A Hard or Soft Brexit? More Uncertainty for the Life Sciences Industry

Jun 11, 2017

No-one thought Brexit would be easy and so far, the going has only gotten tougher. UK Prime Minister Theresa May had hoped that by calling an early election that she would have a stronger negotiating position with the European Union (EU). She was wrong.

The results of the June 8 election have resulted in a hung parliament. Negotiations are ongoing between the Conservatives and the Democratic Union Party (DUP) in order to secure a slim majority in the House of Commons.

That there is still uncertainty about just who will be governing the UK at the time of writing doesn’t bode well for good preparation for the beginning of talks with the EU, due to start on June 19 (although that seems bound to slip). You’d hope much would already be in the negotiators minds — assuming that Theresa May does indeed stay in power and her key negotiators remain — the days before are crucial for getting into the right mindset.

Upsides for industry from a "soft Brexit"?

Commentators are still unclear on just how far a central tenet of the negotiations will have changed given the results of the UK election. May was pursuing a hard Brexit, and a "no deal would be better than a bad deal" mantra. That could be changing as the DUP are reportedly more in favour of a soft Brexit. That’s driven in large part by the very particular geography of Northern Ireland: they share a land border with the EU Member State of Ireland.

The implications for the life sciences industry are still difficult to predict, but a soft Brexit might mean that the UK will now want to stay in the single market and accept freedom of movement of people. With many working in the UK in life sciences from Europe — and further afield — securing freedom of movement is helpful.

A soft Brexit might also mean that the UK pays to play in EU research programs. The trouble is that the UK has not only played, but often been a leader within programs, and that influence has arguably been lost irrespective of the final Brexit deal.

It also seems a foregone conclusion that the European Medicines Agency (EMA) will move out of London, although whether the UK will still be part of the European marketing authorization process is still up for grabs.

Even aside from the question of negotiations between the UK and the EU there’s still a lot to do on UK soil too. The independent Accelerated Access Review that explored what could be done to counter the UK’s ‘low and slow’ uptake of innovation, is still awaiting a full Government response. The new life sciences industrial strategy is also still a work-in-progress.

Then there are the issues of pricing and reimbursement. A successor to the 2014 Pharmaceutical Price Regulation Scheme (PPRS) – the voluntary agreement between industry and the Government that indirectly regulates prices – needs to be negotiated and agreed before the end of the current scheme on December 31, 2018. Plus consultations need to follow to implement the new statutory scheme for pricing of branded medicines – this applies to companies who choose not to be members of the PPRS – after the Health Service Medical Supplies (Costs) Act 2017 just managed to be passed before the dissolution of Parliament that preceeded the June 8 election.

Change is the new normal

Brexit was already seen as a distraction from getting the business of making medicines done. The Brexit shadow looms darker as so many anticipate that Theresa May will have to go; for many it’s a question of when, and not if. That could mean a new Government, new negotiators and new MPs in positions of power that the industry will need to educate, inform and influence. That’s something that industry is more than able to do, but it’s time consuming and still won’t necessarily lead to the speedy decisions that industry — and patients —need.

 

 

 

 

 

 

 

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