A week is a long time in politics – particularly true of the last seven days. But what does Brexit mean for life sciences? What’s next for the UK’s pharma, medtech and digital health sectors, asks Lu Rahman?
A quick Google search on what Brexit means for the UK life science sector – medtech, pharmaceuticals, digital health and healthtech – and it’s hard not to want to run for the hills.
Uncertainty, challenges, in flux – just some of the terms being used to describe the effect Brexit is having on this thriving UK sector. With latest government figures valuing the industry at £60 billion, employing 220,000 people, any threat to its success is understandably worrying.
Earlier this year, Sir Andrew Witty, CEO of GSK and 29 other life science figureheads voiced their concern on the UK leaving the EU in a letter published The Observer.
The group commented: “We see significant advantages for the life sciences sector in the UK remaining part of the EU. This would enable the sector to continue to operate within an established and harmonised regulatory approval system, ensuring that UK patients benefit from medicines more quickly, and that medicines researched and manufactured in the UK are available across the EU sooner.
“The sciences sector also benefits from EU advocacy on international trade issues to ensure fair trade for UK companies. The UK’s life sciences sector is second to none.”
The message to stay was clear but one week on, how is the sector faring? According to an article by Julia Bradshaw, in The Telegraph, things haven’t hit as hard as they might have done.
She writes: “Pharmaceutical companies have survived largely unscathed from the turmoil that has gripped virtually every other sector in the stock market. Big hitters such as AstraZeneca, GlaxoSmithKline, Shire and BTG actually enjoyed a slight uptick in their share prices on the very day that the EU referendum result pummelled many of their FTSE blue-chip peers.”
Of course the need for drugs and medicine isn’t likely to diminish. Investment in the pharma is traditionally secure plus many of the sector’s key players have global businesses able to withstand fluctuating markets.
Peter Simpson is director of The N8 Research Partnership, a collaboration of eight research intenseuUniversities in the North of England: Durham, Lancaster, Leeds, Liverpool, Manchester, Newcastle, Sheffield and York.
Simpson believes the Brexit vote has created a huge financial challenge for UK academic research as the EU is a major funder, paying for as much as 30% of all the research that takes place in our universities through programmes such as Horizon 20:20 https://ec.europa.eu/programmes/horizon2020
“It’s not yet clear whether our ability to access this funding will disappear completely – academic research is inherently collaborative, and some countries outside of the EU do receive funding support. But it’s inevitable that research funding will fall.
“Pan-European research collaboration is one of the foundation stones of academic research in this country. There’s a worry we will now see a haemorrhaging of talent, with non-UK researchers steadily moving away.
“As a whole, the population of the North of England voted to leave – which might be said to have been cutting off its nose to spite its face in terms of making life harder for the universities in the North. But there was a sharp divide in age – young people in education and graduates supporting remain. Within higher education it’s believed that 80% of academics voted remain.”
Simpson says that universities’ VCs will be obliged to say ‘business as usual’ but they will be concerned about a decline of applications from international students, who will no longer regard the UK as a welcoming destination within the EU.”
Earlier this week GlobalData said the UK’s vote to leave could have significant effects on the life science sector.
It outlined areas at risk – regulatory impacts, R&D, access to talent, intellectual property rights and market access – and highlighted drug and device regulation as potentially being hit the hardest following the Brexit vote.
Timescales for Brexit may also play a significant part. While two year long negotiations may seem drawn out, this is nothing in the life science industry where long lead times for drug and device development are the norm – in theory this could affect investment potential as of now. Other points to consider include the headquarters of the European Medicines Agency leaving its UK home for an EU-based spot, as well as there being changes to the way existing medicines are regulated.
However, despite these concerns, GlobalData is positive about the sector’s overall ability to flourish.
What about the medtech sector?
With a weak pound potentially affecting exports, this could impact significantly on the way UK healthtech companies trade with the rest of the world. There have also been press reports adding that as a result of Brexit, the UK might lose some appeal in terms of investment and that innovation may suffer with EU funding for R&D disappearing.
Following last week’s result, Peter Brady, CEO Ascensys Medical, told MPN: “The Medical Devices Regulation (MDR) project is unlikely to be affected by Brexit and will likely come into force within the EU as planned and might even be introduced in the UK, certainly within the two years leading up to the deadline for exit.
“As they come in to effect in the EU’s other member states, UK medical device manufacturers wishing to sell in this market will still need to comply with this regulation.
“The UK is likely to aim for mutual recognition in negotiations with the EU and this will mean that European medical device regulation will apply to the UK. This still needs to be determined by the next government, however.”
Brady is also undecided about the impact Brexit will have on notified bodies.
“It’s most likely that the UK will retain one or more notified bodies but that will depend on whether we negotiate mutual recognition,” he says.
Despite the uncertainty the mood within the life science sector regarding Brexit is positive, whichever way organisations may have chosen to vote. Brian O’Connor is chair of the European Connected Health Alliance (ECHAlliance). He commented:
“Innovation knows no boundaries and the need for it in healthcare and social care is as great regardless of Brexit.
The ECHAlliance has an increasing number of Ecosystems and members outside the EU and this can now include our UK members and Ecosystems. Perhaps for our UK members and Ecosystems our role and work will be even more important to maintain and grow international links.
“So in confused and uncertain times, our message is that we and you have achieved much, with much still to do and together we will find ways to keep doing what we must for the benefit of all.”
The message to continue to push forward with innovation is strong.
Writing in Digital Health London, Maxine Mackintosh, managing director of Healthtech Women and Axel Heitmueller, managing director of Imperial College Health Partners, highlighted the need to offer continued support to stakeholders in a bid to ensure business thrives even there is uncertainty.
According to Mackintosh and Heitmueller: “Just as before the referendum, uncertainty plagued the decisions – this has not changed. No one knows what the divorce from Brussels really means. Will more sovereignty create opportunities for local and more tailored legislation? Will we see a drain of intellectual capital? Or will the digital market continue to transcend borders and laws? But beneath the ever-more apocalyptic headlines, business continues as usual.
“Reducing uncertainty is the real issue for SMEs in digital health and across the wider tech community. Signalling that London remains open for business is therefore more important than ever. DH.L and HealthTech Women UK are doing our bit, by supporting companies, entrepreneurs and a thriving digital health community.”
Focussed on London-based digital health initiatives, this message can be applied throughout the UK in coming months and years as we wait to see what Brexit really mean for the UK life science sector.