The U.K. faces a growing risk of losing pharmaceutical investment. That’s according to Oxford professor John Bell, a scientist who was involved in coordinating government and industry efforts during the COVID-19 vaccine rollout.
His remarks come after the U.S. drugmaker Merck & Co. Inc. (NYSE:MRK) announced it would cancel its planned around $1.36 billion (1 billion Sterling pounds) London research center, citing Britain's slow progress on life sciences investment and the undervaluation of innovative medicines by successive governments.
Speaking on BBC Radio 4's Today program, Bell said he had recently spoken with several chief executives of major pharmaceutical companies. "They're all in the same space," he said. "They're not going to invest anymore in the U.K."
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The Guardian report says his comments reflect a broader concern across the sector that current pricing and funding models in the U.K. are unsustainable for global drugmakers.
Bell also highlighted challenges beyond the U.K. In the U.S., pharmaceutical pricing is under intense scrutiny, with President Donald Trump pushing companies to lower drug prices and avoid selling products at significantly reduced rates in other markets.
In the U.K., the issue centers on how much the National Health Service (NHS) spends on medicines. He noted that a decade ago, 15% of the NHS's healthcare budget went to pharmaceuticals. That figure has now dropped to 9%, compared with other developed countries that allocate between 14% and 20%.
In August, drug pricing talks between the U.K. government and pharmaceutical companies collapsed, with industry leaders warning that the standoff could deter investment.
Health Secretary Wes Streeting described the government’s offer as “unprecedented,” but drugmakers argued that it still imposed excessive costs and requested to negotiate directly with Prime Minister Keir Starmer.
Under the U.K.'s voluntary pricing and access scheme, companies are required to rebate between 23.5% and 35.6% of their branded drug revenue to the NHS, compared with just 5.7% in France and 7% in Germany.
Bell warned that companies must operate where they can sell their products, and if that's not possible in the U.K., they will move elsewhere.
Science Minister Ian Murray described Merck's withdrawal as a commercial decision linked to global cost-cutting measures. Still, he acknowledged the decline in NHS spending on medicines was partly due to policies of previous Conservative governments.
Sharon Todd, CEO of the Society of Chemical Industry, added that the loss of Merck's research operations and reports that AstraZeneca Plc (NASDAQ:AZN) may relocate to the U.S. should serve as a warning to policymakers.
Price Action: MRK stock is down 2.01% at $83.44 at the last check on Friday.
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