Key Summary
- Merck has decided not to go ahead with building the London research centre and is laying off 125 scientists this year
- It will also vacate its laboratories in the London Bioscience Innovation Centre and the Francis Crick Institute by the end of the year
- The company spokesperson claimed that the UK was not doing enough to address the lack of investment in the life science industry
In a major blow to Keir Starmer government's push to invigorate the life sciences sector, US drugmaker Merck has decided to scrap its plan to invest £1billion in the UK.
Merck, known as MSD in Europe, has decided not to go ahead with building the London research centre and is laying off 125 scientists this year.
The company spokesperson claimed that the UK was not making "meaningful progress towards addressing the lack of investment in the life science industry" and blamed successive governments for undervaluation of innovative medicines and vaccines.
Merck had already begun construction of the research centre and was due to be completed by 2027, but said it no longer planned to occupy it.
The New Jersey-based company will also vacate its laboratories in the London Bioscience Innovation Centre and the Francis Crick Institute by the end of the year.
Talks between the government and the industry over the cost of medicines for the UK broke down last month.
Under the voluntary pricing and access scheme, companies agree to pay back a certain amount of revenue they make from newer, branded drugs.
In 2023, the rebate rate rose to 23.5 percent, which compares with 5.7 percent in France and 7 percent in Germany.
Association of the British Pharmaceutical Industry (ABPI) chief executive Richard Torbett has termed MSD's announcement as a blow to the UK’s life sciences ambitions.
The UK’s share of global health research and development investment has fallen from 7.3 percent to 5.7 percent over three years.
The UK president of AstraZeneca, Tom Keith-Roach, recently said it was “hard to champion” the country as a place for investment and research.
AstraZeneca had earlier this year dropped its plan to invest £450m in expanding a vaccine manufacturing plant in Merseyside, blaming reduced government support.
Novartis UK president Johan Kahlström also recently said that it was “very difficult for global boardrooms to justify investments in the UK”.
Pharmaceutical companies are also under pressure from Donald Trump to invest more in the US.
