“It is hard to think of an industry of greater strategic importance to Britain than its pharmaceutical industry”, a report prepared by the UK life sciences industry quotes the UK’s now Prime Minister as saying on 11 July 2016.
On 6 September 2016, the UK’s life sciences industry presented the report, reflecting initial thoughts on how to maintain and grow the UK’s life sciences sector in the context of leaving the EU to the UK EU Life Sciences Steering Committee, the joint industry-government task force set up after the Brexit vote in June in order to identify key priorities for the UK life sciences sector.
The report has been produced after an in-depth consultation involving representatives from industry, public sector, relevant trade associations, NGOs, charities as well as external experts.
The report identifies innovation, commercial and trade, regulation and people as four “baseline points” for the UK to address as part of the negotiations to leave the EU. For each of those four points the report sets forth the possible challenges for the UK as a result of leaving the EU, the industry’s recommended way forward, the benefits for the EU in such approach and the opportunities for the UK to pursue a UK specific industry strategy.
Unsurprisingly, the life sciences industry’s preferred position is for the UK to pursue a model which maintains the current system in terms of:
- Access to long term funding for research and development
- Access to talent of foreign workers
- Ability to trade and freely circulate goods and capital
- Continued alignment with and active participation in the common European regulatory system
Whilst all four points are identified as key, the report places particular importance on the last; preservation of the EU common regulatory framework. The report highlights – besides the economic impact – the possible effect on public health in the form of delay in access to innovative medicines and compromised patient safety. The industry recommends that the UK remain aligned with EU medicines and medical devices regulation, EU IP protection mechanisms (including regulatory data protection, supplementary protection certificates and orphan and paediatric incentives) and continue to actively participate in EU procedures. To this end, the report proposes that a regulatory cooperation agreement between the EU and the UK be established to allow the UK to continue to participate in EMA committees and European Commission medical devices committees. The report does not clarify what such active participation means and whether it would include voting rights for the UK in such committees. Non-EU Member States participating in the EU regulatory system today (i.e. Norway, Liechtenstein and Iceland) do not have such rights: A regulatory cooperation agreement is believed not only to be in the interest of the UK but also the EU, considering the significant contribution the UK has made to the EU regulatory system and the gap that would be created by the UK’s withdrawal from it.
One of the more pressing concerns in the short term is the current uncertainty over the position of EU workers in the UK and the potential perception that the UK is closed to foreign workers. The report states that the industry is already feeling the effects in attracting and retaining talent in the UK; the report urges the UK government to take immediate action to ensure that EU workers can continue to work and study in the UK.
To what extent the report’s preferred positions are achievable is uncertain at this point. Rather than a defined position for the years ahead, the report makes a starting point for developing thinking around the impact of the Brexit on the UK life sciences industry and beyond; reflecting the fact that many companies act on a multinational basis.
The Chief Executive of the Association of the British Pharmaceutical Industry (ABPI), Mr Thompson, revealed (as reported in the Financial Times on 20 September) that the report had been “very well received” by ministers. “We were the first sector to come forward with such considered views so it was helpful to them as they start to consider some of the issues” said Mr Thompson, adding that, while the industry was hoping to get a lot of what it pushed for in the report, it was unlikely to get everything it had asked for.
The UK government has received a boost from two high profile announcements in the pharmaceuticals industry since the Brexit vote, with the announcement by GSK at the end of July that it will be making £275 million of new investments at three of its manufacturing sites in the UK to boost production and support delivery of its latest innovative respiratory and large molecule biological medicines. The vast majority of these products will be for export to global markets. On 20 September, Alnylam, a growing US biotechnology company worth $6.5 billion, announced it would be investing hundreds of millions of pounds to establish its European drug development and commercial headquarters in the UK, building up a team of more than 100 people in Berkshire, UK. The decision was taken before the referendum in June and the company did then pause its plans but has now taken the decision to proceed. As reported in the Financial Times (20 September 2016), Dr Vaishnaw, Chief Medical Officer of Alnylam, has said “Whatever happens, the UK will remain a leader in the life sciences and clinical research – and in medicines regulation”.