The grey skies of UK life sciences

To explore this complex landscape further, Deep Dive spoke with Martyn Williams, managing director of COPA-DATA UK, a company focused on digital transformation, providing solutions that enhance operational efficiency and sustainability.

“Drug costs have become a global tug of war, and the UK’s right in the middle of it,” said Williams. “As the US moves to bring its prices down, companies are trying to recover losses elsewhere, and the UK’s become an easy target because it’s already under pressure.”

Last month, Britain's biggest company AstraZeneca paused a planned £200 million investment in its Cambridge research site, having earlier revealed a $50 billion US investment programme in July, amid industry concerns about threatened tariffs on pharmaceutical imports into the country.

“It seems like every few days another big name announces it’s pulling back or slowing down,” said Williams. “There are some cynical suggestions that there’s a coordinated industry effort behind it, but that’s not what’s happening. Each business is looking at the same landscape and drawing the same conclusion: the UK’s become too uncertain to plan around.”

These tensions coincide with recent VPAG (Voluntary Scheme for Branded Medicines Pricing, Access and Growth) negotiations between industry and the UK government. The UK has been undergoing its most significant clinical trial regulatory overhaul in two decades, spearheaded by the MHRA. With a focus on enhancing patient safety and NHS participation, the new framework seeks to expand patient access to innovative treatments, and the new legislative changes will help to make the UK one of the best countries in the world to conduct clinical research for patients and researchers. That’s if industry can be kept here. It didn’t help that the UK government doubled the rate that drugmakers must repay on the sales of newer products to the NHS under the so-called statutory scheme – hiked to 31.3% in the latter half of this year from 15.5% in the first half.

“It’s not just VPAG that’s causing problems,” said Williams. “Between tariffs, trade disputes, and headline-driven policy shifts, the sector’s lost any sense of stability. You can’t build a five-year R&D plan when you’ve no idea what the rules will look like in six months. Pharma will keep innovating because it has to, but investors and boards are voting with their feet.”

“Once confidence goes, it’s hard to get it back,” he added. “The UK’s got incredible scientific talent, but those skills are mobile. If we keep sending signals that innovation isn’t valued, that talent will drift to markets that do.”

“Manufacturing’s already on shaky ground,” he continued. “We’ve got one of the highest industrial energy costs in the world and a cost base that’s pricing us out of competitiveness. When you combine that with volatile rebate schemes and political uncertainty, the message to industry is simple: look elsewhere.”

The human impact of the global pricing battle

All this ultimately impacts patients. As published in the British Medical Journal (BMJ) back in 2020, the concern over pricing in life sciences has been long-standing. Nonetheless, equitable access to modern healthcare, for both common and rare diseases, should be a basic human right. Yet, despite the clear “social value” stated by Prof Steven G Morgan, Hannah S Bathula, and Suerie Moon, et al in the BMJ, the costs present “a significant policy challenge.”

Indeed, as the authors noted, global expenditure on pharmaceuticals reached $1.135 trillion in 2017, up 56% from 2007. By 2024, Statista reported that the revenue of the worldwide pharmaceutical market that year was $1.7 trillion, with the US accounting for more than half. In short, prices have never been sustainable, and they continue to climb.

As Prof Morgan et al stated: “To achieve social value from pharmaceutical innovations requires policies to promote the financing of research and development in areas of substantial unmet need while simultaneously providing access to innovations. Time limited market power through patents is one way of encouraging research investment while, eventually, allowing competition to drive down prices and thereby increase access.”

In the US, patients rely on “collective financing schemes” like public and private health insurance, but the costs of treatments are only rising. Take multiple sclerosis: treatments priced around $8,000 to $11,000 per year in the mid-1990s could cost a staggering $88,487 per year in 2024, according to a study funded by the National Multiple Sclerosis Society. And if a drug becomes unaffordable, the patient stops taking it.

The Annals of Internal Medicine (AIM) estimated that, in 2023, non-adherence costs the US healthcare system between $100 billion and $290 billion every year, with up to 30% of prescriptions never filled by patients. As MedCity News reported that year, it was becoming an established practice of US patients to source their medications from Canada in order to cut down costs, where prices can be up to 90% lower, though Canada’s own costs are rising under new PMPRB guidelines and pressure from US tariff threats.

Balancing investment value with social value

Manufacturers often give confidential (and substantial) discounts to institutional buyers, meaning that manufacturers can charge different payers different prices. There have been calls to introduce more transparent pricing – in Europe, for example. As Prof Morgan et al in the BMJ noted: “If every health system pays the maximum amount that it is willing to pay under circumstances of life or death price negotiations, without knowing that lower prices might be possible, there is a danger of creating excessive rewards for companies.”

