Merck Pulls Out of UK R&D, Citing Undervaluation of Pharma Innovation

Pharmaceutical giant Merck has announced a significant withdrawal from its research and development operations in the United Kingdom, citing concerns over the country's perceived undervaluation of pharmaceutical innovation. This move, part of a broader cost-cutting initiative, will result in the closure of multiple facilities and the loss of numerous jobs.

$1.3 Billion R&D Center Scrapped, 125 Employees Affected

Merck has confirmed the termination of its plans to construct a $1.3 billion research and development center in London. This decision not only halts the creation of a state-of-the-art facility but also impacts approximately 125 employees who will lose their positions as a result. The company spokesperson stated that the move "reflects the challenges of the U.K. not making meaningful progress towards addressing the lack of investment in the life science industry."

In addition to abandoning the new center, Merck will be withdrawing from its existing laboratory facilities at the Francis Crick Institute and the London BioScience Innovation Center. The company expects to completely cease its R&D presence in the UK by the end of the year.

Part of Broader Cost-Cutting Strategy

This withdrawal from the UK is part of Merck's larger cost-reduction campaign, announced in late July, which aims to generate $3 billion in savings by the end of 2027. CEO Rob Davis explained the strategy during the company's Q2 earnings call, stating, "We're looking to reallocate ... resources from the slower growth areas of the business to fully fund into the fast-growing areas of our business."

The cost-cutting measures have already led to significant workforce reductions. Shortly after the initial announcement, Merck revealed plans to reduce its global workforce by 8%, affecting around 6,000 employees. This followed earlier layoffs in 2025, including 58 employees from its New Jersey headquarters in August and 163 from a Pennsylvania manufacturing site in March.

Industry Implications and Future Outlook

Merck's decision to withdraw from the UK raises questions about the country's attractiveness as a hub for pharmaceutical research and development. The company's spokesperson highlighted an "overall undervaluation of innovative medicines and vaccines" by successive UK governments, suggesting potential challenges for other pharmaceutical companies operating in the region.

As Merck reallocates its resources, the company aims to support more than 20 commercial launches of pipeline assets nearing the market. This strategic shift may signal a broader industry trend of pharmaceutical companies reevaluating their global R&D footprints and focusing investments in regions perceived as more supportive of innovation in the life sciences sector.