US pharmaceutical giant Merck has scrapped its planned £1bn UK expansion. The company said the government is not providing enough support for the life sciences sector.
The multinational, known in Europe as MSD, will move research to the US and cut jobs in Britain. Executives accused successive governments of undervaluing vaccines and innovative medicines.
Industry experts warned the move could deter other global firms from investing in the UK.
Government defends spending but admits challenges
A government spokesperson defended current investment in science and research but acknowledged more work is needed. Officials highlighted recent initiatives while recognising strong international competition.
Pharmaceutical companies have increasingly shifted focus to the US. They face pressure from Donald Trump’s administration, which has threatened steep tariffs on imported medicines.
London projects halted and jobs affected
Merck had begun building a King’s Cross facility, scheduled to finish in 2027. The company confirmed it will not occupy the building.
It will also leave the London Bioscience Innovation Centre and the Francis Crick Institute. These exits will result in 125 job losses by the end of the year.
A Merck spokesperson said the decision reflects Britain’s ongoing underinvestment in life sciences. They added that governments have consistently undervalued medical innovation.
Experts warn of broader impact
Sir John Bell, emeritus professor of medicine at Oxford University, said he spoke with leaders of major pharmaceutical firms. They all indicated they do not plan to expand in the UK.
He criticised declining NHS spending on medicines. Ten years ago, pharmaceuticals made up 15% of health budgets. Today it is 9%, while other countries spend between 14% and 20%.
Bell warned companies will move investment abroad if Britain does not purchase their products.
Industry leaders call for urgent action
Richard Torbett, head of the Association of the British Pharmaceutical Industry, described the decision as a “serious blow.” He urged ministers to act quickly to restore competitiveness.
He said weak competitiveness is the main issue. Years of underinvestment, he added, have weakened the ability to bring research into market-ready products.
Merck follows other companies scaling back UK projects. Earlier this year, AstraZeneca abandoned a £450m expansion in Merseyside, citing limited government support.
UK market losing appeal
Last month, another senior executive warned NHS patients risk losing access to cutting-edge treatments. He described Britain as “largely uninvestable.”
Novartis executive Johan Kahlstrom said the company had already failed to launch several medicines in the UK. He blamed declining competitiveness.
In 2023, AstraZeneca chose Ireland for a new factory instead of Britain. High UK tax rates, the company said, discouraged investment in north-west England.
Industry insiders said King’s Cross had become a hub for life sciences and AI. They rejected claims Merck’s exit was solely linked to pricing disputes.
US political pressures reshape strategy
Drug companies face pressure from Washington to lower prices for American patients. At the same time, they are urged to expand investment in the US.
In August, Trump warned tariffs on imported medicines could reach 250%. The warning followed an executive order aimed at reducing US drug costs.
Dr David Roblin, chief executive of Relation Therapeutics in London, said Britain still offers strong research foundations. He praised universities, the NHS research platform, and the UK Biobank.
But he stressed the US remains the world’s largest pharmaceutical market. Political shifts there, he added, are forcing global companies to adapt strategies.
Political response
A spokesperson for the Department of Industry, Science and Technology said Britain remains an attractive destination for investment. But the official admitted challenges persist and pledged support for affected staff.
Labour’s manifesto sets out a new life sciences plan. It promises an NHS innovation and adoption strategy with faster approval of medicines and technologies.
The party also pledged clearer procurement routes and stronger incentives to encourage innovation.
