Next Steps Uncertain for the UK Pharma Industry Post Brexit Vote

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In the wake of Britain’s decision to exit the EU, pharma companies face uncertainty.

Britain’s decision on June 24, 2016 to exit the European Union may mean changes are ahead for UK pharma companies. One of the biggest changes the industry is likely to face is the potential relocation of the London-based European Medicines Agency (EMA) to a city within the EU, Reuters reports. The industry may also face changes to the regulatory approval system, forcing companies to receive separate approvals from Britain and the EU, and potentially slowing access to the EU market.

According to Reuters, “industry executives fear upheaval at the EMA could snarl the EU’s drug approval process and Britain may have to develop its own domestic regulatory system.” If Britain remains in the European Economic Area, it is possible that it could continue to participate in the EMA system, but many oppose this option, Reuters writes.

A Deloitte report suggests Brexit may also have an impact on the UK’s pharmaceutical labor force. Because many R&D facilities in the UK are staffed by individuals from across the EU, Brexit may make it more difficult for companies to attract and retain employees, the report noted. The possibility for new visa, resident, and work permit rules may also impact Britain’s pharmaceutical labor force.

Brexit’s potential impact on the pharma industry has led various UK industry representatives to speak out against Britain exiting the EU. In May 2016, Sir Andrew Witty, CEO of GlaxoSmithKline (GSK) and 92 other life-sciences figures voiced their opposition to Brexit in a letter in the Observer, indicating concern about potential changes to the drug approval process. Leaving the EU, they wrote, “would bring added complexity and uncertainty, which is bad for business and research.”

Witty, who announced earlier this year he would be stepping down from his post at GSK in March 2017, has been particularly vocal in his opposition to Brexit. In a statement to Reuters he said from a business and economic perspective the UK was better off staying inside the EU. “It's very unclear to me what exactly the rule set would be on the outside. I think it runs the risk of creating long periods of uncertainty with no obvious route to a simpler world than the one in which we operate," he commented. 


Glenn Crocker, CEO of BioCity, a UK-based incubator for life-science startups, also voiced his opposition to Brexit. In a statement released on June 24, 2016, he commented that he was “deeply concerned” about Brexit’s impact on UK research and funding for smaller companies. “I am also concerned about the impact on the free movement of labor and the restriction on the skills base if the UK turns inwards,” Crocker says.

Mike Thompson, CEO of the Association of the British Pharmaceutical Industry (ABPI), a trade organization for British pharmaceutical companies, added to the commentary, saying Brexit will create challenges for the future of business and investment in the UK. "The voice of the British people has been heard. This creates immediate challenges for future investment, research, and jobs in our industry in the UK. With that being the case, we are committed to working closely with the government to agree what steps need to be taken to send a strong signal that the UK is open for business," he added.

Steve Bates, CEO of the UK BioIndustry Association (BIA) said in a statement although this is not the outcome they had wanted, the UK life-sciences sector is a “resilient community, unfazed by new challenges.” He also noted there are key questions still to be addressed including the future of regulation, talent, intellectual property, and the future relationship of Europe and the UK.

Source: Reuters, BioCity, Deloitte, ABPI, BIA