How Brexit and austerity shape the UK’s life sciences ambitions

The United Kingdom has long cast itself as a global leader in research and innovation, and government ministers still speak of a future in which the country stands tall as a science superpower.

Yet after years of Brexit turbulence, sluggish growth, and the unrelenting fiscal squeeze on public services, the UK’s life sciences sector faces a crossroads. The rhetoric remains lofty, but translating ambition into reality is proving harder than many expected.

Part of the challenge lies in reconciling two competing imperatives. On one side, the government wants the pharmaceutical and biotech industries to drive growth, attract capital, and foster high-value jobs across the regions. On the other, the National Health Service (NHS), already under enormous strain, has to keep a lid on medicines spending. The balance between incentivizing investment and controlling costs is delicate, and at times the two agendas have pulled in opposite directions.

Access bottlenecks in the NHS

The most visible pressure point has been the system that determines how quickly and widely new medicines are adopted. In theory, once a drug receives a positive assessment from the National Institute for Health and Care Excellence (NICE), it should be available across the NHS. In practice, uptake often lags.

Recent analysis shows that although England made more than half of newly approved medicines available in the past few years, actual patient use has been below international peers. The discrepancy reflects local variation, budget constraints, and a pervasive caution within the health system.

Industry frustration has been heightened by the branded medicines pricing scheme, now known as VPAG. This agreement caps the annual growth of NHS spending on branded drugs, with companies required to rebate revenues that exceed the cap. The rates have climbed sharply compared to a few years ago, reaching levels that many executives argue are unsustainable. For firms weighing where to put capital, the message is mixed: the UK offers scientific talent and a unified health system, but also an unpredictable pricing climate that can eat into returns.

And if access and affordability pose one hurdle, the regulatory landscape presents another. The Medicines and Healthcare products Regulatory Agency (MHRA) gained autonomy when the UK left the EU, and with it came both opportunity and strain.

Freed from European structures, the agency introduced an international recognition procedure that allows it to accept decisions from trusted regulators such as the EMA and partners in the Access Consortium. On paper this shortens timelines, offering 60- or 110-day review clocks instead of a full reassessment.

Yet questions remain about whether the MHRA has the resources to balance this new flexibility with the need to lead in innovation. Outsourcing large portions of its review work helps with capacity, but critics wonder if relying heavily on foreign assessments risks diluting domestic expertise.

For companies, the calculation is practical: a faster UK route is welcome, but unless approval is paired with swift NHS access, the commercial impact is modest. Regulators and health technology assessors are trying to close that gap by coordinating their reviews, a step that could make the system more attractive if it delivers.

Clinical research and investment

Clinical research offers a further window into the UK’s predicament. The O’Shaughnessy review in 2023 painted a sobering picture of declining commercial trial activity, much of it tied to bureaucratic delays.

Government initiatives have since aimed to cut trial set-up times, standardize contracts, and improve data access. Early pilots have shown that streamlining can shave months off study start-up, but across the system results remain uneven. Advanced therapies, particularly in cell and gene treatments, are a rare bright spot, with trial numbers and manufacturing capacity both expanding. Whether this momentum can offset the wider downturn in research activity is uncertain.

Investment flows tell another story of contrasts. The UK biotech sector saw a rebound in 2024, raising more than double the previous year’s funding, and the first half of 2025 has been relatively strong. But the recovery is highly concentrated in a handful of large deals, with most capital still coming from overseas rather than domestic investors.

Policymakers talk about unlocking pension funds to support innovation, yet progress is slow. At the same time, companies have pulled back or delayed major projects, citing the combined weight of pricing schemes and political volatility. The message from investors is that the fundamentals are appealing, but policy consistency is lacking.

A regional lens exposes another weakness in the superpower narrative. Successive governments have promised to spread the benefits of life sciences beyond the golden triangle of London, Oxford, and Cambridge. Scotland, Wales, and Northern Ireland all have strategies designed to attract trials and investment, with mechanisms such as Scotland’s patient and clinician engagement process offering more flexibility on difficult-to-assess medicines.

Despite these efforts, capital and talent remain concentrated in the southeast. Bridging that divide will be essential if the government’s levelling-up promises are to carry any weight.

Reset or rhetoric?

While the UK adjusts its regulatory and pricing frameworks, the EU has rolled out a new system for joint clinical assessments, initially covering advanced therapies and oncology drugs. Although Britain is not part of the scheme, it will influence global evidence standards and launch sequencing.

The UK has rejoined Horizon Europe, regaining access to collaborative research funding, but its position relative to major markets like the USA and EU is still uncertain. Competing jurisdictions are offering generous incentives for investment, and the UK cannot assume that talent and capital will automatically flow its way.

Taken together, these elements paint a picture of a sector caught between ambition and constraint. There is genuine strength in academic science, world-class clinicians, and a tradition of innovation.

The MHRA has shown flashes of agility, and reforms to clinical research are starting to bear fruit. Yet the wider system - dominated by cost control, uneven uptake, and patchy investment—undercuts the government’s lofty narrative. Without addressing these structural weaknesses, the claim to science superpower status risks looking like more slogan than substance.