Eli Lilly joins big pharma fallout over drug prices

Select committee calls emergency meeting as CEOs 'livid with the UK' after talks with government crash over NHS rebates, writes Barney Macintyre

- Barney Macintyre

Eli Lilly has joined a number of pharmaceutical companies pausing or dropping investments in the UK following a fallout with the government over drug pricing.

Gateway Labs, a London-based hub that provides support for biotech startups established last October as part of Lilly's planned £279m investment in the UK – is on hold as the company "awaits more clarity" on the state of the country's life sciences industry.

Lilly's pause follows Merck's scrapping of a £1bn London research hub and AstraZeneca's decision to pause a £200m investment for research and development in Cambridge.

It's understood that Novartis is keeping its UK investments "under review". The US drugmaker has already reduced its UK footprint from seven sites, including two manufacturing plants in 2009, to one site based in London with 1,200 staff.

"This is a huge blow," said Professor Dame Ijeoma Uchegbu at the UCL School of Pharmacy, commenting on the Merck announcement. "Resets such as these also harm up and coming companies who may have relied on upstream innovation."

The pharma sector collectively contributed 13% of business R&D expenditure in the UK in 2023, according to a report released this week by PwC and the Association of the British Pharmaceutical Industry (ABPI).