The UK as a global life sciences hub: Legal infrastructure and innovation policy

Originally published in Investors in Healthcare on 9 Dec 2025.

To attract global investment and foster innovation in its life sciences sector, Clare Auty, partner and head of our independent health and social care team, says Britain must reshape its legal and policy frameworks.

The recent agreement between the UK and US on pharmaceuticals tariffs reinforces how Britain’s life sciences sector is undergoing transformation. Long recognised for its scientific excellence and world-class research institutions, tariff uncertainty has compounded corporate caution, with companies including AstraZeneca, Eli Lilly and MSD putting more than £2bn of major R&D infrastructure investment on hold.

The challenges highlight the importance of the UK actively reshaping its legal and policy landscape to attract global investment and foster innovation. Legal infrastructure should be viewed not just as a compliance tool, but as a strategic asset that unlocks opportunities, mitigates risks and accelerates growth across the life sciences ecosystem.

In an increasingly competitive international market in which the UK is relatively small, the strength of a country’s legal infrastructure and innovation policy can be the deciding factor for investors and collaborators. Through these reforms, the UK is positioning itself not just as a participant in the global life sciences race – but as a leader.

Legal infrastructure: Enabling innovation

Legal frameworks are often viewed as constraints, but in the UK, they are increasingly being used as enablers of innovation. The ongoing modernisation of the Medicines and Healthcare products Regulatory Agency (MHRA) is a case in point.

Post-Brexit regulatory agility

Post-Brexit, the UK has taken the opportunity to reimagine its regulatory environment, aiming to become more agile, responsive and innovation-friendly. The MHRA’s efforts to streamline approval processes recognise approvals from trusted international regulators and support novel clinical trial designs are already attracting attention from global biotech and MedTech firms.

Establishing mutual recognition agreements with the US Food and Drug Administration (FDA), and other regulators, is essential in positioning the UK as a gateway to global markets.

UK intellectual property protection

This regulatory agility is complemented by the UK’s robust intellectual property (IP) regime. Strong IP protection is essential for life sciences companies, especially those investing heavily in R&D. The UK offers a sophisticated legal system with specialist IP courts, experienced judges and a well-established body of case law. For overseas investors, this provides confidence that their innovations will be protected and enforceable.

To strengthen this advantage further, Britain should consider how it can accelerate patent examination for life sciences and introduce patent term extensions to compensate for the regulatory review process.

Enabling cross-border collaboration

Moreover, the UK’s legal infrastructure supports collaboration. A combination of established contract and IP laws, coupled with regulatory compliance, provides a framework for data sharing, joint ventures and licensing agreements, making it easier for international partners to engage with UK-based organisations, including public bodies. This is particularly important in areas like genomics, AI in healthcare and synthetic biology, where cross-border collaboration is often essential.

Further work is needed to create flexible AI regulations and secure agreements with Europe and other jurisdictions on reciprocal recognition of authorisation approvals.

Innovation policy: A strategic vision for growth

Legal infrastructure alone is not enough. The UK’s innovation policy is increasingly aligned with its ambition to become a global life sciences hub.

The creation of the Advanced Research and Invention Agency (ARIA): Operating independently of UK Research and Innovation (UKRI) – is a bold move that reflects a shift in how Britain funds and fosters high-risk, high-reward science.

ARIA’s focus on flexible, strategic open programmes: Rather than traditional fixed rolling grant competitions – allows it to support speculative and disruptive technologies, as well as long-term research that might otherwise struggle to secure backing.

Sustained Viral Resilience: A project that aims to engineer the innate immune system to create durable, broad-spectrum medicines against respiratory viruses – received £46m in funding, demonstrating ARIA’s capacity to back ambitious, high-stakes research.

This sits alongside the UK’s broader Life Sciences Sector Plan, which outlines a strategy to grow the sector, improve patient outcomes and drive economic growth. Key priorities include accelerating access to innovative treatments, supporting manufacturing and supply chain resilience, and enhancing the UK’s clinical trials ecosystem.

Funding opportunities

The UK’s re-entry into Horizon Europe further strengthens its position. Access to EU research funding and networks enhances Britain’s ability to collaborate internationally, while domestic initiatives like the Biomedical Catalyst and the Smarter Regulation Sandbox provide targeted support for early-stage innovation.

Limited NHS funding can, however, delay patient access to innovation despite regulatory approvals. One solution would be to ring-fence innovation funding within NHS budgets and create separate “innovation adoption” funds outside the standard commissioning budgets, providing more predictable revenue pathways for companies bringing innovations to market. Longer-term NHS contracts, with purchasing commitments flowing from success in the pilot phase, would also provide more certainty for investors.

Data, AI and the future of regulation

One of the most exciting areas of development is the UK’s approach to data and artificial intelligence (AI) in life sciences. The government has recognised that access to high-quality health data is a strategic asset – and that legal clarity is essential to unlock its value.

Initiatives like the NHS Federated Data Platform and the Goldacre Review are helping to build a trustworthy framework for data use, balancing innovation with public trust.

Synthetic data is emerging as a powerful tool. By generating realistic but artificial datasets, researchers can train AI models, simulate clinical trials, and explore new therapies without compromising patient privacy. The UK is well-positioned to lead in this space, thanks to its strong data governance frameworks and growing expertise in AI regulation.

Legal questions around data ownership, consent and algorithmic accountability are complex – but the UK is taking steps to address them.

The proposed Data Protection and Digital Information Bill, for example, aims to modernise data protection laws while maintaining high standards. If enacted, this could create a clearer and more stable environment in which to operate.

A jurisdiction of choice for investors

These developments make the UK an increasingly attractive destination for life sciences investment. The combination of legal certainty, regulatory agility and strategic policy support creates an inviting proposition for companies looking to expand or collaborate internationally.

But there are challenges. Those major pharmaceutical companies that paused or cancelled UK-based investments in recent years cited high rebate rates under regimes like the Voluntary Scheme for Branded Medicines Pricing, Access and Growth (VPAG), declining NHS spending on medicines, and slow uptake of innovative treatments for their decisions.

The UK has also experienced declining clinical trial activity and foreign direct investment, with some firms shifting operations to more commercially favourable jurisdictions. To gain a comparative advantage, the UK must focus on time and quality, getting innovative products to patients faster than anywhere else in the world while maintaining rigorous scientific standards.

This requires co-ordinated action across the MHRA, National Institute for Health and Care Excellence, NHS England, HM Revenue and Customs, and the Home Office – a “whole of government” approach to life sciences competitiveness, coupled with proper investment and financial incentives.

Key takeaway

International investors should take note. The UK is systematically evolving its life sciences offering. This is a jurisdiction that understands the value of innovation – and is building on the established legal and policy foundations to support it.