The month of September 2025 marked a low point for relations between the U.K. government and Big Pharma.
Over a handful of days, a series of industry heavyweights pulled back from R&D investment commitments across the country. The root of the crisis appeared to be the government’s move to increase the proportion of sales of newer branded medicines that pharmas must pay back to the U.K.’s taxpayer funded National Health Service (NHS) from 15.5% to 31.3%.
Representatives from AstraZeneca and Merck & Co. were called to the Houses of Parliament to be grilled by lawmakers about these moves. The industry representatives stood their ground, branding the U.K. an “increasingly challenging place … to bring forward innovation.”
But a year on from Big Pharma’s showdown with a national government, has anything changed?
In terms of the drug pricing system—one of Big Pharma’s biggest gripes with the U.K. —the answer is yes. The government struck a deal with the Trump administration in April that sees prescription drugs imported to the U.S. exempted from tariffs for three years in exchange for the U.K. paying 25% more for new drugs. The U.K. government has also agreed to a new rebate rate for new medicines of 14.5% of sales to the national health service in 2026, down from 22.9% in 2025.
The deal with the U.S. was enough to appease AstraZeneca. The U.K.-headquartered Big Pharma had put its plans for a 300 million pound ($404 million) investment program on ice as part of the wave of industry pullback.
But by the end of April, the company announced that a planned 200-million-pound ($271 million) construction project in the company’s hometown of Cambridge, England, would be restarted.
At the time, AstraZeneca CEO Pascal Soriot—whose calls for the U.K. to spend more on medical innovation long pre-dated the most recent unrest—was explicit that the U-turn was made to “recognize the importance of the U.S.-U.K. deal on pharmaceuticals, and the leading role this plays in ensuring increased spending on new medicines and driving access to new therapies.”
But the other Big Pharmas contacted by Fierce have been unwilling to confirm any change in their stance.
Merck & Co. had led the Big Pharma fightback when the company pulled its R&D operations out of the country entirely back in September 2025, including cancelling plans for a $1.3 billion R&D center in London. The drugmaker told Fierce last week that it has no updates to share on its plans for the U.K.
Fierce also reached out to Eli Lilly, who did at least acknowledge the “recent positive signals from the U.K. government that they are serious about the U.K. being more competitive in life sciences and rewarding innovation.”
The Indianapolis pharma’s own protest last year had taken the form of pausing much-heralded plans to launch a Gateway Labs site in the U.K. The original concept had been for the London space to be the first European site for the company’s biotech incubator program.
A spokesperson for Lilly explained last week that its investment plans for a U.K. Gateway Labs site “are under review”—although Fierce understands that this does not mean that there has been any change in the company’s position since last September.
Sanofi was also vague about whether any change could be coming. The French pharma announced back in September 2025 that it wouldn’t consider “any substantial investment” in medicines R&D in the U.K
Since then, the company has come under new management, with Belén Garijo, M.D., Ph.D., moving across from Germany’s Merck KGaA to become CEO. So far, Garijo has been stripping the dead wood from the pharma’s pipeline as part of an ongoing “portfolio strategic assessment.”
A spokesperson for Sanofi told Fierce last week that the pharma “regularly assess[es] the attractiveness of key markets for potential investment, including the U.K.”
“Our new CEO is currently reviewing all elements of our global strategy, as she outlined in the most recent earnings call,” they added.
So how does homegrown industry feel about these developments—or lack of them? The Association of the British Pharmaceutical Industry (ABPI), the trade body that represents the U.K.’s biopharmas, was unavailable to comment for this piece. But the BioIndustry Association, which represents the U.K.’s biotechs, pointed to signs of a positive future for the sector.
“We've seen the best funding quarter for U.K. biotech in five years,” said BIA CEO Chris Molloy, who namechecked the $2.1 billion series B for Alphabet-founded Isomorphic Labs in May.
Meanwhile, Novartis’ $1.1 billion upfront payment for London-based Myricx Bio in July also “represents world-class value for U.K. science,” Molloy told Fierce.
Molloy pointed out that British Big Pharma GSK has been allocating “significant additional investment in the U.K.,” including the recent announcement that it will move its research headquarters into AstraZeneca’s backyard of Cambridge.
“I think there are reasons, both from a cluster and from a financing perspective, to say that we have passed the deep dark winter,” Molloy added. “We are in a patchy, but full springtime—and if we continue to see that money move, we will see a solid summer for biotech in the U.K.”
One other change is that another European country has become the focus of Big Pharma’s ire. In July, German lawmakers voted to pass health insurance reforms aimed at cutting healthcare costs next year, in part by hiking up mandatory rebates that pharmas must pay on branded medicines. The effort faced fierce pushback from drugmakers, trade groups and political opposition parties.