AstraZeneca has paused plans to invest £200m at a Cambridge research site in a fresh blow to the UK pharmaceutical industry.

The project, which was set to create 1,000 jobs, was announced in March 2024 by the previous government alongside another project in Liverpool, which was shelved in January.

Friday’s announcement comes after US pharmaceutical giant Merck scrapped a £1bn UK expansion, blaming a lack of government investment, and as President Donald Trump pressures pharmaceutical firms to invest more in the US.

An AstraZeneca spokesperson said: “We constantly reassess the investment needs of our company and can confirm our expansion in Cambridge is paused.”

Over the last 10 years, UK spending on medicines has fallen from 15% of the NHS budget to 9%, while the rest of the developed world spends between 14% and 20%.

Meanwhile, pharmaceutical companies have been looking to invest in the US following Trump’s threats of sky-high tariffs on drug imports.

In July, AstraZeneca said it would invest $50bn (£36.9bn) in the US on “medicines manufacturing and R&D [research and development]”.

Earlier this week Merck, which had already begun construction on a site in London’s King’s Cross which was due to be completed by 2027, said it no longer planned to occupy it.

The multi-national business, known as MSD in Europe, said it would move its life sciences research to the US and cut UK jobs, blaming successive governments for undervaluing innovative medicines.

AstraZeneca’s announcement on Friday means none of the £650m UK investment trumpeted by the last government will currently happen.

The paused Cambridge project would have been an expansion of its existing Discovery Centre, which already hosts 2,300 researchers and scientists.

The stoppage comes after it scrapped plans to invest £450m in expanding a vaccine manufacturing plant in Merseyside in January, blaming a reduction in government support.

It said at the time that after “protracted” talks, a number of factors influenced the move, including “the timing and reduction of the final offer compared to the previous government’s proposal”.

Successive UK governments have pointed to life sciences as one of its most successful industries.

Former chancellor Jeremy Hunt said the sector was “crucial for the country’s health, wealth and resilience” while Chancellor Rachel Reeves said AstraZeneca was one of the UK’s “great companies” days before it scrapped its Liverpool expansion.