MSD calls off £1bn UK expansion amid government-big pharma tensions

Thu, Sep 11, 2025, 12:28 PM 2 min read

Merck & Co (MSD) has ditched plans for its £1bn R&D centre in London, UK, while ceasing drug discovery and research efforts across the country in a double blow to the national life sciences sector.

This news comes fewer than two years after the US-based pharma started construction on the R&D hub in King’s Cross, which was set to become the company’s UK headquarters.

On top of its pullback from new investments in the UK, MSD will also cease its UK-based R&D operations by the end of this year, meaning 125 scientists working at the London Bioscience Innovation Centre (LBIC) and the Francis Crick Institute will lose their jobs.

A spokesperson from MSD told Pharmaceutical Technology that these decisions were made in line with the company’s “multi-year optimisation” plan, which will see the company cut its global operational costs by $3bn by 2027. This plan was put in place after the company’s performance fell short of expectations in H1 2025.

The pharma also mentioned that UK operations became a casualty of cuts through the scarcity of “meaningful progress towards addressing the lack of investment in the life science industry”.

However, lacklustre investment was not MSD’s only source of discontent, as the pharma also took issue with the UK Government’s “overall undervaluation of innovative medicines and vaccines” – a sentiment that seems to be shared by key industry rival, AstraZeneca.

Last year, the UK-based big pharma, which is the largest British company by market cap, also abandoned its plans to build a $450m vaccine manufacturing facility in Liverpool, after government pledges of funding for the site fell short of expectations.

Since then, relationships have not appeared to have improved, as AstraZeneca’s CEO Pascal Soriot is mulling over a potential move for the company’s public listing to the US stock market.

The wider pharma industry is also despondent about the UK life sciences market. A report from the Association of the British Pharmaceutical Industry (ABPI) has revealed that foreign direct investment fell by 58% between 2021 and 2023.

This report dropped amid an ongoing stalemate between Big Pharma and UK Health Secretary Wes Streeting around NHS drug pricing, with him stating that he would not allow patients to be “ripped off” when pharma companies rejected his pricing deal. The ABPI warned that – if a deal is not reached – it will likely harm patients, as drug makers may choose not to launch their products in the UK.

"MSD calls off £1bn UK expansion amid government-big pharma tensions" was originally created and published by Pharmaceutical Technology, a GlobalData owned brand.