AstraZeneca, a British-Swedish pharmaceutical multinational, has warned that it may halt further investment in the UK unless the government reforms its drug pricing policies. The company’s local chairman, Shaun Grady, cited an outdated and restrictive pricing system used by the National Health Service as a key factor deterring investment. This system includes spending caps and high rebate rates on branded medicines, making the UK a less attractive destination for global pharmaceutical expansion.
According to Grady, the UK has failed to keep pace with medicine investment over the years, and the current commercial environment is increasingly unattractive. The company has already delayed or abandoned projects worth hundreds of millions of pounds, including a planned £200 million upgrade of its Cambridge research site and a £450 million vaccine manufacturing plant in northern England. The decision puts the entire £650 million UK investment package, announced in 2024, at risk of being shelved.
Grady also noted that the UK’s cost-effectiveness models used to approve new treatments have not been revised for 25 years, a situation he described as “pretty appalling.” He contrasted the UK’s slow-moving bureaucracy with the responsiveness of US authorities, highlighting a recent £50 billion US investment announcement made just 33 days after meeting with the governor of Virginia. Grady urged the UK government to adopt a similarly competitive and agile strategy to attract global investment.
The warning from AstraZeneca, which has the largest market capitalization on the FTSE 100, comes as the company is reassessing its investment plans in the UK. The government’s reduction in support for the pharmaceutical industry has been cited as a reason for the company’s decision to pause or scrap investments. The UK government has not commented on the issue so far. The development has significant implications for the UK’s pharmaceutical industry and its ability to attract global investment, and it remains to be seen how the government will respond to AstraZeneca’s warning.
