Merck, the US pharmaceutical giant known as MSD in Europe, has abruptly halted its ambitious £1 billion expansion in the United Kingdom, sending shockwaves through the country’s life sciences sector and raising urgent questions about Britain’s future as a global research hub. The company announced on September 10, 2025, that it would relocate its life sciences research operations to the United States, resulting in 125 job losses and the vacating of key laboratory spaces in London by the end of the year.
This decision has left many in the industry reeling. Construction had already commenced on Merck’s new facility at London’s King’s Cross, a project slated for completion in 2027. Now, that site will remain unoccupied by the company, and Merck will also exit its laboratories at the London Bioscience Innovation Centre and the Francis Crick Institute. The move, the company said, is a direct response to what it sees as years of underinvestment and a lack of appreciation for innovative medicines and vaccines by successive UK governments.
“This decision reflects the challenges of the UK not making meaningful progress towards addressing the lack of investment in the life science industry and the overall undervaluation of innovative medicines and vaccines by successive UK governments,” a Merck spokesperson told the BBC.
The ramifications of Merck’s withdrawal are already being felt beyond its own operations. Sir John Bell, emeritus regius professor of medicine at Oxford University, described the announcement as part of a broader trend. “I’ve spoken to several bosses of major companies in the past six months, and they’re all in the same space, and that is, they’re not going to do any more investing in the UK,” he told BBC’s Today programme. The core issue, Sir John argued, is the declining proportion of the National Health Service’s (NHS) budget spent on pharmaceuticals. “Ten years ago, we used to spend 15% of our healthcare spend on pharmaceuticals. Now it’s 9%. The rest of the world, the OECD, are sitting between 14 and 20%,” he explained. For large pharmaceutical companies, the ability to sell their products in a market is crucial, and if the UK is no longer attractive, investment will flow elsewhere.
The industry’s concerns are echoed by Richard Torbett, head of the Association of the British Pharmaceutical Industry (ABPI), who called Merck’s decision “an incredible blow.” Speaking to the BBC’s Wake Up To Money programme, Torbett said, “We’ve really got to see it as a wake up call to try and understand what is driving companies to make these difficult decisions and what can we do to turn that round.” He added, “The lack of competitiveness of the UK is the big thing that’s driven the decision. We’ve got systematic under-investment in the products that come out of the end of innovation.”
Merck is not alone in its retreat. In January 2025, AstraZeneca abandoned plans to invest £450 million in expanding a vaccine manufacturing plant in Merseyside, citing reduced government support. Earlier, in 2023, AstraZeneca opted to build a new factory in the Republic of Ireland instead of north-west England, blaming a “discouraging” UK tax rate. The UK boss of another pharmaceutical giant, Novartis, recently warned that NHS patients could lose access to cutting-edge treatments because Britain had become “largely uninvestable.” Novartis’s Johan Kahlstrom noted the company had “already been unable to launch several medicines” in the UK due to the “declining competitiveness” of the market.
Industry insiders told the BBC that the King’s Cross area had been attracting significant funding, particularly at the intersection of life sciences and artificial intelligence. However, they rejected the idea that Merck’s decision was solely linked to ongoing negotiations over drug prices. The current pricing regime, set in 2023 and agreed to by drug companies, is less than 18 months old. Instead, global political pressures are playing a significant role.
Pharmaceutical companies have been refocusing on investments in the US, spurred by pressure from President Donald Trump’s administration. Trump has threatened tariffs on imported pharmaceuticals as high as 250%, following an executive order in May aimed at lowering drug prices for American consumers. In an August interview with CNBC, Trump reiterated the possibility of sky-high tariffs, a move that has influenced companies like Merck to prioritize US operations.
Dr David Roblin, chief executive of London-based Relation Therapeutics, argues that the fundamentals that made the UK attractive for research remain strong. “The academic environment in the UK continues to produce innovative ideas and people to run with those ideas, which attracts foreign investment,” he told the BBC. “The environment to do research is still outstanding: we’ve got great academics, the NHS does provide a research platform, for example the UK Biobank is proving to be a real attractor for companies like mine.”
Yet, Dr Roblin acknowledged that the political landscape in the US is shaping big pharma’s global strategy. “The US remains the largest market for pharmaceuticals on earth,” he said, and companies must respond to changes there, even if the UK itself remains scientifically vibrant.
The UK government, for its part, has defended its record. A spokesperson for the Department of Industry, Science and Technology stated, “The UK has become the most attractive place to invest in the world, but we know there is more work to do. We recognise that this will be concerning news for MSD employees and the government stands ready to support those affected.”
Meanwhile, the Labour Party has pledged reforms in its 2025 election manifesto. The party promises an NHS innovation and adoption strategy in England, aiming to streamline procurement and provide a clearer route for new products to enter the NHS. The plan includes reformed incentive structures to drive innovation and faster regulatory approval for new technology and medicines.
This string of setbacks has exposed deep-rooted challenges in the UK’s approach to life sciences and pharmaceuticals. The country’s world-class research institutions and vibrant academic community continue to draw global admiration. However, when it comes to converting scientific breakthroughs into commercial and clinical impact, persistent issues with government investment, drug pricing, and market competitiveness are prompting companies to look elsewhere.
For the 125 Merck employees losing their jobs, and for the broader UK life sciences sector, the news is a sobering reminder that global investment is never guaranteed. As the government and industry leaders grapple with the fallout, the future of Britain’s pharmaceutical landscape hangs in the balance, awaiting decisive action to restore its competitiveness and allure.
