James Barlow For years, the UK has traded on its reputation as a \u201clife sciences powerhouse.\u201d This narrative isn\u2019t entirely false: we have world-class universities, our basic science is strong, and the NHS provides a unique testbed for clinical research. Yet behind the rhetoric, the biopharma sector is facing real and immediate challenges.<\/p>\n","protected":false},"author":1908,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-105","post","type-post","status-publish","format-standard","hentry","category-uncategorised"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Is the UK biopharma sector at risk of sleepwalking into decline? - Centre for Sectoral Economic Performance Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/blogs.imperial.ac.uk\/csep\/2025\/10\/03\/is-the-uk-biopharma-sector-at-risk-of-sleepwalking-into-decline\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Is the UK biopharma sector at risk of sleepwalking into decline? - Centre for Sectoral Economic Performance Blog\" \/>\n<meta property=\"og:description\" content=\"Author: James Barlow For years, the UK has traded on its reputation as a \u201clife sciences powerhouse.\u201d This narrative isn\u2019t entirely false: we have world-class universities, our basic science is strong, and the NHS provides a unique testbed for clinical research. 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