Business flees when it feels it is unwanted, and the Labour Party has created an environment that repels capital. A wave of pharmaceutical companies are pulling out of the United Kingdom due to a climate that has become “uninvestable.”
AstraZeneca has become one of the latest companies to pull back on investments due to excessive regulation and taxation. “We constantly reassess the investment needs of our company and can confirm our expansion in Cambridge is paused. We have no further comment to make,” a spokesperson said. The company decided to pause a 200 million pound ($271.26 million) investment in Cambridge that was slated to created 1,000 new jobs. The company first terminated a 450 million pound investment in northern England back in January, citing a lack of support from the UK government.
Merck Pharmaceuticals terminated a £1bn (US$1.35bn) research and development project in London and called the UK “uninvestable.” The drugmaker plans to abandon its London Bioscience Innovation Centre and the Francis Crick Institute by the end of the year due to the lack of investment in the life science industry and the overall undervaluation of innovative medicines and vaccines by successive UK governments.”
“Simply put, the UK is not internationally competitive,” a Merck spokesperson stated.
The NHS tightly regulates drug prices, yet spends only 9% of its budget on medicines compared to other OECD nations that spend between 14-20%. Only 37% of new drugs are fully reimbursed for their licensed use, whereas the figure is 90% in Germany and likely higher in the US. The government expects businesses to pay them a large portion of their revenue. Drugmakers face a 23.5% levy on new drugs as of 2025. Why would a pharmaceutical company research and develop new products in a nation that demands nearly a quarter of the profits?
Foreign investment in life sciences is down 58% since 2017 across the UK. Comparatively, investment in research and development (R&D) fell 1.9% on a global basis. Tight price controls, high government levies, and regulatory red tape have caused multi-billion-dollar investments to flee. Drugmakers are beginning to pour investments into the US instead, where they receive generous incentives and lower taxes.