The decision by Merck to scrap its £1 billion London research centre signals a broader decline in UK pharmaceutical investment, raising urgent questions over government policy and the sector’s future competitiveness.
The recent cancellation by Merck of its planned £1 billion research centre in London has cast a harsh spotlight on the challenges facing the UK pharmaceutical sector, reigniting concerns over the country’s ability to attract and retain major investment from global life science companies. Merck, known as MSD in Europe, announced it would abandon the 25,000 sq ft facility near King’s Cross, which was in late-stage construction and expected to open in 2027. The move also entails the discontinuation of its discovery research operations in the UK, rendering approximately 125 scientific and support staff redundant by the end of 2025. According to company statements, this decision stems from a perception of the UK as an uncompetitive environment, characterised by a lack of meaningful progress in addressing investment shortfalls in the life sciences and what Merck described as the undervaluation of innovative medicines and vaccines by successive UK governments.
This development has sparked urgent scrutiny at the highest levels of government, with questions raised in both houses of parliament and a select committee convening an emergency session to address the fallout. The Department of Health has been prompted to seek renewed negotiations with pharmaceutical companies to stem further erosion of investment, although internal tensions persist. The Treasury has been criticised for short-termism, while some analysts and policymakers suggest that pharmaceutical companies are leveraging investment decisions to press for more favourable drug pricing arrangements. Industry sources indicate that the core issue revolves around the UK’s drug pricing policies, which in recent months have been marked by failed negotiations between the government and drug manufacturers regarding the proportion of pharmaceutical revenue returned to the National Health Service (NHS).
Industry representatives, including the Association of the British Pharmaceutical Industry (ABPI), warn that the UK’s stringent drug pricing stance is deterring foreign investment and imperilling innovation. Since 2017, the UK’s ranking for foreign direct investment in pharmaceuticals has slipped from second to seventh place globally, while R&D investment in the sector reportedly fell by nearly £100 million in 2023 alone. Data highlights a 58% reduction in direct foreign investment into UK life sciences between 2017 and 2023, with the total narrowing to £795 million. Such figures underscore a broader trend of underperformance against global investment flows and raise alarms about the UK’s competitiveness as a life science hub.
The government’s predicament is not unique to Merck. Earlier in 2025, AstraZeneca abandoned a separate £450 million investment in a vaccine manufacturing plant in northern England. The UK government criticised AstraZeneca for scaling back the research and development component of its plans, which led to a reduction in anticipated government support. This incident similarly highlighted the fragility of investment commitments amid fiscal and policy uncertainties and represents a significant setback for efforts led by the Labour Prime Minister Keir Starmer to boost economic growth through life sciences.
While Merck has indicated that its decision was unrelated to recent failed NHS drug pricing talks, the broader discourse clearly connects the dots between pricing policies, government support, and investment attractiveness. The company plans to relocate much of its research to established sites primarily in the United States, signalling a realignment of global R&D priorities away from the UK. This shift may constrain the UK’s ambition to cultivate a thriving life sciences sector and could have longer-term ramifications for scientific innovation, job creation, and the broader biomedical ecosystem.
Taken together, these developments highlight a critical juncture for UK pharmaceutical policy. To regain investor confidence and secure the development of cutting-edge medical innovations within its borders, the UK government faces mounting pressure to reconcile fiscal prudence with the need for a competitive and supportive environment for pharmaceutical research and development. Without meaningful intervention, the risk remains that the UK could lose out further in the global race for life science investment and innovation leadership.
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Source: Noah Wire Services
Noah Fact Check Pro
The draft above was created using the information available at the time the story first
emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
below. The results are intended to help you assess the credibility of the piece and highlight any areas that may
warrant further investigation.
Freshness check
Score:
10
Notes:
The narrative is current, with the latest developments reported on September 10, 2025. The Financial Times published an article on September 10, 2025, detailing Merck’s decision to scrap its £1 billion London research centre. ([ft.com](https://www.ft.com/content/5ace49a8-47ab-409d-8909-6edb107ce71a?utm_source=openai)) This indicates that the content is fresh and not recycled.
Quotes check
Score:
10
Notes:
The direct quotes in the narrative, such as Merck’s statement that “the UK is not internationally competitive,” are consistent with those reported in the Financial Times article from September 10, 2025. ([ft.com](https://www.ft.com/content/5ace49a8-47ab-409d-8909-6edb107ce71a?utm_source=openai)) This suggests that the quotes are accurately attributed and not reused from earlier sources.
Source reliability
Score:
10
Notes:
The narrative originates from reputable sources, including the Financial Times and Reuters, both known for their journalistic integrity and thorough reporting. ([ft.com](https://www.ft.com/content/5ace49a8-47ab-409d-8909-6edb107ce71a?utm_source=openai)) This enhances the credibility of the information presented.
Plausability check
Score:
10
Notes:
The claims made in the narrative align with recent reports from reputable outlets. For instance, Reuters reported on September 10, 2025, that Merck is scrapping its London research centre due to the UK’s challenging business environment. ([reuters.com](https://www.reuters.com/business/healthcare-pharmaceuticals/merck-scrap-london-drug-research-centre-2025-09-10/?utm_source=openai)) Additionally, the Financial Times highlighted the UK’s declining competitiveness in life sciences, corroborating the narrative’s claims. ([ft.com](https://www.ft.com/content/53543a40-a2ee-49a5-b395-9572a02120a8?utm_source=openai)) The narrative’s tone and language are consistent with standard journalistic practices, and the information is supported by multiple reputable sources, indicating high plausibility.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The narrative is fresh, with no evidence of recycled content. Quotes are accurately attributed and not reused from earlier sources. The information originates from reputable sources, enhancing its credibility. Claims are plausible and supported by multiple reputable outlets, indicating high confidence in the narrative’s accuracy.
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