US pharmaceutical giant Merck has abandoned a £1bn expansion in Britain. The company said the government is not providing enough support for the life sciences sector.
The multinational, known in Europe as MSD, will shift research to the US and cut jobs in the UK. Executives accused successive governments of undervaluing vaccines and innovative medicines.
Industry experts warned the decision could deter other global firms from investing in Britain.
Government defends stance but admits more needed
A government spokesperson defended current research spending but conceded more must be done. Officials highlighted recent programmes but acknowledged rising global competition.
Drug makers have increasingly redirected investment to the US. They face pressure from Donald Trump’s administration, which has threatened steep tariffs on imported pharmaceuticals.
London projects abandoned and staff losses
Merck had already started building a site in King’s Cross, due for completion in 2027. The company now says it will not occupy the facility.
It will also vacate the London Bioscience Innovation Centre and the Francis Crick Institute. These exits will lead to 125 job losses by the end of the year.
A Merck spokesperson said the decision reflects Britain’s failure to address chronic underinvestment in life sciences. The spokesperson added that successive governments have undervalued medical innovation.
Experts see a wider pattern
Sir John Bell, emeritus professor of medicine at Oxford University, said he had spoken with global pharmaceutical leaders. They all indicated they are unwilling to expand in the UK.
He criticised the NHS for cutting its pharmaceutical budget. Ten years ago, 15% of spending went to medicines. Today that figure stands at 9%, while other countries spend between 14% and 20%.
Bell warned companies will invest elsewhere if Britain does not buy their products.
Industry leaders call for action
Richard Torbett, head of the Association of the British Pharmaceutical Industry, described the decision as a “serious blow.” He urged politicians to take urgent steps to prevent further losses.
He said weak competitiveness is the main issue. Chronic underinvestment, he added, has undermined the ability to turn innovation into products.
Merck is the latest company to cut UK plans. Earlier this year, AstraZeneca scrapped a £450m expansion in Merseyside, blaming poor government support.
Declining attractiveness of UK market
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 declining competitiveness.
In 2023, AstraZeneca chose Ireland for a new factory rather than Britain. High UK tax rates, the company said, discouraged investment in north-west England.
Industry sources said King’s Cross had become a hub for investment in life sciences and AI. They dismissed claims that Merck’s decision was caused only by pricing disputes.
US pressures reshape strategies
Pharmaceutical firms face pressure from Washington to lower costs for American patients. At the same time, they are urged to expand investment in the US.
In August, Trump warned tariffs on imported pharmaceuticals could reach 250%. The warning followed an executive order designed to cut drug prices in America.
Dr David Roblin, chief executive of Relation Therapeutics in London, said Britain still offers excellent research opportunities. He praised its universities, the NHS research platform, and the UK Biobank.
But he stressed that the US remains the largest pharmaceutical market. Political changes there, he added, are forcing global companies to adapt.
Political reactions
A spokesperson for the Department of Industry, Science and Technology said Britain remains attractive for global investors. But the official admitted challenges remain and promised support for affected staff.
Labour’s manifesto sets out a life sciences plan. It promises an NHS innovation and adoption strategy with faster approvals for medicines and technology.
The party also pledged clearer procurement routes and new incentives to strengthen innovation.
