A senior executive at Sanofi has directly linked the UK’s low spending on medicines to the country’s declining appeal for pharmaceutical investment. Paul Naish warned that with the NHS’s outlay on medicines falling to just 9% of total healthcare spending, Britain has become a “terrible place” for drug companies.
This spending level puts the UK at a significant disadvantage. It compares poorly with Germany (14%), the US (15%), and Italy and Spain (17%), making it harder for the NHS to adopt new treatments and for companies to justify investment. This financial reality is now leading to a corporate retreat from the UK’s life sciences sector.
The most dramatic example is MSD’s cancellation of its £1bn London research centre. However, the trend is broader, with Sanofi reducing its UK clinical trials by half and Eli Lilly pausing the development of a new London lab. These decisions reflect a collective judgment that the UK market is no longer commercially viable for major projects.
The pharmaceutical industry is now calling on the Treasury to work with other departments on a “proper plan” to raise spending. They argue that updating pricing mechanisms and reducing revenue clawbacks are essential first steps to restoring confidence and ensuring the UK does not fall further behind its international peers in medical innovation.