Big Pharma's U-Turn on UK Investment: What's Changed?
The UK's relations with Big Pharma reached a low point in September 2025 when several industry heavyweights pulled back from R&D investment commitments due to the government's decision to increase the proportion of sales of newer branded medicines that pharma companies must pay back to the NHS.
In response, AstraZeneca and Merck & Co. were called to Parliament to answer questions about the move, with industry representatives branding the UK an 'increasingly challenging place' for innovation.
A year on from the standoff, some changes have been made: the government has struck a deal with the US that sees prescription drugs imported to the US exempted from tariffs in exchange for the UK paying 25% more for new drugs. The U.K. government has also agreed to a new rebate rate for new medicines of 14.5% of sales to the NHS in 2026, down from 22.9% in 2025.
AstraZeneca's CEO Pascal Soriot attributed the company's decision to restart a construction project in Cambridge to 'recognize the importance of the U.S.-U.K. deal on pharmaceuticals.'