US pharmaceutical giant Merck has cancelled its planned £1bn UK expansion. The company said the government is failing to provide enough support for the life sciences industry.
The multinational, known in Europe as MSD, will relocate 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 discourage other global firms from investing in the UK.
Government defends investment but admits gaps
A government spokesperson defended spending on science and research but acknowledged more work is needed. Officials highlighted recent initiatives while recognising growing 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 scrapped and staff affected
Merck had begun construction on a King’s Cross facility, due for completion in 2027. The company confirmed it will not occupy the site.
It will also vacate 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 wider consequences
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 falling 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 take investment 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 central issue. Years of underinvestment, he added, have weakened the ability to turn research into market-ready products.
Merck follows other companies scaling back UK projects. Earlier this year, AstraZeneca abandoned a £450m expansion in Merseyside, citing insufficient 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 opted for 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 makers 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 provides 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.
