Published by Global Banking & Finance Review®
Posted on September 10, 2025
2 min readLast updated: January 22, 2026
Add as preferred source on GoogleThe UK's drug pricing policies are deterring foreign investment in the pharmaceutical sector, warns the British pharmaceutical lobby group amid ongoing disputes with the government.
LONDON (Reuters) -Britain's main pharmaceutical lobby group said on Wednesday foreign investment in the sector has fallen due to its approach to drug pricing, as the industry remains locked in dispute over the issue with the UK government.
Drug companies have been in long-running negotiations with British ministers over how much revenue from UK sales firms must return to the country's National Health Service, and the latest talks broke down last month without a resolution.
The dispute continues as U.S. President Donald Trump applies pressure on Britain and the European Union to spend more on drugs from U.S. firms, with the administration still mulling plans for pharmaceutical tariffs.
In a report released on Wednesday into the outlook of the pharmaceutical sector, the Association of the British Pharmaceutical Industry warned of long-term underinvestment in innovative medicines, saying Britain's ranking for FDI in the sector had fallen from second in 2017 to seventh in 2023.
ABPI said that "high clawback rates on pharmaceutical companies' UK revenues exacerbate... persistent structural barriers to investment", and cited several pharma executives who were critical of the government's approach.
"The UK is increasingly being ruled out of consideration as a viable location for pharmaceutical investment," it said.
Trump is due to visit Britain next week on a state visit. While Britain and the U.S. have agreed a deal on some tariffs, the treatment of pharmaceutical firms is yet to be finalised.
The two sides in May agreed to "promptly negotiate significantly preferential treatment outcomes on pharmaceuticals and pharmaceutical ingredients," with Britain saying it would "endeavour to improve the overall environment for pharmaceutical companies".
In July, in a bilateral meeting with Starmer in Scotland, Trump said he could work with Britain on the pharmaceutical sector, and that it wouldn't be used as a block or a "cudgel" in trade talks.
(Reporting by Alistair Smout; Editing by Jan Harvey)
The British pharmaceutical lobby group stated that foreign investment in the sector has declined due to the UK's approach to drug pricing.
Drug companies are negotiating with British ministers regarding the revenue from UK sales that must be returned to the National Health Service.
The US administration, led by President Trump, is pressuring Britain and the EU to increase spending on drugs from US firms.
The ABPI warned of long-term underinvestment in innovative medicines due to high clawback rates and structural barriers to investment.
During a bilateral meeting, Trump indicated he could work with Britain on the pharmaceutical sector and that it wouldn't be used as a block in trade talks.
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