The Impact of Brexit on the UK Pharmaceutical industry
We’re now over a year on from the momentous Brexit vote of 2016, and the future looks little clearer than it did when the decision to leave the EU was taken over 14 months ago, although what will be the Impact of Brexit?
What is clear, however, is that Brexit will have a negative and possibly calamitous impact on the UK pharmaceutical industry.
The Border chaos in Ireland
One of the most unclear things about Brexit is how a new border with Ireland will work. Pharmaceutical goods currently flow freely between the north of the country and the rest, with many UK pharma companies offering next-day delivery to the Republic, meaning profits could be damaged badly should a so called ‘hard border’ be established.
This is also especially important for the pharmaceutical industry due to the nature of its products.
Could lives be lost from vital medicines and drugs not being able to be delivered on time thanks to massive traffic jams and long waits at new border controls?
European Funding Issues
The UK currently receives a huge amount of funding from the European Research Council in the form of grants (more than any other country, in fact) and would likely become ineligible for these once it leaves the EU.
It is estimated a whopping £8.5 billion ($12.3 billion) of funding and investment in the next four years alone is now in jeopardy.
On top of this, British scientists would lose their priority access to a wide range of other top European research facilities, a daunting prospect which can only have a negative effect on the UK pharmaceutical industry.
Pharmaceutical research and development funding is also the highest intensity out of all sectors, even more than software and development.
Many in the UK pharmaceutical industry are now lobbying for a ‘soft Brexit’ to avoid a huge drop in funding and access to the mass research currently funded by the EU.
Tarif Free Market Access
This is perhaps the biggest looming problem facing the UK pharmaceutical industry.
The UK’s unfettered, tariff-free access to the European market creates millions of jobs in Britain and opens the door to hundreds of millions of customers for UK pharma companies.
Leaving the EU would have a horrific effect UK business, so much so that the EMA (European Medicines Agency) recently recommended that UK-based pharmaceutical businesses up sticks and move their operations abroad in order to retain access to the single market.
The Soft or Hard Brexit Considerations
Having said this, the above is only dependent upon the UK seeking what has been coined as a ‘Hard Brexit,’ where the UK completely severs ties with the single market in search of new trade agreements.
A ‘Soft’ Brexit could see the UK remain in the European Economic Area, the same as countries such as Iceland and Norway.
Although this would still harm the UK pharma industry slightly due to EEA countries only having ‘observer’ status and therefore having less ability to influence EU regulations, trading arrangements would remain largely the same and the overall situation of the UK pharmaceutical industry would be, overall, similar to what it is now.
No doubt as the negotiations continue with the European Union, The UK’s position will need to be very carefully considered through the negotiations, the key question is whether it is even possible for either party to get the best deal, and how the pharmaceutical market will be impacted…time will tell. LF&E will continue to service the pharmaceutical market and companies with
LF&E’s Stability In Pharmaceutical Logistics
LF&E will continue to service the pharmaceutical market and its companies with its premium service to ensure logistics stability is maintained in what could be a chaotic period.
Whatever we do and whatever we deliver, it’s the patients who are our highest priority. They’re the ones the medicines are for, so it’s imperative they receive quality every step of the way.