Global pharmaceutical companies are consecutively pulling back investment in the United Kingdom. They are pushing back against a policy that requires returning 24% of revenue to the U.K. At the same time, President Donald Trump is pressuring them to invest in the United States. Drugmakers are leaning toward investing in the U.S. instead to avoid the tariff burden on medicines.
Nature, an international journal published in the United Kingdom, reported on the 17th (local time) that global pharmaceutical companies headquartered in the United States, the United Kingdom, and France have withdrawn plans to build research facilities and create jobs in the U.K.
10th, U.S. drugmaker Merck (MSD) scrapped a plan to develop a research facility in London worth 1 billion pounds (1.9 trillion won). Merck planned to build the "U.K. Discovery Centre" in London and create 800 jobs, but the plan fell through. Merck also plans to lay off 125 scientists in London.
Two days after Merck's announcement, U.K.-based AstraZeneca said it would put on hold a plan to invest 200 million pounds (380 billion won) to expand its Cambridge research facility and create 1,000 jobs. U.K. media including the Financial Times (FT) and the Guardian reported that France's Sanofi has completely halted new investment in the U.K., and that U.S. firm Eli Lilly abandoned plans to spend 279 million pounds (530 billion won) to create a space in London to bring together new drug development researchers.
Global pharmaceutical companies are pushing back against the U.K. government's drug pricing policy. Drugmakers operating in the U.K. must rebate 23.5% of annual revenue to the National Health Service (NHS), the state-run health insurer. The rebate rate is higher than in France (5.7%) and Germany (7%). Drugmakers hope the U.K. will lower the rebate rate to single digits like other European countries. Paul Naish, Sanofi's U.K. lead, said in a Guardian interview on the 12th that "the U.K. is not suitable for developing and selling medicines."
Global drugmakers are turning their attention to the United States. The Wall Street Journal (WSJ) reported on the 16th that more than 12 pharmaceutical companies have pledged to invest $350 billion (485 trillion won) in the U.S. by 2030. U.K.-based GlaxoSmithKline (GSK) plans to invest $30 billion (42 trillion won) in the U.S. over the next five years. The companies unveiled large-scale investment plans to coincide with President Trump's state visit to the U.K.
Eli Lilly also decided to build a manufacturing facility in Virginia for $5 billion (7 trillion won). This is part of a plan announced in Feb. to build four manufacturing facilities in the U.S. for $27 billion (37 trillion won). Johnson & Johnson (J&J) also said it will invest $55 billion (76 trillion won) in the U.S. over the next four years, and AstraZeneca will invest $50 billion (69 trillion won) in the U.S. by 2030. The industry assessed that drugmakers are increasing investment in the U.S. to ease the Trump administration's tariff pressure on medicines.