US pharmaceutical giant Merck has pulled its planned £1bn UK expansion. 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 analysts warned the move could discourage other global firms from investing in the UK.
Government defends spending but acknowledges gaps
A government spokesperson defended current investment in science and research but admitted more work is needed. Officials highlighted new initiatives but recognised strong international competition.
Pharmaceutical companies have increasingly redirected focus to the US. They face pressure from Donald Trump’s administration, which has threatened steep tariffs on imported medicines.
London projects halted and staff impacted
Merck had begun building a King’s Cross facility, due for completion in 2027. The company has now confirmed it will not occupy the building.
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 Merck spokesperson said the decision reflects Britain’s ongoing underinvestment in life sciences. They added that governments have consistently undervalued pharmaceutical innovation.
Experts highlight broader implications
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, 15% of health budgets went to pharmaceuticals. Today it is 9%, while other countries spend between 14% and 20%.
Bell warned companies will invest abroad if Britain does not buy their products.
Industry leaders call for urgent response
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 core issue. Years of underinvestment, he added, have weakened the ability to turn research into market-ready products.
Merck follows other companies scaling back UK plans. Earlier this year, AstraZeneca cancelled a £450m expansion in Merseyside, citing insufficient government support.
UK market losing appeal
Last month, another 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 declining competitiveness.
In 2023, AstraZeneca opted to build a new factory in Ireland instead of Britain. The company said high UK tax rates 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 due to pricing disputes.
US pressures reshape global strategy
Drug companies are under pressure from Washington to cut costs for American patients. At the same time, they are 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 reducing US drug prices.
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 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 remain and pledged support for affected staff.
Labour’s manifesto outlines 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 boost innovation.
