The UK risks losing its world-leading position in life sciences as investment in pharmaceutical research and development continues to fall behind international competitors, according to a new report from the Association of the British Pharmaceutical Industry (ABPI).

The trade body’s latest Competitiveness Framework, ‘Creating the Conditions for Investment and Growth,’ shows the UK slipping down global rankings for R&D investment, clinical trial delivery, and foreign direct investment (FDI). The report highlights both the country’s strengths and its growing weaknesses in attracting life sciences investment.

Since 2018, UK Pharmaceutical R&D investment has underperformed against global trends, slowing to 1.9 percent annually since 2020 compared to a 6.6 percent global average. In 2023, industry R&D spending in the UK actually fell by nearly GBP 100 million. 

Life sciences FDI has also collapsed, dropping 58 percent from GBP 1.9 billion in 2017 to GBP 795 million in 2023. Over the same period, the UK’s ranking among comparator countries fell from second to seventh place.

The UK’s global ranking for commercial clinical trials has also declined steadily since 2018, although there were small signs of improvement in 2023. Meanwhile, Spain has established itself as European’s top destination for commercial clinical trials.

ABPI Chief Executive Richard Torbett warned that the UK must act urgently to reverse the decline. “The UK has a world-class science base and the potential to lead globally in developing the next generation of medicines and vaccines. But without a more competitive environment for investment, we risk losing out to other countries making bold moves to attract internationally mobile investment.”

He stressed the importance of establishing a commercial environment that offers fair rewards for pharmaceutical innovation.

“I believe the UK has the potential to unlock billions in additional investment in early stage R&D, ensure patients and the NHS can benefit from access to cutting-edge clinical trials, and attract major capital investment in R&D and medicines manufacturing facilities - all of which directly support the government’s health and growth missions. But realising this potential requires industry and government working together to remove existing barriers and lean into areas of untapped strength. First and foremost, we need to create a commercial environment that rewards pharmaceutical innovation fairly and brings its benefits rapidly to UK patients,” Torbett added.

The UK’s life sciences strengths include world-class universities, cutting-edge research infrastructure, and strong public and charitable R&D funding. Its robust intellectual property framework supports investment, while a rich ecosystem of biotech companies— ranked third globally and first in Europe — continues to attract significant venture capital and generate high numbers of pharmaceutical spinouts.

UK life science competitive weaknesses include low spending on medicines, poor patient access to innovative treatments, high and unpredictable revenue clawbacks that deter investment, and a decline in clinical trial delivery.

According to the report, the UK invests only nine percent of its healthcare spend in medicines, compared with 20 percent in Japan, 17 percent in Spain and 14 percent in Germany.

The UK’s unrealised potential in life sciences lies in three key areas: Health data and AI, advanced therapies, and regulation.

While the UK conducts fewer total trials than some of its peers, it leads in advanced therapy R&D. Nearly 10 percent of the world’s advanced therapy trials are recruiting patients in the UK, the report noted.