US pharmaceutical giant Merck has called off its planned £1bn expansion in the UK. The company said the government is failing to provide sufficient support for the life sciences sector.
The multinational, known in Europe as MSD, will relocate research to the US and cut jobs in Britain. Executives accused successive governments of undervaluing innovative medicines and vaccines.
Industry experts warned the move could discourage other major firms from investing in the UK.
Government highlights initiatives but acknowledges gaps
A government spokesperson defended spending on science and research but admitted more work is needed. Officials pointed to recent programmes while acknowledging growing international competition.
Pharmaceutical companies have increasingly shifted investment to the US. They face pressure from Donald Trump’s administration, which has threatened high tariffs on imported medicines.
London projects scrapped and staff impacted
Merck had started construction on a King’s Cross site, scheduled to open in 2027. The company has now confirmed it will not occupy the facility.
It will also vacate the London Bioscience Innovation Centre and the Francis Crick Institute. These closures will lead to 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 wider implications
Sir John Bell, emeritus professor of medicine at Oxford University, said he had spoken with leaders of major pharmaceutical firms. They all confirmed 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 nations spend between 14% and 20%.
Bell warned companies will invest abroad if Britain does not purchase their products.
Industry calls 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 to market.
Merck follows other companies scaling back UK projects. Earlier this year, AstraZeneca cancelled a £450m expansion in Merseyside, citing limited government support.
UK market seen as less attractive
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 purely due to pricing disputes.
US pressures reshape investment
Drug companies face pressure from Washington to lower costs 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 domestic drug prices.
Dr David Roblin, chief executive of Relation Therapeutics in London, said Britain still offers strong research conditions. He praised universities, the NHS research platform, and the UK Biobank.
But he stressed the US remains the largest pharmaceutical market in the world. Political changes there, he added, are forcing global companies to adjust strategies.
Political response
A spokesperson for the Department of Industry, Science and Technology said Britain remains an attractive place 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 pathways and stronger incentives to drive innovation.
