Merck scraps £1bn London research centre, cites UK 'not internationally competitive'

Merck has abandoned plans for a £1 billion research centre in London, saying the UK is "not internationally competitive" and announcing that it will move related research activity to the United States. The company said the decision to mothball the King's Cross facility — originally scheduled to open in 2027 — will lead to the loss of 125 scientists and support staff.

Merck, known in the UK as MSD, said the move "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." The company told the Financial Times that "unless a change is made to the operating environment... more companies will be making these sorts of decisions."

The decision comes as the Association of the British Pharmaceutical Industry (ABPI), working with PwC, published a report warning that the UK risked losing attractiveness for medical research and investment. The report said foreign investment into the UK's life sciences sector fell 58% between 2017 and 2023 and that the country had slipped to seventh place from second in global rankings for locations considered best for medical research and investment.

The ABPI-PwC analysis noted that only 9% of UK healthcare spending was allocated to developing medicines, compared with 20% in Japan and 15% in the United States, and flagged comparatively poor patient access to new drugs. The report also highlighted a contentious NHS rebate scheme that requires drug firms to repay 23.5% of revenue from sales to the health service, a policy industry figures say undermines commercial predictability.

Rippon Ubhi of Sanofi said the UK was "increasingly being viewed as 'uninvestable' in global boardrooms due to unprecedented clawback rates and restrictive patient access to medicines." ABPI chief executive Richard Torbett described Merck's cancellation as "a real blow to the UK's life sciences ambitions" and said the announcement should prompt reflection on the factors that drive companies to such decisions.

The move is the latest sign of high-profile corporate caution about investing in the UK. It follows comments from Sir Jim Ratcliffe and his chemicals firm Ineos that it was scaling back further investment in Britain, and public warnings from business figures about the country's economic outlook. Observers say decisions by major global companies to relocate or curtail UK investment carry implications for jobs, research capacity and the government's industrial strategy.

Merck's announcement was released as industry groups and some executives called on policymakers to address the structural and fiscal issues the sector cites. The company did not provide a timetable for the relocation of research activities, and there was no immediate detailed response from the UK government.