Merck Cancels £1bn UK Expansion Amid Claims of Poor Government Support
The UK pharmaceutical sector has suffered a major setback after U.S. drugmaker Merck & Co., known as MSD in Europe, announced it is abandoning plans for a £1 billion expansion in London. The company will instead move its life sciences research to the U.S., citing what it described as years of insufficient government investment in innovative medicines.
The decision will result in the closure of Merck’s labs at the London Bioscience Innovation Centre and the Francis Crick Institute by the end of the year, leading to the loss of 125 jobs. It also means the company will no longer occupy a new King’s Cross site that was already under construction and scheduled for completion in 2027.
“This reflects the challenges of the UK not making meaningful progress toward addressing the lack of investment in the life sciences industry and the overall undervaluation of innovative medicines and vaccines by successive governments,” a Merck spokesperson said.
The announcement comes amid rising competition for pharmaceutical investment globally, with U.S. President Donald Trump pushing drugmakers to focus their resources at home. Trump has even threatened tariffs of up to 250% on pharmaceuticals imported to the U.S., forcing many companies to reassess international projects.
Science minister Ian Murray called Merck’s decision “deeply disappointing” but said it was ultimately a commercial choice. He acknowledged that pharmaceutical companies were receiving a shrinking share of NHS spending, a problem he partly attributed to policies from past governments.
However, Conservative shadow science secretary Julia Lopez criticized the government’s response, warning: “Simply put, the UK is not internationally competitive. The government must wake up, and do so now.”
Industry experts fear Merck’s withdrawal could trigger a broader pullback by other major pharmaceutical firms. Sir John Bell, Oxford University’s emeritus regius professor of medicine, told the BBC he had spoken with several industry leaders who said they would no longer invest in the UK.
“Ten years ago, 15% of healthcare spending went to pharmaceuticals,” Sir John said. “Now it’s just 9%, while in other developed countries it’s between 14% and 20%. If companies can’t sell their products here, they will go elsewhere.”
Richard Torbett, CEO of the Association of the British Pharmaceutical Industry, described the move as “an incredible blow” and urged the government to address what he called “systematic under-investment” in medical innovation.
Merck is not alone in scaling back UK operations. Earlier this year, AstraZeneca scrapped plans to invest £450 million in a vaccine plant in Merseyside, choosing instead to build a new facility in Ireland due to what it called “discouraging” UK tax rates. Swiss giant Novartis has also warned that declining competitiveness is making Britain “largely uninvestable.”
Despite the challenges, some experts maintain that the UK remains a strong hub for scientific research. Dr. David Roblin, CEO of London-based biotech firm Relation Therapeutics, noted that the UK still has world-class academic talent and research infrastructure, such as the UK Biobank.
However, with the U.S. being the largest pharmaceutical market globally, Dr. Roblin acknowledged that U.S. political pressures are heavily influencing investment decisions.
The Department of Industry, Science and Technology said it was ready to support affected Merck employees and reiterated that the UK remains a highly attractive destination for foreign investment, while admitting “there is more work to do.”
Labour, in its election manifesto, pledged to create an NHS innovation and adoption strategy aimed at speeding up the introduction of new technologies and medicines.
For now, however, industry leaders warn that Merck’s exit could signal a troubling trend for the UK’s position in the global life sciences market.
