The UK pharmaceutical industry entered 2026 with a substantially altered legal and policy landscape. A new UK US pharmaceutical trade deal introduced a 0% tariff on the UK’s pharmaceutical exports to the US for a minimum of three years, in exchange for domestic measures intended to improve market attractiveness, including a reduction in the VPAG payback rate to 15% for 2026 to 2028, an increase in the cost effectiveness threshold at which NICE evaluates treatments to between £25k and £35k per “quality-adjusted life year” and a pledge to double the portion of GDP allocated to innovative drugs from 0.3% to 0.6% over the next 10 years. In parallel, the government’s Life Sciences Sector Plan positioned life sciences as a priority sector under a Modern Industrial Strategy and a 10 Year Health Plan, targeting capital access, clinical trial bottlenecks, data access and regulatory hurdles, backed by measures such as investing £600 million in a national Health Data Research Service and up to £520 million for advanced life sciences manufacturing, with explicit targets for UK leadership in commercial R&D, scale-up finance and foreign direct investment by 2030 and 2035.
Regulatory reform accelerated in 2025, led by the Medicines for Human Use (Clinical Trials) (Amendment) Regulations 2025, which will take full effect after a 12-month transition on 28 April 2026, and are intended to cut clinical trial approval times by around 40% through a single application and parallel review by the MHRA and ethics committees, with joint RFIs within 30 calendar days and a response window extended from 14 to 60 days. The MHRA also committed to transparency through mandatory trial registration and publication of results within 12 months and introduced a 14-day assessment route for phase 1 trials, while reporting that approval times had already dropped from an average of 91 days to 41 days and that clinical trial applications were up 9% January – November 2025 versus the same period in 2024. Additional medical device measures included post-market surveillance reforms, removal of sunset clauses for key EU-derived rules, and plans to adopt EU Common Specifications for certain high risk in vitro diagnostics, alongside early work on an “Early Access” service for innovative devices. In parallel, the MHRA and NICE agreed an information sharing framework expected to reduce access times by three to six months, and the MHRA proposed a new regime for rare disease therapies.
Intellectual property litigation in 2025 underscored a strict UK approach to patent plausibility, with AstraZeneca losing dapagliflozin patent and SPC protection, and courts scrutinising interim injunctions in diabetes drug cases, including Boehringer Ingelheim’s empagliflozin. The courts also clarified supplementary protection certificate rules by barring SPCs based on second medical use authorisations and adopting a broad reading of the SPC manufacturing waiver that aligns with Dutch and Belgian decisions. Investment and M&A showed a mixed picture: UK biotech VC funding was 13.2% down from 2024 at £1.8 billion, yet deal-making skewed to large rounds, including Isomorphic Labs’ £449 million financing and Verdiva Bio’s £327 million Series A, as well as raises of £107 million by Draig Therapeutics and £90.3 million by CellCentric. M&A highlights included MSD’s $10 billion acquisition of Verona Pharma and Sanofi’s up to $1.6 billion deal for ViceBio, reflecting continued appetite for later-stage assets despite global competition from hubs such as China.
Competition and foreign direct investment rules tightened around pricing and market conduct. The Competition and Markets Authority secured confirmation of its hydrocortisone excessive pricing decision, closure of its first abusive disparagement case against Vifor with commitments and a voluntary £23m payment, and signalled innovative remedies in an ongoing vet services market probe. Government pressure to address cost of living is shaping merger review pace and the CMA’s willingness to consider behavioural remedies. Proposed changes to the National Security and Investment regime would clarify exemptions for gene and cell therapy, reduce filings in synthetic biology and narrow the Artificial Intelligence mandatory filing sector to exclude users of “off the shelf” consumer Artificial Intelligence while still catching developers of Artificial Intelligence systems that may pose health and safety risks. At the same time, class action risk for pharma companies increased, with product liability group actions such as claims against J&J’s talc, growing mass litigation around weight loss drugs abroad and emerging cyber, environmental and human rights claims, plus competition class actions that delivered a landmark abuse of dominance finding in Kent v Apple and Supreme Court guidance on the Competition Appeal Tribunal’s gatekeeper role.
Corporate crime enforcement evolved through the Economic Crime and Corporate Transparency Act 2023, which brought the new strict liability “failure to prevent fraud” offence into force on 1 September 2025 and expanded the identification doctrine so that a senior manager’s mental state for listed economic crimes can be attributed to the organisation, with a further proposal in the Crime and Policing Bill to extend this to all offences. These developments, combined with a tougher Serious Fraud Office posture and updated prosecution guidance, require pharmaceutical companies to reassess fraud controls, data integrity in clinical and sales reporting, and self-reporting strategies. In the technology sphere, the UK continued a sector-led, pro-innovation approach to regulating Artificial Intelligence, relying on existing laws and high-level principles rather than a dedicated Artificial Intelligence statute, even as the government seeks to make the NHS the world’s most Artificial Intelligence enabled health system. The MHRA issued a Call for Evidence on Artificial Intelligence in healthcare to inform a National Commission’s recommendations for a new framework in 2026, while courts heard major Artificial Intelligence-related IP cases, including Getty v Stability AI and Emotional Perception Artificial Intelligence v Comptroller of Patents, the latter simplifying patentability tests for computer implemented inventions by aligning with EPO enlarged board of appeal jurisprudence and signalling that UK courts should generally follow enlarged board rulings across patent law.
