British Pharma Industry Warns Drug Pricing Policy is Driving Away Foreign Investment

The Association of the British Pharmaceutical Industry (ABPI) has cautioned that Britain’s current stance on drug pricing is undermining foreign investment in the sector. In its latest report, the industry body said the UK has slipped in global rankings for pharma foreign direct investment (FDI), falling from second place in 2017 to seventh in 2023.

Dispute Over Drug Pricing Framework

The rift stems from long-standing negotiations between pharmaceutical companies and the UK government on revenue “clawbacks” that firms must return to the National Health Service (NHS). Talks collapsed last month without agreement, leaving companies warning of continued uncertainty. ABPI said high clawback rates are worsening structural barriers and discouraging innovation.

Global Context and Industry Concerns

The dispute comes as the U.S. administration pressures Britain and the EU to increase spending on American-made drugs, while also considering tariffs on European pharmaceuticals. Industry executives have voiced concerns that the UK’s pricing model could erode competitiveness, stifling long-term investment in innovative medicines and weakening Britain’s position in the global pharma landscape.