US pharmaceutical giant Merck has abandoned its planned £1bn UK expansion. The company said the government is failing to support 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 decision could trigger more companies to withdraw investment from the UK.
Government insists progress but concedes limits
A government spokesperson defended spending on science and research but admitted more needs to be done. Officials pointed to new initiatives but acknowledged growing global competition.
Pharmaceutical firms have already shifted more investment to the US. They face pressure from Donald Trump’s administration, which has threatened steep tariffs on imported medicines.
London projects scrapped and jobs lost
Merck had started work on a new King’s Cross facility, set to open in 2027. The company now says it will not occupy the building.
It will also exit the London Bioscience Innovation Centre and the Francis Crick Institute. These closures will cost 125 jobs by the end of the year.
A Merck spokesperson said the decision shows Britain has failed to address chronic underinvestment in life sciences. They added that governments have undervalued medical innovation.
Warnings from industry leaders
Sir John Bell, emeritus professor of medicine at Oxford University, said he has spoken with senior pharmaceutical executives. They all indicated they do not plan to expand in the UK.
He criticised falling NHS spending on medicines. Ten years ago, 15% of budgets went to pharmaceuticals. Today it is 9%, while other countries spend between 14% and 20%.
Bell warned firms will take their business elsewhere if Britain does not buy their products.
Calls for urgent political action
Richard Torbett, head of the Association of the British Pharmaceutical Industry, called the decision a “serious setback.” He urged politicians to act quickly to restore competitiveness.
He said weak competitiveness drove Merck’s choice. Years of underinvestment, he added, have hindered the ability to turn innovation into products.
Merck joins other companies reducing UK projects. Earlier this year, AstraZeneca abandoned a £450m expansion in Merseyside, blaming limited government support.
Britain losing its edge
Last month, another senior executive warned NHS patients risk losing access to cutting-edge medicines. He said Britain is now “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 attracted strong life sciences and AI funding. They denied Merck’s move was driven only by disputes over drug pricing.
US politics reshaping strategy
Drug makers face pressure from Washington to reduce costs for American patients. They are also urged to invest more in the US.
In August, Trump warned tariffs on imported medicines could reach 250%. The warning followed an executive order aimed at cutting drug prices.
Dr David Roblin, chief executive of Relation Therapeutics in London, said Britain still provides excellent research conditions. 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 companies to adapt their strategies.
Political reaction
A spokesperson for the Department of Industry, Science and Technology said Britain remains an attractive place to invest. But the official admitted challenges remain and pledged support for affected workers.
Labour’s manifesto promises a new life sciences plan. It sets out an NHS innovation and adoption strategy with faster approval of medicines and technologies.
The party also pledged clearer procurement routes and stronger incentives to boost innovation.
