Implications of Brexit on the UK (EU) Healthcare Industry

Implications of Brexit on the UK (EU) Healthcare Industry

The United Kingdom referendum outcome to leave the European Union (Brexit) has generated much uncertainty for both the UK and the other member states of the EU. Amidst all this turmoil, it is clear that there will be significant implications for the life sciences sector and the companies that operate within it.

Access to new drugs/medical devices: The EU makes up 27% of the world healthcare market, while the UK makes up just 3% of the global market for the biomedical industry, risking fast access to new medicines. UK may lose access to the single marketing authorization from the European Medicines Agency (EMA), and the drug companies have to face additional regulatory hurdle before launching their drugs throughout Europe, and in the UK separately. New drugs would take longer to reach the British market.

Investment and research funding: The UK attracts investment for the R&D activities to discover and develop the next generation of treatments for cancer, respiratory disease, and Alzheimer’s, and the pioneering work in new vaccines and antibiotics. Therefore, the UK would risk incentives from global pharmaceutical companies to invest in the UK to access the EU market, and research funding from European organizations, such as EMA, European Research Council, etc.

Regulations and clinical trials: EMA would have to relocate its UK headquarters to another country within the EU and risk delaying approvals for the current drugs and medical devices in pipeline or development.  The pharma industry would also face uncertainty over regulation, since most of the regulations on intellectual property rights, quality standards, clinical trial rules, and criteria for product approval are harmonized across the 28 EU countries. The UK medical device manufacturers would no longer be permitted to claim automatic entitlement to market medical devices throughout the EU on the grounds that they have conducted a conformity assessment on the basis of EU device rules and affixed the CE mark to their devices. The MHRA conducts 30-40% of approvals for the EMA, making the UK an attractive place for global players to conduct a clinical trial. The MHRA assesses 40 per cent of applications made to the EMA and the loss of this work would force the government to contribute much more to its running costs. The UK sponsors of clinical trials for both medicinal products and medical devices would be required to appoint Data Protection Representatives in each EU Member State in which a trial site was established.

Drugs/medical devices pricing: The pharmaceutical price regulation scheme, a voluntary agreement between the industry and government, sets the price of drugs generally about five years ahead. The most common pricing policy in Europe is external reference pricing, whereby countries benchmark each other’s prices. Therefore, the drugs and medical devices in the UK could cost more.

The UK’s two big drug companies, GlaxoSmithKline and AstraZeneca, have both strongly stated their support for remaining in the EU. Top bosses at firms such as GlaxoSmithKline, AstraZeneca and Pfizer warned of the implications of Britain leaving Europe on the healthcare sector which employs more than 222,000 people, spends £4bn on research and development. Similarly, academics, researchers and entrepreneurs added their voices to the No campaign. “Leaving the EU would bring added complexity and uncertainty, which is bad for business and research. Remaining in a reformed and more competitive EU would offer stability and predictability as a platform for even greater success. Staying in would be better for the health and wealth of the UK”.

2016-10-18T07:09:44+00:00 Categories: Analyst Insights|