With an uncertain election result looming, the life sciences industry may soon see challenges to Sweden’s traditionally smooth political climate. On September 9, Swedes elect the members of the Swedish Riksdag (Parliament), which in turn will elect a new Prime Minister. The 349 seats in the Swedish Riksdag are allocated through a proportional electoral system.
Traditionally, Swedish politics has been dominated by two blocs, roughly representing the political left (Left Party, Green Party and Social Democrats) and right (Moderate Party, Centre Party, Liberals and Christian Democrats), resembling a two-party system. However, the results of recent opinion polls show the nationalist Sweden Democrats emerging as a potential contender likely to garner an unprecedented share of the vote. The advent of the far-right Sweden Democrats risks shifting the dynamics of Swedish politics by forestalling the possibility of either the traditional left or right being likely to form a majority. In the ensuing coalition-building, the potential for the far-right Sweden Democrats to be political “kingmakers” looms.
The Sweden Democrats have proposed a number of controversial policies, including a referendum to leave the EU. Sweden exiting the EU would risk serious economic disruption including job losses, the threat of GDP decline, and an encumbered trading environment. Liberal Party leader Jan Björklund has speculated that “the consequences for Sweden would most likely be greater than those in Britain, which is a larger and more influential country”.
The threat of poorer access to medicines alongside a more difficult to navigate market access environment demands close attention from the pharmaceutical industry, which continues to grapple with the potential consequences of Brexit. Although Sweden might not be as influential a market as the UK, it nevertheless provides pharmaceutical firms particular market access advantages. These include the flexibility to negotiate regionally appropriate access arrangements as a result of its decentralized system. Various promising international and regional collaborations in the pharmaceutical regulatory environment that began to gain steam in 2018—such as increased Nordic collaboration in pharmaceutical assessments—might not see the light of day in the case of a “Swexit”. Of course, mitigating these concerns is the fact that very few Swedes are in favor of leaving the EU.
The uncertainty around what will follow the elections has left industry with growing concerns. The need for coalition building looks inevitable in the current environment. However, the Sweden Democrats will struggle to form a working coalition with either political bloc, as none of the traditional parties are favor leaving the EU and have expressed disinterest in formally aligning with the more controversial emerging party. Nevertheless, should the Sweden Democrats manage to pull the predicted percentage of the vote, their input will be near impossible to ignore if the new government is to gain the support needed to pass legislation in a divided parliament.
The potential for political gridlock following the upcoming elections could stymie the business climate in Sweden. Depending on how long it takes to form a stable governing bloc, this could lead to unsettling ambiguity for investors and industry alike. There is also a real fear that pronounced ideological divisions could lead to government paralysis, which would further undermine the foundations of recent Swedish economic success. Industry will want to watch the result—and the potential for a drawn out aftermath—very closely.
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