US pharmaceutical giant Merck has abandoned plans for a £1bn UK expansion. The company said the government is failing to provide enough backing for the life sciences sector.
The multinational, known as MSD in Europe, will shift 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 pharmaceutical firms from investing in the UK.
Government highlights progress but admits shortcomings
A government spokesperson defended existing spending on research but conceded that more action is needed. Officials pointed to recent initiatives but acknowledged growing international competition.
Drug companies have increasingly redirected investment to the US. They face pressure from Donald Trump’s administration, which has threatened steep tariffs on imported medicines.
London projects cancelled and jobs lost
Merck had already begun building a site in King’s Cross, due for completion in 2027. The company now says it will not occupy the new facility.
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 company spokesperson said the decision reflects the UK’s failure to address chronic underinvestment in life sciences. Successive governments, the statement added, have undervalued medical innovation.
Experts warn of wider pullback
Sir John Bell, emeritus professor of medicine at Oxford University, said he had spoken with several senior executives. They all indicated they are unwilling to expand investment in Britain.
He criticised the NHS for reducing its pharmaceutical budget. Ten years ago, 15% of spending went to medicines. Today the figure has fallen to 9%, while other nations spend between 14% and 20%.
Bell warned that companies will invest elsewhere if they cannot sell their products in the UK.
Calls for urgent government response
Richard Torbett, head of the Association of the British Pharmaceutical Industry, called the decision a “major blow.” He urged politicians to act swiftly to restore competitiveness and prevent further corporate exits.
He said weak competitiveness drove Merck’s choice. Long-term underinvestment, he added, is damaging the ability to turn innovation into products.
Merck joins other firms scaling back UK plans. Earlier this year, AstraZeneca scrapped a £450m expansion in Merseyside, citing a lack of government support.
UK market seen as less attractive
Last month, another senior industry figure warned NHS patients risk losing access to new 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 the market’s 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 investment in life sciences and AI. They dismissed suggestions that Merck’s exit was caused only by drug pricing disputes.
US politics reshaping strategies
Drug companies are under pressure from Washington to lower prices for American patients. At the same time, they are encouraged to invest more heavily in the US.
In August, Trump threatened tariffs of up to 250% on imported drugs. The warning followed an executive order aimed at cutting US drug prices.
Dr David Roblin, chief executive of Relation Therapeutics in London, said Britain still offers strong research conditions. He praised the strength of universities, the NHS as a research platform, and the UK Biobank.
But he stressed that the US remains the largest pharmaceutical market. Political shifts there, he added, are forcing global firms to adjust their investment strategies.
Political responses
A spokesperson for the Department of Industry, Science and Technology said the UK remains an attractive place to invest. But the official admitted more must be done and pledged support for affected workers.
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 new incentives to encourage long-term innovation.
