US pharmaceutical giant Merck has scrapped plans for a £1 billion expansion of its UK operations, dealing a major blow to Britain’s life sciences sector. The company, known as MSD in Europe, said it would move its research operations back to the United States and cut UK jobs, accusing successive governments of undervaluing innovative medicines and failing to invest sufficiently in the industry.
Merck confirmed it would abandon its new research hub in London’s King’s Cross, which was due for completion in 2027, and vacate its laboratories at the London Bioscience Innovation Centre and the Francis Crick Institute by the end of this year. Around 125 jobs are expected to be lost as a result.
In a statement, the company said the move “reflects the challenges of the UK not making meaningful progress towards addressing the lack of investment in the life sciences industry and the overall undervaluation of innovative medicines and vaccines.”
The decision comes amid broader shifts in global pharma investment. Large companies have been redirecting spending to the United States following pressure from President Donald Trump, who has threatened tariffs of up to 250% on imported drugs and signed an executive order aimed at cutting costs for American consumers.
Industry experts warned that Merck’s withdrawal could trigger a wider retreat by international pharmaceutical firms. Sir John Bell, emeritus regius professor of medicine at Oxford University, told the BBC he had spoken to several senior executives who were increasingly reluctant to commit further investment to the UK. He pointed to NHS spending patterns as a key issue, noting that Britain devotes just 9% of its healthcare budget to medicines compared with 14–20% in most OECD countries.
Richard Torbett, chief executive of the Association of the British Pharmaceutical Industry, described the announcement as “an incredible blow” and a “wake-up call” for policymakers. “The lack of competitiveness of the UK is the big thing that’s driven the decision,” he said.
Merck’s exit follows a series of setbacks for the sector. Earlier this year, AstraZeneca abandoned a planned £450m expansion in Merseyside, while last year it chose to build a new factory in Ireland instead of northern England due to tax concerns. Executives at other firms, including Novartis, have also warned that Britain risks becoming “largely uninvestable” if access to new treatments remains restricted.
Despite this, some industry leaders stress that the UK still offers world-class research opportunities. Dr David Roblin, chief executive of London-based Relation Therapeutics, said the academic environment and resources such as the UK Biobank continued to attract investment, but acknowledged that US political pressures were reshaping corporate strategy.
A government spokesperson defended the UK’s record, saying it remained “the most attractive place to invest in the world” but admitted “there is more work to do.” Labour has pledged to reform procurement rules and speed up regulatory approval for medicines as part of a new NHS innovation strategy.
