Since the UK’s 2016 vote to leave the EU, pharmaceutical companies have been planning for a worst-case scenario. It seems that the pharma and life science industries are worried by the lack of clarity and security surrounding Brexit.
A recent article in The Guardian suggests that Brexit poses ‘a big threat to pharmaceutical research and manufacturing in the UK… potentially driving up manufacturing costs and deterring future investment’.
Due to Brexit uncertainty, many pharmaceutical manufactures with bases in the UK have suspended investments in Britain. Other major pharmaceutical manufactures, such as Novartis and Pfizer, have announced plans to close UK manufacturing or packaging sites by 2020. Although the decisions were made after the June 2016 referendum, the companies have stated they were not linked to Brexit.
‘The threat of a no-deal Brexit is forcing a number of companies including GSK, the UK’s biggest drug maker, to build new laboratories for parallel product testing and shift licences to ensure their products can still be sold in the EU’1
There are reports of numerous Non-Disclosure Agreements (NDAs) being used between the government and pharmaceutical organisations, preventing information being leaked to the public regarding the plans being put in place. Further down the supply chain, the Department for Transport also has NDAs in place, forbidding transport and haulage organisations from discussing plans on managing haulage after Brexit.
Although some maintain that the NDAs are normal practice, there are those who deem this practice as unacceptable, as they are ‘undermining transparency’ regarding essential information being held from the public.
It appears that the majority of pharmaceutical and biopharma companies in the UK are planning ahead, and taking steps to assure continued supply of products to customers post-Brexit.
It has been reported that AstraZeneca is spending up to £50m modifying transport routes and increasing stockpiles of medicines. The company is increasing stocks from 3 months’ supply to 4 in warehouses in the EU, and up to 4.5 months in the UK.
Pfizer has declared that it will keep its Sandwich site open, but it is stockpiling drugs as a contingency strategy. The company estimates it will incur one-off Brexit costs of $100m (£78m)1.
Another company engaging in stockpiling is Roche. Normally, it stocks at least 4 weeks and up to 6 months’ supply (depending on product shelf-life) but plans to increase by an additional 6 weeks stock for all products.
In January this year, the UK lost the head office of the European Medicines Agency (EMA), which finalised its move from London to Amsterdam. This resulted in the loss of 900 jobs in the UK. The move gained even more attention recently, as the EMA lost a high court battle to cancel its £500m long-term office lease in London’s Canary Wharf. The EMA blamed the need to move office locations and cancel its lease on Brexit. But the judge ruled against this justification in the hope that it would prevent a trend of ‘copycat lease cancellations’ from other affected companies attempting to move out of Britain because of Brexit.
EMA and the European Commission have published guidance to help pharmaceutical companies prepare for Brexit. The guide aims to ensure that companies are ready to take the necessary steps to enable continuous supply of their medicines in the EU, based on the assumption that the UK will become a third country as of 30 March 2019.
So, what does the future hold for Britain’s pharmaceutical and biopharma manufacturing sites? We will have to wait and see… and prepare for Brexit.
As a global company, we work all over the world, including the EU – which is very important to us. Having businesses in USA, Ireland, Australia and a UK Head Quarters, maintains our global presence and helps us to continue to work seamlessly when conditions such as Brexit occur.