How will Brexit affect the Pharma industry?

The UK’s pharmaceutical industry is one of the most important sectors in the country. Closely tied to the international market, and employing up to 70,000 national and international scientists, the pharma industry generates over 10% of the country’s GDP and continues to develop and market drugs that have saved lives around the world.

Any changes to this market due to Brexit are therefore likely to have far-reaching consequences within the industry. From research to pricing, every stage of drug development will be affected as legislation and market demand change and the country faces an uncertain future. Given the importance of the UK as a centre for pharmaceutical excellence, it also seems likely that the impact of Brexit will be felt around the world too.

What changes are on the horizon, and which approaches are pharmaceutical companies likely to take to tackle this over the coming year?

One thing that should be considered first is the type of deal that the UK will strike with the European Union come the 29th March 2019, the date that the country officially leaves. Though of course it would be in the pharmaceutical industry’s best interests to maintain close links to the EU, and to the European Common Market, this may not happen. Depending on what happens, the UK could remain as an EEA member, which would ensure the greatest market stability, and the greatest access to the Single Market. Furthermore, the pharmaceutical industry would continue to operate under the same trading rules and regulations as the rest of the EU. However, a Free Trade Agreement, or WTO deal, could also be signed, effectively cutting the UK market off from EU resources, funding and the single market. 

However, what seems clear is that the UK pharmaceutical industry will face a great deal of uncertainty around R&D funding. The UK is currently a part of many of the EU’s Research and Innovation Programmes, among which is Horizon2020, the largest life sciences public-private partnership in the world, which contains over fifty projects that fund research around the UK. When the UK leaves Horizon2020, it’s been estimated that £8.5bn of funding and investment will be threatened; as a result, many UK-based multinationals are considering transferring key research projects to the EU to ensure that they can still take part in international research programmes. In the UK, pharma and life science companies would have to compete for a shrinking pool of funding. 

Leaving the EU also poses a range of problems that must be addressed when it comes to attracting new talent, and maintaining trade links. In the past, American and Asian markets have invested heavily in the UK, setting up companies there in order to gain a foothold in the European market. After Brexit, if the UK does not secure a Switzerland-style deal to the EEA, many companies will look to the continent to secure continued access to unfettered trading; countries like Germany, the Netherlands and Belgium all have a strong pharmaceutical heritage, trained, skilled scientists and a highly English-literate population. 

A similar problem is also on the horizon when it comes to the labour force: of the 73,000 employed in the Biotech and pharma sectors in the UK, 7% are EU nationals, and many international companies based in the UK will employ a range of international, skilled scientists in everything from research to patents. Though it’s not yet certain what will happen, it seems likely that to avoid lengthy visa processes and costs, that many will relocate to the EU, leaving large numbers of vacancies in the UK for skilled positions across the industry. 

However, Brexit also brings with it opportunities for the UK to make the most of its current status as a world leader in clinical research and pharma. The medical resource centre Merck, Sharp and Dohme recently published plans for a new life sciences discovery research facility in the UK, supporting 150 research-based roles, whilst a new partnership was also announced between diagnostics company Qiagen, and Health Innovation Manchester, which aims to develop a genomics and diagnostics campus in the city, providing another 800 jobs. Furthermore, the government recently proposed new plans to ensure that products authorised for sale in the EU, like cars and medicines, could be sold after Brexit.

Alongside further forthcoming announcements of investment in Biotech and pharma sectors, it seems that some companies are still keen on making the most of Britain’s fundamental strengths: its excellent universities, world-class research facilities and London’s position as a global financial centre.

How should pharma companies deal with the uncertainty that accompanies Brexit? By taking the time to plan for uncertainty, and considering the main scenarios for the UK’s departure from the EU, taking into account labour, regulations and investment in order to better prepare for every eventuality. Though Brexit looks to be a major turning point in the history of the UK’s pharma and Life Sciences sector, it also offers new opportunities, new ways of doing business and opportunities to maintain the UK’s status as a leader in the industry. 

At IQVIA, we keep up to date with the latest news in the industry so we can continue matching the freshest talent with the best opportunities around the world. Find out more about life in the pharmaceutical industry here, or browse our jobs here.
 
Sources

https://www.pharmaceuticalonline.com/

http://www.bbc.co.uk/news/uk-politics-32810887 

http://www.bbc.co.uk/news/business-42213937 

https://ec.europa.eu/programmes/horizon2020/ 

http://www.greatplacetowork.co.uk/storage/documents/

https://pharmaphorum.com/views-and-analysis/beyond-brexit-uk-can-continue-attract-foreign-investment/ 

https://pharmaphorum.com/news/uk-pharma-welcomes-government-post-brexit-trade-paper/