US pharmaceutical giant Merck has cancelled plans for 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 relocate research to the US and cut jobs in the UK. Company leaders accused successive governments of undervaluing innovative medicines and vaccines.
Industry experts warned the decision could discourage other global drug makers from investing in Britain.
Government defends record but admits more to do
A government spokesperson defended current research spending but admitted further efforts are needed. Officials pointed to recent programmes but recognised that global competition is intensifying.
Drug companies have increasingly redirected investment to the US. They face pressure from Donald Trump’s administration, which has threatened tariffs on imported pharmaceuticals.
Projects scrapped in London and staff cut
Merck had already started building a new site in King’s Cross, due for completion in 2027. The company has now confirmed it will not occupy the facility.
It will also withdraw from 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 move reflects the UK’s failure to address long-standing underinvestment in life sciences. The spokesperson added that governments have undervalued the importance of medical innovation.
Warnings of wider industry retreat
Sir John Bell, emeritus professor of medicine at Oxford University, said he had spoken with several senior industry figures. They all confirmed they will not make new investments in the UK.
He criticised the NHS for reducing its spending on medicines. Ten years ago, pharmaceuticals made up 15% of the budget. Today that figure has fallen to 9%, while other countries spend between 14% and 20%.
Bell warned that companies will look elsewhere if they cannot sell their products in Britain.
Industry leaders call for urgent action
Richard Torbett, head of the Association of the British Pharmaceutical Industry, described the decision as a “serious blow.” He urged politicians to act quickly and prevent further corporate withdrawals.
He said the UK’s competitiveness is the main problem. Chronic underinvestment, he added, is limiting the ability to turn innovation into marketable products.
Merck is the latest company to scale back UK plans. Earlier this year, AstraZeneca scrapped a £450m expansion in Merseyside, blaming weak government backing.
Britain’s market appeal under pressure
Last month, another pharmaceutical executive warned NHS patients risk losing access to cutting-edge treatments. He described Britain as “largely uninvestable.”
Novartis executive Johan Kahlstrom said the company had already been unable to launch several medicines in the UK. He blamed falling competitiveness as the cause.
In 2023, AstraZeneca selected Ireland for a new factory rather than Britain. The company said high UK tax rates discouraged building in north-west England.
Industry insiders said King’s Cross had attracted significant funding at the intersection of life sciences and AI. They rejected claims that Merck’s decision was caused solely by disputes over pricing.
US politics shaping global investment
Drug companies are under pressure from Washington to cut costs for American patients. At the same time, they are being urged to expand investment in the US.
In August, Trump warned tariffs on imported pharmaceuticals could rise to 250%. The threat followed an executive order aimed at reducing domestic drug prices.
Dr David Roblin, chief executive of Relation Therapeutics in London, said Britain still offers strong research conditions. He praised leading universities, the NHS as a research platform, and the UK Biobank.
But he stressed that the US remains the largest pharmaceutical market. Political shifts there, he added, force global firms to adjust strategies.
Political response
A spokesperson for the Department of Industry, Science and Technology said Britain remains a strong global destination for investment. But the official admitted challenges remain and promised support for staff affected.
Labour’s manifesto includes a new life sciences plan. It promises an NHS innovation and adoption strategy with faster approval for medicines and technologies.
The party also pledged clearer procurement routes for companies and incentives to strengthen innovation.
