About this paper

The UK’s pharmaceutical industry is both globally significant (home to leading companies and a top-10 exporter), as well as being an important contributor to the British economy (£17.6 billion GVA and employing 176,000 people) and to the healthcare of Britons through the NHS (£16.7 billion in NHS expenditure on medicines).

Key findings

The UK defence industry is a significant sector on both the global stage (through exports and enabling British military power) and in the British economy, employing 164,000 people and contributing £12 billion to the economy.

Important regulatory and policy developments include:

• The UK pharmaceutical industry remains a highly-regulated and complex operating environment for industry, with a multitude of departments, agencies and other public bodies engaged over the course of a product life cycle.
• Under the Voluntary Scheme for Branded Medicines Pricing and Access (VPAG), the rebate rate for newer medicines has increased to 22.9 per cent in 2025 against industry expectations. This will eat into industry bottom lines and negatively affect investment. The industry will look for assurance from the government that the rate will decline in 2026 and remain at a more sustainable level over coming years.
• The UK’s ongoing post-Brexit free trade agenda - combined with Labour’s new industrial strategy, Invest 2035 - presents opportunities for the pharmaceuticals and broader life sciences industry to expand their capacity, attract new investment and grow their export markets.

Download GovConnex's full Industry Briefing: Pharmaceutical paper to read more.