AstraZeneca pauses £200m Cambridge investment citing policy concerns

AstraZeneca has paused a £200 million investment in its Cambridge research facility, citing concerns about UK healthcare investment policy, government drug expenditure levels and uncertainty over market returns. The company announced the decision today, prompting a sharp fall in its share price and drawing attention to wider tensions between industry and government policy settings.

The planned investment was expected to support early‑stage drug discovery efforts, create around 1,000 jobs, and further enhance AstraZeneca’s R&D footprint in the UK. With the pause, those benefits are now under review. The decision follows earlier cancellations, such as a £450 million vaccine plant project.

Shares in AstraZeneca dropped approximately 3.4 per cent on the FTSE‑100 upon news of the pause, contributing to a broader decline in pharmaceutical and biotech stocks of roughly 2.6 per cent. Sterling strength also weighed on export‑oriented firms as markets anticipate upcoming central bank decisions globally.

AstraZeneca’s leadership argues that government drug expenditure—currently around 9 per cent of NHS total spending—is low relative to peers, and that policies such as the NHS’ “clawback tax” on branded medicines are a disincentive to investment. The company says the investment pause is intended to force a policy rethink rather than a permanent withdrawal.

Investors and analysts said the move may cause reputational risk for the UK as a destination for life‑sciences investment, especially compared with rival markets offering more generous regulatory certainty. They also noted that policy clarity, including on pricing, procurement, and reimbursement, will be key to restoring confidence.

For the government, this issue may become politically sensitive in the run‑up to the next Budget as business groups press for support and certainty in drug pricing regimes. AstraZeneca’s ability to generate return on investment in the UK will increasingly be seen as a barometer for how far the government is achieving its ambition for the life sciences sector.