US pharmaceutical giant Merck has cancelled its planned £1bn UK expansion. The company said the government is not giving the life sciences sector enough support.
The multinational, known in Europe as MSD, will move its research to the US and cut jobs in Britain. Executives accused successive governments of undervaluing vaccines and innovative medicines.
Industry experts warned the decision could deter other major companies from investing in the UK.
Government defends spending but admits more is needed
A government spokesperson defended investment in science and research but admitted more work must be done. Officials highlighted new initiatives but acknowledged that Britain faces tough international competition.
Pharmaceutical companies have already shifted focus to the US. They face pressure from Donald Trump’s administration, which has threatened steep tariffs on imported medicines.
London projects abandoned and jobs cut
Merck had begun construction of a new King’s Cross site, expected to finish in 2027. The company has now confirmed it will not occupy the building.
It will also vacate the London Bioscience Innovation Centre and the Francis Crick Institute. These exits will cost 125 jobs by the end of the year.
A Merck spokesperson said the decision shows Britain’s failure to address underinvestment in life sciences. They added that governments have long undervalued innovation.
Experts highlight a broader problem
Sir John Bell, emeritus professor of medicine at Oxford University, said he had spoken with global pharmaceutical leaders. They all confirmed they will not expand in the UK.
He criticised falling NHS spending on medicines. A decade ago, pharmaceuticals made up 15% of health budgets. Today it is 9%, while other countries spend between 14% and 20%.
Bell warned firms will take investment abroad if they cannot sell their products in Britain.
Industry leaders urge swift action
Richard Torbett, head of the Association of the British Pharmaceutical Industry, called the decision a “serious setback.” He urged politicians to respond quickly to avoid further damage.
He said weak competitiveness is the main factor. Years of underinvestment, he added, have undermined the ability to bring innovations to market.
Merck follows other firms scaling back UK projects. Earlier this year, AstraZeneca cancelled a £450m expansion in Merseyside, blaming poor government support.
Britain seen as uncompetitive
Last month, another senior executive warned NHS patients risk losing access to advanced 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 decline in competitiveness.
In 2023, AstraZeneca chose Ireland for a new factory rather than Britain. The company said high UK tax rates discouraged investment in north-west England.
Industry insiders said King’s Cross had grown into a hub for life sciences and AI. They rejected claims Merck’s decision was solely about drug pricing disputes.
US pressures drive global strategy
Drug makers are under pressure from Washington to cut prices for American patients. At the same time, they are urged to increase investment in the US.
In August, Trump warned tariffs on imported medicines could reach 250%. The warning followed an executive order to reduce 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 as a research platform, and the UK Biobank.
But he stressed the US remains the world’s biggest pharmaceutical market. Political shifts there, he added, are forcing global firms to adapt.
Political response
A spokesperson for the Department of Industry, Science and Technology said Britain remains attractive to global investors. But the official admitted challenges remain 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 approvals for medicines and technologies.
The party also pledged clearer procurement routes and stronger incentives to drive investment in innovation.
