US pharmaceutical group Merck has cancelled its planned £1bn UK expansion. The company said the government is failing to support the life sciences industry.
The multinational, known as MSD in Europe, will move research to the US and cut jobs in Britain. Leaders accused successive governments of undervaluing innovative medicines and vaccines.
Industry figures warned the decision could discourage other global firms from investing in Britain.
Government insists progress but recognises challenges
A government spokesperson defended current investment in science but admitted more action is required. Officials pointed to ongoing initiatives while acknowledging global competition is increasing.
Pharmaceutical firms have already shifted focus to the US. They face pressure from Donald Trump’s administration, which has threatened high tariffs on imported medicines.
London expansion abandoned and jobs cut
Merck had begun construction on a new King’s Cross facility, scheduled for completion in 2027. The company confirmed it will no longer occupy the building.
It will also exit the London Bioscience Innovation Centre and the Francis Crick Institute. These closures will result in 125 job losses by the end of the year.
A Merck spokesperson said the decision highlights Britain’s continued underinvestment in life sciences. The spokesperson added that governments have consistently undervalued pharmaceutical innovation.
Warning signs for wider industry
Sir John Bell, emeritus professor of medicine at Oxford University, said he has spoken with leaders of major pharmaceutical firms. They all signalled they will not expand investment in the UK.
He criticised reduced NHS spending on medicines. Ten years ago, pharmaceuticals made up 15% of healthcare costs. Today the share is 9%, while other countries spend between 14% and 20%.
Bell warned companies will invest abroad if Britain does not buy their products.
Industry demands urgent 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 is the root cause. Long-term underinvestment, he added, has damaged the ability to translate innovation into products.
Merck joins other firms cutting UK projects. Earlier this year, AstraZeneca abandoned a £450m expansion in Merseyside, blaming limited government backing.
Britain seen as losing competitiveness
Last month, another industry leader warned NHS patients could lose 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 declining market conditions.
In 2023, AstraZeneca chose Ireland for a new factory 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 dismissed suggestions that Merck’s move was solely about drug pricing disputes.
US pressures reshape global strategies
Drug companies are under pressure from Washington to cut costs for American patients. They are also encouraged to increase investment in the US.
In August, Trump threatened tariffs of up to 250% on imported pharmaceuticals. The warning followed an executive order to reduce drug prices for US consumers.
Dr David Roblin, chief executive of Relation Therapeutics in London, said Britain still offers excellent research conditions. He praised its 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 companies to adapt their strategies.
Political reactions
A spokesperson for the Department of Industry, Science and Technology said Britain remains an attractive place for investors. But the official admitted challenges persist and pledged support for affected workers.
Labour’s manifesto outlines a new life sciences plan. It promises an NHS innovation and adoption strategy with faster approval of medicines and technology.
The party also pledged clearer procurement pathways and stronger incentives to drive innovation.
