Contribution
I start by welcoming the hon. Member to her new role. I wanted to do that yesterday, but time ran away from us during questions. I am answering this question on behalf of the Secretary of State.
As a significant life sciences company that employs more than 1,600 people and plays a leading role in delivering new treatments for diseases such as cancer, Merck—known as MSD in the UK—is a valued partner to this Government, and a key player in the life sciences ecosystem. MSD’s decision to not progress its investment in King’s Cross—a commercial decision for MSD—is therefore deeply disappointing.
King’s Cross is a shining example of the strengths of UK life sciences clusters. It is one of the biggest in Europe, employing more than 60,000 people in the area. It has had investment from major life sciences companies, including Novo Nordisk, GlaxoSmithKline and AstraZeneca. It houses world-leading institutions, such as the Francis Crick Institute and the Wellcome Trust, as well as some of the country’s leading biomedical research centres. University College London hospital, Great Ormond Street hospital and Moorfields eye hospital are also based there.
We are proud of this industry; it has delivered great things for our country in the past, does so today and will continue to do so in the future. That is why life sciences is one of the eight priority sectors in the industrial strategy, and is backed by £2 billion of public investment to enable it to grow, lead the world and make great discoveries, such as personalised cancer vaccines and the new test for Alzheimer’s disease. MSD’s investment in the area would have enhanced the sector’s status further, and the fundamentals of the UK market are actually more advantageous today than when it made the decision to invest in this project. What has changed are the US and international fundamentals.
The UK has become the most attractive place to invest in the world, but of course, there is still a lot more for this Government to do. The academic environment in the UK continues to produce innovative ideas, and the talent to run with those ideas, which attracts foreign investment. The environment for research is outstanding; we have great academics; and the NHS provides a research platform that is second to none.
The decision is in part due to a broader effort by MSD to ensure that the company is optimising its investment and focusing its resources on its key drivers of growth. As such, it is not continuing its job discovery operations in the UK. The company has recently announced in its quarterly report that it is to cut $3 billion a year from its operating costs, resulting in a significant impact on its share price. That is compounded by an ever more challenging and uncertain global economic situation as regards trade and tariffs.
The problem with NHS medicines goes back 15 years— I wonder who was in charge over that period. Spending on NHS medicines has fallen from 15% to 9% in that time, and the last joint agreement on medicine prices by the sector and the previous Government was in 2023. We are living with the consequences of under-investment by the previous Government, who took their eye off the ball when it comes to NHS medicine investment. My right hon. Friend the Health and Social Care Secretary made a £1 billion offer to the sector in the summer. However, the Government also recognise that we need to do more to support and grow our life sciences sector. We have already started delivering on the work of investing £600 million in the health data research service alongside the Wellcome Trust, and are committing up to £520 million for life sciences innovation and manufacturing, unlocking billions of pounds. We continue to work closely with the sector to unlock growth and ensure life-changing treatments and technologies for this innovative sector.
MSD will continue to be a key investor in the UK. I welcome its continued investment in clinical trials, and its significant partnerships with our institutions, such as Our Future Health. MSD will continue to employ 1,600 people. We remain closely engaged with MSD as we take forward the life sciences sector plan and the 10-year NHS plan.