The great debate: Brexit still raising concerns for pharma

EPM's Lu Rahman looks at the UK pharma sector and its uncertain relationship with Europe.

The debate around Brexit and its impact on the European economy isn’t showing any signs dying down. As might be expected, from one day to the next we have conflicting output about the on-going effect of the UK’s decision to leave the EU – and the pharmaceutical sector is an integral part of this conversation.

The size of the UK pharmaceutical sector is considerable. According to the ABPI, over the last decade the sector has generated a trade surplus - £1.1 billion year, which is greater than any other industrial sector in the UK. From R&D to developing a pipeline of drugs, the UK market contributes significant exports to the EU and beyond.

The UK’s Brexit decision has created many questions – going forward will it have enough skills to maintain the sectors’ excellence? What will happen to the 6,000 or so life science researchers from EU countries? How are the major pharmaceutical companies that have made the UK their base, viewing their future in this country?

The recent news that pharma giant GSK is planning to invest £275 million in three of its manufacturing sites in the UK, has been viewed as good post-Brexit news and evidence that the country is open for business. The investment will boost production and support the delivery of the company’s respiratory and large molecule medicines. With the majority of these products being for global export, the investment has been seen as a positive step with GSK highlighting the UK as an “attractive location for investment in advanced manufacturing due to the number of factors including the skilled workforce, technological and scientific capabilities & infrastructure and a competitive corporate tax system".

Not everyone is so optimistic however. The Guardian newspaper in the UK recently claimed that the UK economy was beginning to show signs of a post-Brexit decline. And not surprisingly, a global eye is watching the UK economy. Peter Gough from the US public health and safety organisation, NSF International, discusses a range of issues that may potentially affect the pharmaceutical sector going ahead. He examines pharmaceutical legislation:

“Until recently most EU pharmaceutical legislation has been issued as directives, which means that these directives have already been transposed into UK legislation; mostly in The Human Medicines Regulation 2012 (Statutory Instrument 2012-1916). However, this statutory instrument (SI) will almost certainly have to be revised as it has been issued under the authority of the European Communities Act 1972, which will have to be repealed, and contains numerous references to EU directives. The replacement legislation could revert to the Medicines Act 1968, which was the governing legislation in the UK prior to 2012, but hopefully will be substantively unchanged.”

Hough says the future of legislation will depend “on the outcome of the negotiations between the UK and the EU. The most logical outcome for medicinal products would be for the UK to adopt the Swiss model. This would require the minimum re-writing of the existing UK legislation and could be applied to future EU changes whether they are issued as directives or regulations.”

Of course no one knows yet how the UK’s relationship with the rest of Europe and the world will pan out. Hopefully clinical research and the development of drugs to benefit the global community remain strong as pharmaceutical companies, both here and Europe, continue to see the benefit of doing business in as well as with, the UK.