US pharmaceutical giant Merck has abandoned its £1 billion London research centre project and announced plans to cut 125 scientific jobs in the UK, dealing a significant blow to Britain's life sciences sector. The company, known as MSD in Europe, cited the UK's challenging business environment and government undervaluation of innovative medicines as key factors behind the decision.
Research Centre Cancellation
The planned UK Discovery Centre at the Belgrove House site opposite St Pancras and King's Cross stations was already under construction and scheduled to open in 2027. The facility was expected to employ approximately 800 people overall, including 180 scientists, and would have built on Merck's 100-year heritage in the UK.
Merck announced it "no longer plans to occupy the Belgrove House site at King's Cross" and will "discontinue discovery research operations in the UK." The company stated 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."
Job Losses and Site Closures
As part of the restructuring, Merck will vacate laboratories at the London Bioscience Innovation Centre, which hosts more than 60 life science companies, and the neighbouring Francis Crick Institute by the end of 2025. This will result in the loss of approximately 125 scientific jobs.
The New Jersey-based company said it would move the research operations to other sites, primarily in the United States, though it declined to provide further details about specific locations.
UK Government Challenges
The decision comes amid lengthy negotiations between the UK government and the pharmaceutical industry over medicine pricing that broke down last month. Under the voluntary pricing and access scheme (VPAS), companies agree to pay back a certain amount of revenue from newer, branded drugs. In 2023, the rebate rate rose to 23.5%, significantly higher than comparable rates of 5.7% in France and 7% in Germany.
US Investment Focus
Merck's UK withdrawal contrasts sharply with its major US investments announced earlier this year. The company committed to a $1 billion facility in Delaware to produce biologics and its blockbuster cancer drug Keytruda, expected to create over 4,500 jobs. The plant is slated to be operational by 2028, with experimental drug production starting by 2030.
Additionally, Merck opened a $1 billion facility at its North Carolina site in March and announced that its animal health unit will invest $895 million to expand its Kansas manufacturing and R&D site, part of a broader $9 billion US investment through 2028.
Industry Context
Pharmaceutical companies have been increasing investments in the US amid the Trump administration's tariff threats and pressure to move more manufacturing domestically. This trend reflects broader industry concerns about regulatory environments and government policies affecting drug pricing and innovation incentives.
Despite the research centre cancellation, Merck will maintain its UK headquarters at Moorgate and a large animal health site in Milton Keynes. However, the loss of the planned research facility represents a significant setback for the UK's ambitions to become a "global science and technology superpower" by 2030, as outlined by the previous Conservative government.
The current Labour government under Keir Starmer has described life sciences as "one of the crown jewels of the UK economy," making Merck's decision particularly concerning for the sector's future prospects in Britain.
