The UK’s life sciences sector stands at a crossroads. On one hand, it boasts world-class research institutions, unrivalled clinical trial potential through the NHS, and billions in public R&D investment. On the other, disputes over NHS medicine pricing, a rigid evaluation framework that undervalues long-term impact, and mounting competition from global peers threaten to erode its standing.
Life Sciences is truly one of the UK’s greatest strategic assets, but currently outdated pricing and evaluation frameworks are failing to reflect the true value of innovation. The current NHS rebate system, designed to control costs, has created uncertainty for global pharmaceutical companies and risks diverting investment to more predictable markets like the US or EU.
At the same time, government evaluation tools often overlook the broader economic and societal benefits of life sciences, from exports and regional growth to advances in patient care. If the UK is to maintain its position as a global leader, reforming how we price and evaluate new medicines is no longer optional, it is essential.
The good news for UK Life Sciences is that we are globally competitive
The UK continues to hold significant strengths that underpin its global competitiveness in life sciences. At its core lies a world-class research base, supported by leading universities, cutting-edge infrastructure, and a highly skilled workforce. The NHS also provides a unique advantage, enabling large-scale clinical research opportunities that few countries can match.
These scientific assets are reinforced by strong government backing: initiatives such as R&D tax relief, the patent box regime, and the £86bn multi-year UK science & technology R&D envelope announced in June 2025. Within this, the Life Sciences Sector Plan commits over £2bn in support over the Spending Review period via UKRI and other mechanisms. Together, these measures are designed to fuel discovery and innovation.
Complementing this is a supportive regulatory environment and the presence of thriving regional clusters, particularly the “Golden Triangle” of Cambridge, Oxford, and London, where collaboration between academia, start-ups, and global pharma companies accelerates commercialisation. Together, these factors create an ecosystem that positions the UK as a natural leader in life sciences innovation.
So, what is holding us back from global leadership?
Despite its many strengths, the UK life sciences sector faces mounting challenges that threaten its long-term competitiveness. One of the most pressing issues is the ongoing dispute over NHS medicine pricing. The current voluntary scheme (VPAG, running 2024–2028) has set a 2025 headline rebate rate of 22.9%, sparking concerns across the industry. The government has already announced a rapid review of the scheme, recognising that sustained high rates risk deterring launches and investment. This uncertainty is eroding confidence and risks pushing global pharmaceutical companies to prioritise markets where pricing frameworks are more predictable and commercially sustainable.
Looking abroad, the we face two distinct pressures:
From the US: America remains the largest market and investor magnet. Yet recent political decisions have injected real turbulence. The Trump administration’s deep cuts to NIH and cancer research funding, described as the most disruptive in decades, have already frozen or terminated billions in grants. Universities are shutting labs, staff are being laid off, and leading researchers are openly considering relocating. While this creates short-term instability in the US, it could accelerate a migration of scientific talent to Europe or the UK. Capturing this “brain drain” will require the UK to look as stable and welcoming as possible to researchers and investors.
From Europe: The EU’s new Joint Clinical Assessment (JCA), live since January 2025, is designed to harmonise health technology assessment across member states, making Europe a more attractive launch destination. The UK, outside this framework, risks being sidelined. However, NICE and MHRA are working to dovetail with international HTA processes through a Global HTA Collaboration pilot, aiming to reduce duplication and keep the UK an attractive first-launch market. The question is whether this soft alignment will be enough to offset the scale advantages of the EU bloc.
At a structural level, the UK also faces challenges in how it evaluates life sciences investment. HM Treasury’s Green Book and the Life Sciences Investment Model Framework (LSIMF) have been criticised for focusing too narrowly on immediate financial returns, while undervaluing broader benefits such as export growth, sustainability, regional development, and improvements to patient outcomes. This narrow lens makes it harder to build a compelling case for long-term investment in the sector.
The result of these combined pressures is a steady leakage of economic value. Recent analysis (SCI, 2025) estimates the UK has been missing out on ~£15bn a year due to declining clinical trial activity, stagnant firm growth, and a fall in foreign direct investment rankings. Left unchecked, these trends risk weakening the UK’s global position and diminishing its ability to convert scientific excellence into economic and societal impact.
What could these challenges mean for Life Sciences in the UK?
The stakes for the UK life sciences sector could not be higher. If reforms to pricing, evaluation, and investment frameworks stall, the country risks more than just economic loss. Jobs across research, manufacturing, and clinical development will steadily migrate elsewhere, depriving regions of high-value employment. The UK’s global standing as a hub of scientific excellence will weaken, with investors and multinationals increasingly favouring the US or continental Europe.
Perhaps most critically, the R&D pipeline that fuels medical breakthroughs will become less robust, slowing access to life-changing treatments for patients at home and diminishing the UK’s ability to contribute to global health challenges.
I do believe that the UK has the tools to reclaim its ambition, but only if we choose to act decisively. First, it requires collaborative leadership, where government, the NHS, and industry work in true partnership to design solutions that balance affordability with incentives for innovation.
Second, it demands adaptive evaluation frameworks that capture the full economic and societal impact of life sciences investment, beyond narrow financial metrics, ensuring the sector is valued for its role in driving exports, regional growth, and long-term health outcomes.
Finally, it calls for purposeful investment, unlocking pension funds, international capital, and domestic resources to fuel scale-up and sustain a competitive edge.
Decisive action now could give UK Life Sciences a much more positive future
The path forward requires striking a careful balance: ensuring the NHS can access affordable medicines while giving investors and innovators the confidence to commit to the UK. This is not a zero-sum choice, well-designed reforms to pricing and evaluation can protect patients, attract global capital, and unlock the full potential of British science.
With its unrivalled research base, unique NHS infrastructure, and proud heritage of discovery, the UK has everything it needs to remain at the forefront of global life sciences. What is needed now is bold, decisive policy action to translate these strengths into sustainable leadership for the decades ahead.
Unless bold reforms are embraced, balancing affordability with innovation, the UK risks losing not only investment and talent, but also its hard-earned reputation as a global leader in life sciences. The choice is clear: allow incremental pressures to erode a national advantage, or act now to cement life sciences as a pillar of economic growth, health resilience, and global leadership for decades to come.
KEY ISSUES & ACTIONS AT A GLANCE
The issues
- NHS rebate system (VPAG) at 22.9% in 2025 is eroding confidence and deterring investment.
- Evaluation frameworks (Green Book/LSIMF) undervalue wider economic and health benefits.
- The US, while dominant, faces instability from Trump’s research cuts, driving potential talent migration.
- The EU is strengthening its position through the Joint Clinical Assessment, creating competitive pressure.
- The UK is losing an estimated £15bn a year in competitiveness through declining trials, FDI, and exports.
The actions needed
- Unlock new sources of investment (pensions, international capital, domestic funds) to fuel scale-up and global leadership.
- Reform NHS pricing frameworks to balance affordability with predictable incentives for innovation.
- Modernise evaluation tools to reflect exports, regional growth, and patient outcomes, not just narrow financial returns.
- Position the UK as a stable alternative to the US by welcoming displaced talent and offering a predictable environment.
- Dovetail with EU JCA processes where possible to maintain the UK’s appeal as a first-launch market.
I’d welcome your thoughts and discussions, do you believe the current rebate system is doing more harm than good for long-term access to new treatments? What pricing reforms do you think would rebuild trust and encourage greater life sciences investment in the UK?
References / Further reading
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