Uk economy losing out on £15 billion a year as life sciences investments shift overseas

24 March 2025:

Billions of pounds of growth in the UK’s life sciences sector is lost each year to more attractive overseas markets, according to the UK’s leading science and innovation charity.

A new report, ‘Unlocking Value in Life Sciences’, by SCI (formerly the Society of Chemical Industry), highlights that a lack of investment in the sector has impeded the UK’s ability to translate its immense research potential into commercial reality.

This has cost the UK nearly £15 billion per annum over the last decade amidst an exodus of valuable research and IP to more competitive global markets, according to new research by LEK Consulting, commissioned by SCI.

This includes £10.8 billion per annum lost from UK pharmaceutical exports, with the UK's share of the global market halving from 2013 to 2023, as well as £2.6 billion per annum loss from an 8% drop in UK clinical trials each year since 2017.Fallen levels of foreign direct investment have also resulted in a £1.1 billion per annum loss in incremental investment as the UK has dropped from second to eighth in international rankings.

Moreover, while the rest of Europe has grown employment in pharmaceutical manufacturing by 20% over the last decade, UK employment levels have remained broadly flat. If the UK had kept pace with Europe, an estimated further 10,000 jobs would be supported in this sector.

Life sciences are integral to the UK economy, driving c.£34 billion in GVA, and employing over 300,000 people. The UK’s unrivalled research base and world-leading academic institutions mean it is uniquely positioned to be a global leader in the sector. However, today’s findings lay bare the extent to which the UK economy has lost out on this vast economic potential.

Despite the UK’s foundational strengths, SCI has said that a decline in the overarching incentivisation of life sciences has led to investors and start-ups looking abroad to grow their businesses. It highlights a particularly concerning decline in the UK’s global share of industrial clinical trials, driven by antiquated regulation, slow timelines, poor recruitment and high costs. In recent history, the UK’s share of the global clinical trials market has declined markedly, from a peak of c.11% to c.8% today.

The life sciences sector was recently identified by government in its ‘Invest 2035’ report as one of its eight key “growth-driving sectors". However, SCI has warned that without bold and urgent action to enhance the UK’s competitiveness in life sciences, the UK will continue to lose out on realising the significant economic potential of the sector.

SCI is calling on the government to adopt a number of measures to restore the competitiveness of the UK life science sector including: ·

• Creating a holistic incentive system to encourage nascent life science companies to scale-up and invest in the UK
• Accelerating initiatives to promote Phase 3 clinical trials to be delivered in the UK
• Streamlining the MHRA to improve efficiency and speed up timelines for the approval of novel medicines
• Leveraging national assets like the NHS database to support real-world studies which benefit UK life science companies

Sharon Todd, Chief Executive of SCI (The Society of Chemical Industry) said: “The UK has all the ingredients for a flourishing life science sector – world class manufacturers, leading universities and research institutions, and unparalleled scientific expertise and know-how. Supported in the right way, these capabilities could transform growth, productivity and employment across the country.

“However, in an increasingly competitive global market the UK is losing out to international peers who are doing far more to keep valuable life science businesses within their borders. Life sciences have the power to fuel the green transition, accelerate the discovery of life-changing medicines and address many of the world’s great societal challenges. Government must heed this wake-up call and act to save the UK’s life science sector before it is too late.”