Pharma companies venture further afield in search of R&D
With manufacturing onshoring a continuing point of discussion in the industry, many pharma companies went the opposite way for R&D in 2025, deciding to conduct innovation overseas.
According to a survey of pharma executives by consultancy firm Ayming UK, nearly half (47%) of the respondents said they offshored R&D last year. Companies cited collaboration opportunities with partners and proximity to new markets and customers as two of the primary motivating factors for their strategy. Firms also pointed to enhanced access to R&D talent, along with lower wage costs in certain territories.
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Respondents included C-suite and R&D directors from European countries, such as the UK, France, and Germany, amongst others, in addition to Canada, China, and the US. Companies involved in the survey covered small and large businesses.
The UK ranked the highest for those offshoring pharma innovation. Reports published in the past year by trade bodies have lamented the lack of commercial opportunity in the UK despite the region’s high-quality scientific expertise in universities and early-stage companies. This has raised questions about the state of attractiveness of the UK’s R&D scene.
As per data from the BioIndustry Association (BIA), a UK-based trade association, equity financing and venture capital dropped 49% and 13%, respectively, in 2025 compared to 2024. R&D investment meanwhile fell nearly £100m to £8.7bn in 2023, as per a report by the Association of the British Pharmaceutical Industry (ABPI).
In January 2026, AstraZeneca, the UK’s most valuable company, pledged $15bn to fund an R&D and manufacturing expansion in China. This follows the drugmaker shelving certain expansion plans in the UK in September 2025. Rumours continue to circulate regarding more operational moves to the US for AstraZeneca.
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By GlobalDataThe global state of the pharmaceutical industry has been under the spotlight in the past year amid key policies introduced by US President Donald Trump. This includes threatening pharma companies with tariffs in a bid to prioritise US drug manufacturing and development. Some experts have said onshoring creates a more resilient global supply chain, while critics cite higher domestic labour costs.
Ayming’s survey also revealed what pharma execs see as the biggest stiflers of innovation. Inefficient process and bureaucracy were cited as the biggest obstacles to innovation, with both financial and skills shortages also highlighted.
Mark Smith, managing director at Ayming UK, says: “When we talk about innovation, the focus often falls on shiny new technologies, but the reality is that innovation is driven by people. It’s people who develop new technologies, apply them in the real world, and carry out the R&D that turns ideas into commercial success.
“The pharmaceutical sector has enormous capacity for innovation, but that potential is constrained when talent shortages are combined with complex processes and bureaucracy. Without the right people and more efficient frameworks to support them, there is a real risk that R&D activity is delayed or diverted elsewhere, limiting the sector’s ability to translate scientific breakthroughs into real-world impact at pace,” Smith concludes.
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