Due to the ramifications of Brexit, the UK is facing uncertainty regarding business operations in every industry, including pharmaceuticals. Traditionally, the UK has been one of the leading recipients of research funds from the EU for drug discovery, receiving nearly €8.9 billion ($10.7 billion) from Horizon 2020 between 2007 and 2013. But with the future of the UK up in the air after Brexit, scientific innovation has slowed down, with many potential international collaborators hesitating to enter deals with the country.

According to the Association of Clinical Research Organizations, the UK clinical testing industry is valued at around £2.5 billion ($3.4 billion) annually, with approximately 40% of experimental drugs used in EU-based clinical trials manufactured in the UK. However, EU regulations state that experimental drugs for clinical trials in member countries must be made and approved by Union officials, and with the UK soon to be out of the EU, this has increased the challenges for the UK to collaborate with EU member countries.

Exacerbating this are the relocation plans of the European Medicines Agency (EMA) from the UK to Amsterdam, which will transfer its 900 job positions, $322 million budget and business with the 40,000 people who work with the Agency annually. The EMA expects that up to 30% of its staff may quit, which will delay drug approvals, decrease income from fees charged for product reviews and even, in the worst case scenario, leave the Agency inoperable.

The UK also must work on a deal with the EU to obtain EU approval for its drugs. After the UK drug is approved, it will then need to be registered in a member country in order for it to be sold across Europe. Approximately 2,400 medical products will need new marketing approvals through an EU country, and there may be a large influx of applications received by the EMA at the same time, which may also delay approvals even further. In the meantime, to keep operations running as smoothly as possible, many pharmaceutical companies, such as GlaxsoSmithKline, have been creating new infrastructures for manufacturing and testing in EU member countries.

Source: Bloomberg