The new money will help to fund advancements in treatments as well as new drugs, devices, and diagnostics.
Up to £200 million of the funding is set to be invested into research to better access NHS data which will make vital data more readily available for research whilst keeping it secure and private.
Thousands of patients will also benefit from receiving faster treatment due to more diverse and inclusive clinical research, enabling a better understanding of the winder community and helping to tackle existing health inequalities.
Health and Social Care Secretary Sajid Javid said: “NHS data is making the whole world safer and healthier and has been vital in saving thousands of lives during the COVID-19 pandemic.
“This funding will ensure the UK can continue to help researchers access NHS data securely so patients can benefit from more innovative treatments faster.
“I’m absolutely committed to boosting the UK’s position as a world-leading research centre, transforming our health service and ensuring the NHS continues to deliver excellent care for patients”.
An additional £60 million will look to aid commercial-sale manufacturing investments by companies leading the way in innovations across the sector.
The Life Sciences Innovative Manufacturing Fund has been set up to distribute the new funding to companies working on cutting edge technology.
Business Secretary Kwasi Kwarteng said: “The past 2 years have shown just how important our fantastic medical and life sciences industry is for the UK not only in dealing with the pandemic, but also for the vital economic opportunities they create throughout the country.
“By providing £260 million to boost UK medical manufacturing and medical research, we are ensuring the industry has the support it needs to improve patient outcomes and generate high-skilled jobs while building up Britain’s manufacturing base in the process”.
The new money comes in addition to the government's prior commitment to investing in the life sciences sector, which saw £354 million allocated to it through the Global Britain Investment Fund.
In response to the funding the Association of the British Pharmaceutical Industry's Director of Strategy, Research and Partnerships, Colette Goldrick said: “This substantial investment in developing and building public confidence in the UK’s health data infrastructure is very welcome. Health data has been critical in the fight against Covid, and more people than ever before have seen the benefits that sharing information can bring in terms of researching and developing new treatments at unprecedented speed.
“We look forward to this funding, once confirmed, strengthening the UK’s health data assets to unlock a new generation of medical breakthroughs.”