US pharmaceutical giant Merck, known in Europe as MSD, has cancelled plans for its £1bn UK Discovery Centre in London and will lay off 125 scientists this year, marking a major setback for Britain’s ambitions to become a global leader in life sciences.
The move underscores growing concerns about the UK’s competitiveness in pharmaceutical research and investment, despite government pledges to position life sciences as a “crown jewel” of the economy.
Merck Abandons London Project
The UK Discovery Centre at Belgrove House, opposite King’s Cross and St Pancras stations, was already under construction and expected to employ 800 staff, including 180 scientists. However, MSD has announced it will no longer proceed with the facility and will vacate its laboratories at the London Bioscience Innovation Centre and the Francis Crick Institute by the end of 2025.
While the company confirmed that research operations will be shifted elsewhere, it declined to specify whether they would move to the US, where Donald Trump has urged drugmakers to boost domestic investment.
Industry Criticism of UK Policy
In a statement, MSD said its decision reflected “the lack of meaningful progress” by successive UK governments in supporting the life sciences sector and undervaluing innovative medicines.
The announcement comes amid tensions over the UK’s voluntary pricing and access scheme, which forces pharmaceutical companies to return part of their drug sales revenue. The rebate rate jumped to 23.5% in 2023, far higher than in France (5.7%) and Germany (7%), prompting warnings from industry leaders that the UK is becoming “uninvestable.”
A Decline in Global Standing
A joint report by PwC and the Association of the British Pharmaceutical Industry (ABPI) revealed that UK life sciences investment has sharply declined since 2018. R&D investment growth slowed to 1.9% annually from 2020, compared with a global average of 6.6%. By 2023, foreign investment in UK life sciences had dropped to £795m, down 58% from 2017 levels, pushing Britain from second to seventh place in global rankings.
The UK has also fallen in clinical trials, ranking eighth globally in 2023 compared with fourth in 2017. Industry leaders, including Sanofi’s UK head and Novartis executives, have warned that high costs and restrictive NHS policies are deterring investment and limiting patient access to new medicines.
Government Response and Future Outlook
Prime Minister Keir Starmer’s government has promised to restore confidence in the sector, with Health Secretary Wes Streeting vowing not to let firms “rip off taxpayers.” Chancellor Rachel Reeves has reiterated the target of making the UK Europe’s leading life sciences hub by 2030.
However, with only 37% of new medicines fully available in the UK compared with 90% in Germany, analysts warn that the country risks losing out to rivals making aggressive moves to attract pharmaceutical investment.
Richard Torbett, CEO of the ABPI, cautioned: “The UK has a world-class science base and the potential to lead in developing next-generation medicines, but without a competitive environment, we risk falling further behind.”
