Pharma investment on the up as UK turns corner

The UK is starting to recover some of the pharmaceutical investment it lost in recent years, according to a report published by the ABPI this week.

Foreign direct investment in the industry reached £167.2m in the first half of 2026, more than double the £88.8m recorded across the whole of 2025, the report found.

Investment starts to return

The £167.2m figure includes commitments from overseas companies to build new facilities or establish and expand operations in the UK.

The figure puts the UK ahead of countries including Spain and France, although it remains around the middle of the international rankings. The US was comfortably in the top spot, attracting £1.4bn in investment.

Richard Torbett, CEO of the ABPI, said the UK had “started to turn a trend of disinvestment into one of green shoots”. That marks a significant change from last year, when the industry body repeatedly warned that the UK was becoming a less attractive place for pharma R&D.

Policy changes ease the pressure

The improvement comes after a series of government changes aimed at addressing some of the industry’s biggest complaints about doing business in the UK.

In the first half of 2026 alone, the government raised NICE’s cost-effectiveness threshold for the first time since the early 2000s and capped the medicines clawback rate after it reached 22.9% in 2025.

It also agreed a deal with the US that will spare UK-based manufacturers from tariffs for three years.

The changes followed sustained pressure from the industry, which argued that high clawback payments and slow access to new medicines were making the UK a harder sell for investors.

There is a catch, however. The £167.2m figure is based on investment announcements rather than money already spent, meaning not all of these commitments may translate into projects on the ground.

Problems remain unresolved

The report also makes clear that some of the UK’s bigger challenges around investor appetite remain.

Medicine uptake remains slower than in comparable European countries, while clinical trial recruitment has fallen by 25% since 2022/23.

The UK is also competing with countries offering stronger incentives for life sciences investment. Ireland has raised its R&D tax credit to 35%, compared with 20% in the UK.

So while the latest figures are encouraging, much will depend on whether planned investments are seen through and whether the UK can address wider issues around tax incentives, medicine access and clinical trials.