Alignment between investment value and social value doesn’t always pan out, however.

“The global pricing battle makes the UK collateral damage,” Williams stated simply. “When the US and EU flex their muscles, we don’t have the scale to absorb the fallout. High rebate rates, unpredictable policies, and rising production costs all feed into the same outcome – the UK starts sliding down the list of places where new drugs get launched first.”

“That matters,” he continued. “Once R&D and clinical trial activity start shifting to other countries, it’s not just today’s treatments we lose out on, it’s the next generation. You can’t claim to be a global leader in life sciences if the companies driving that innovation don’t see the UK as a viable market.”

In the end, it’s patients who feel the effects most. “When investment slows, new medicines take longer to arrive,” explained Williams. “When trials move abroad, UK patients lose early access to cutting-edge therapies. Shortages and launch delays aren’t abstract problems, they’re symptoms of a system that’s become too unpredictable to rely on.”

“Right now, the UK’s life sciences sector is caught in the middle of too many moving parts,” stated Williams. “Between VPAG, energy costs, trade politics, and uncertainty over future policy, it’s no surprise companies are hesitating. It’s not that the science has slowed down – it’s that the environment around it has become too unpredictable to invest in with confidence.”

Digitalisation to the rescue?

As Ariel Katz, former Forbes Council Member, and CEO and co-founder of H1, recently wrote in Forbes, it could be technology that could solve many of the complexities the current global drug pricing battles are throwing up – before health inequities deepen. Streamlining R&D processes through digital tools not only boosts efficiency, but reduces costs – a critical factor in drug pricing, which takes into consideration everything from R&D and distribution costs to healthcare system structure and political pressure. On a global scale, to say there are ‘complexities’ when contemplating a multi-market strategy is to put it lightly.

Digitalisation could be a boon, optimising clinical trial design, enhancing analysis of real-world evidence, accelerating regulatory compliance, predicting development costs, and optimising production, as well as speeding up drug discovery. As Katz writes: “It’s estimated that GenAI alone could unlock up to $110 billion annually for the pharma sector by enhancing productivity.” The question is how that would translate into drug prices for patients.

“The irony is that [in the UK] we’ve got the technology to fix some of this ourselves,” said Williams. “Smarter automation and digitalisation can make UK manufacturing leaner, more flexible, and more resilient, but only if companies have the right foundations in place. You can’t digitalise what you haven’t modernised. A lot of life sciences firms still haven’t achieved full data capture from the shop floor, so they’re missing the very insight that would make them more efficient.”

“That’s where automation platforms come in,” he continued. “Systems that connect and unify operational and process data help manufacturers adapt when conditions change – whether that’s a pricing squeeze, a supply chain issue, or an energy cost spike. They can optimise batch production, reduce scrappage, and keep product quality consistent across multiple sites, even when resources are tight.”

“AI will push this even further, from using reinforcement learning to improve R&D outcomes to digital twins that identify a golden batch and make it repeatable every time. But none of that happens without a solid data backbone or a stable policy environment to build on,” Williams insisted.

A pivotal moment

Certainly, the time is now to effect meaningful change, and there is clear weight behind the MFN policy’s purpose for US patients. Only last week, a new report from the Institute for Clinical and Economic Review (ICER) in the US found that the net prices of newly launched drugs rose 51% in a three-year period between 2022 and 2024, while the list prices rose 24%. The cost-effectiveness watchdog said it had focused on the net price – the actual price paid after rebates and discounts – as that is a more useful metric for policymakers than the list price.

List prices are publicly available, but many factors influence the final net price. In the UK, confidential discounts and rebates negotiated with payers are particularly common, with drug assessments tied to cost-effectiveness thresholds, such as QALY (Quality-Adjusted Life Year). As Remap Consulting summarised, what is needed overall is “ensuring affordability and patient access to innovative drugs globally, while protecting the sustainability of the current pharmaceutical business model and securing incentives for long-term investment in pharmaceutical innovation.”

So, while the US continues to impact global drug pricing to address its own market, the UK – increasingly isolated post-Brexit – must rediscover its confidence and redefine its business model to attract investment.

“If the government wants to turn things around, it has to start with people and policy certainty,” Williams insisted. “That means a clear long-term framework that industry can plan against, realistic energy costs, and a genuine commitment to rewarding innovation.”

“The UK’s still got the brains, the infrastructure, and the reputation to lead in life sciences, but all of that counts for little if companies can’t see a stable future here. Investment will always follow certainty. If we can’t offer it, those opportunities (and the innovation that comes with them) will simply go elsewhere,” he concluded.