AstraZeneca, the United Kingdom’s largest company by market capitalization, has announced it is pausing a planned £200 million ($271 million) expansion at its Cambridge research site, dealing a fresh blow to Britain’s ambitions of maintaining its status as a global hub for pharmaceutical innovation. The decision, confirmed by an AstraZeneca spokesperson on September 12, 2025, follows a string of high-profile retreats by major pharmaceutical companies from the UK, and comes at a time when the country’s life sciences sector is facing increasing scrutiny over its competitiveness and attractiveness for investment.
The Cambridge project, first unveiled in March 2024 by the previous UK government, was set to create around 1,000 jobs and would have expanded AstraZeneca’s existing Discovery Centre, where 2,300 researchers and scientists are already based. The now-paused facility was to be a cornerstone of a broader £650 million investment package heralded by government officials as a testament to Britain’s prowess in life sciences. But with Friday’s announcement, none of that promised new funding is set to proceed, according to The Independent.
This setback is not an isolated incident. In January 2025, AstraZeneca scrapped plans to invest £450 million in expanding its vaccine manufacturing plant in Merseyside, citing a reduction in government support. At the time, the company noted that after “protracted” negotiations, several factors—including the timing and reduction of the government’s final offer compared to previous proposals—led to the decision to pull out. These moves have left many in the industry questioning the UK’s commitment to supporting pharmaceutical innovation and manufacturing.
The wave of withdrawals extends beyond AstraZeneca. Just this week, US pharmaceutical giant Merck & Co. (known as MSD in Europe) announced it was abandoning a $1.31 billion (£1 billion) research center in London’s King’s Cross, despite construction having already begun. Merck cited “the lack of investment in the life science industry and the overall undervaluation of innovative medicines and vaccines by successive UK governments” as the primary reasons for its exit, according to Fierce Biotech.
Adding to the sense of urgency, Eli Lilly has also paused its plans for a British biotech lab space, stating it is waiting for “more clarity around the UK life sciences environment.” These moves have collectively been described as a “stunning rebuke” of the UK by the biopharma industry, as reported by Fierce Biotech.
Behind these decisions lies a broader trend that has been developing for several years. According to a September 10, 2025 report from the Association of the British Pharmaceutical Industry (ABPI), the UK’s life sciences sector has been lagging behind other developed nations since 2018. The ABPI urged the government to “move fast to address the country’s systemic weaknesses,” warning that the UK risks undervaluing the benefits tied to investing in life sciences manufacturing. The association’s recent statements have been blunt, noting that Britain is “increasingly being ruled out of consideration as a viable location for pharmaceutical investment,” with ongoing talks between drugmakers and the government on revenue returns to the NHS having stalled.
One of the most telling indicators of the UK’s declining appeal for pharmaceutical investment is the sharp drop in government spending on medicines. Over the past decade, the proportion of the NHS budget spent on medicines has fallen from 15% to just 9%. In contrast, most other developed countries allocate between 14% and 20% of their healthcare budgets to medicines. Industry leaders argue that this underinvestment, coupled with what they see as a long-term undervaluation of innovative treatments, has contributed to the recent exodus of pharmaceutical firms.
The international context is also playing a significant role. In July 2025, AstraZeneca announced it would invest $50 billion (£36.9 billion) in the United States by 2030, focusing on medicines manufacturing and research and development. This move was partly motivated by US President Donald Trump’s threats of imposing sky-high tariffs on imported medicines, a policy aimed at encouraging companies to invest more heavily in the US. Trump has publicly criticized the UK and Europe for not paying high enough prices for drugs, and several pharmaceutical firms have responded by redirecting their investments to the US. Other major drugmakers—including Johnson & Johnson, Novartis, and Roche—have also made substantial US investment pledges in recent months.
“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,” an AstraZeneca spokesperson told Fierce Biotech and The Independent. This terse statement underscores the uncertainty now facing the UK’s life sciences sector.
Despite these setbacks, some bright spots remain. BioNTech, the German biotech firm known for its mRNA vaccine technology, has reaffirmed its commitment to the UK. A spokesperson for BioNTech confirmed to Fierce Biotech that the company’s multi-year collaboration with the UK government is ongoing, with plans to invest approximately $1.3 billion in the UK over the next decade. This includes building two new research centers and a new headquarters in London. “Our multi-year collaboration with the UK government is ongoing and our plans announced in May are on track,” the spokesperson said.
Meanwhile, the UK government has sought to mitigate the damage by negotiating with the US for preferential treatment on pharmaceuticals. In May 2025, the two countries agreed to seek “significantly preferential treatment outcomes on pharmaceuticals,” with Britain committing to improve the overall environment for pharma firms operating in the country. Whether these efforts will be enough to stem the tide of investment leaving the UK remains to be seen.
The industry’s frustrations are not limited to government policy. Drugmakers have also called on foreign governments to pay more for their medicines, a direct response to President Trump’s push for lower drug prices in the US and increased prices abroad. In a striking example of this trend, Eli Lilly announced last month that it would hike the price of its weight loss drug Mounjaro in the UK by 170%.
Former Chancellor Jeremy Hunt once described the life sciences sector as “crucial for the country’s health, wealth and resilience,” and current Chancellor Rachel Reeves recently called AstraZeneca “one of the UK’s great companies.” Yet, the recent cascade of cancelled and paused projects paints a far less optimistic picture. With none of the £650 million in new investments promised by the previous government now set to materialize, and with leading companies redirecting their resources elsewhere, the future of Britain’s pharmaceutical industry hangs in the balance.
For now, the UK’s hopes of remaining a global leader in life sciences rest on swift and decisive government action, as well as the willingness of industry giants to give Britain another chance. The coming months will be critical in determining whether the country can reverse its fortunes—or whether the exodus of pharmaceutical investment will continue.
