In just a few weeks, Britain’s uneasy relationship with the Continent will face its trickiest test in decades – one whose outcome will have a profound effect on the world’s fifth-largest pharmaceutical market. On June 23, British voters will flock to the polls to make a momentous decision on the future of the United Kingdom’s role in Europe and decide whether to remain in the European Union or not – colloquially known as the “Brexit” (British exit) vote. If the referendum results in a mandate for the government to pull out of the European Union, the consequences for the pharmaceutical industry will be far-reaching – and not likely to be positive.

The pharmaceutical industry in the UK generates 10% of the country’s GDP and employs over 70,000 people. The impact of a British exit would be felt in everything from life sciences research to market authorization. For example, the United Kingdom receives the most grants from the European Research Council and Brexit would make it ineligible for these. In addition, UK scientists could lose priority access to other European research facilities, while a wide range of EU public/partnerships would find themselves in danger. In total, £8.5 billion ($12.3 billion) of funding and investment in the next four years alone would be in jeopardy. Overall, investment in research would likely suffer considerably as the result of a “Brexit.”

Brexit would also have a significant impact on launching drugs in the UK – affecting manufacturers trying to launch and patients trying to access drugs alike. If the UK chooses to leave the European regulatory framework as part of the Brexit, it would have to resume with independent market authorization and inspections, and the European Medicines Agency (EMA) – Europe’s main regulatory body – would have to move its headquarters out of London. This will lead to duplication and delays for manufacturers, and would put a number of authorizations that are already underway in jeopardy. The UK could also see access issues, as companies may choose to prioritize European launches over the UK, delaying access to drugs. NICE would also lose access to EUnetHTA’s network of information on innovative pricing models and HTA in the EU.

It is difficult to accurately assess the consequences until it becomes clear what a post-Brexit relationship with the EU would look like, and whether the UK would negotiate to remain in the EEA (European Economic Association) or would join the European Free Trade Agreement (EFTA). Proponents of leaving the EU cite Switzerland as an example of a thriving pharmaceutical industry – outside of the EU, but still within the confines of many EU norms – but it is unclear whether the UK would favor to opt for such a relationship, or even if it would be granted the chance to do so. Regardless, data shows that this argument is flawed – for example, the Swiss receive half of the R&D funding that the UK does, despite better incentives for industry and a very intellectual property-friendly environment. Furthermore, it could take up to a decade to negotiate what a post-EU relationship with the EU would look like, which would mean ten rocky and unstable years for pharma.

Unsurprisingly, the pharmaceutical industry has resoundingly been in favor of remaining in the EU, citing a number of negative impacts. EFPIA released a statement in February 2016, stating that the organization is firmly against Britain leaving the EU, and that the European pharmaceutical market would be in great jeopardy if Brexit did come to pass. More specifically, the organization argued that should Britain leave the EU, UK companies would lose access to pan-European collaborations in research and development, the EU marketplace, EU advocacy on global trade issues and a harmonized regulatory environment.

Pharmaceutical companies – such as AstraZeneca, GlaxoSmithKline, Merck, and Eli Lilly – have also joined the anti-Brexit chorus. Over 200 leaders of industry, including a number of pharmaceutical companies, signed a letter to the Financial Times in February 2016, throwing their weight behind the campaign to keep Britain in the European Union. In May 2016, 90 British pharmaceutical executives and leaders signed a letter supporting the “remain” camp. The increased regulatory burden has been identified as one of the key problems by industry, as Brexit would require the potential move of headquarters, administrative and manufacturing sites; weaker links to EU academia and EU clinical trial data; leaving EU trade deals; reduced research funding; and higher labor costs and import duties.

Those who support the “leave” camp – few and far between as they may be in the pharma industry – cite increased flexibility, autonomy and independence over scientific funding, spending and the regulatory system as the key advantages of leaving, arguing that it’ll allow for more flexible use of NICE recommendations and decisions. However, it is clear to many that the loss of access to EU resources, schemes and norms would have a devastating impact on the pharmaceutical industry. More than anything, it would result in tremendous amounts of uncertainty.

Latest polling has shown a slight skew towards the “remain” camp, but the lead is not overwhelming, and no one can say for certain what will happen when the results are announced. As Britons rush to the polls in two weeks’ time, the pharmaceutical industry is unlikely to be at the top of their minds when they decide whether to vote in or out. In reality, their lives will be impacted by pharma’s troubles more than they realize, as drugs may face delays and patients could face issues accessing treatments. This is unlikely to swing the average voter, so in the meantime, the pharmaceutical industry will apprehensively have to wait to find out what kind of UK the world will be waking up to on June 24.

 

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