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Brexit Revisited

Updated: May 26, 2021

Words by Isabel O’Brien

After years of tough negotiations, the ongoing Brexit saga has all but concluded, and the UK has left the European Union. We explore how pharmaceutical innovation has fared, as the UK works to replace EU resources and make use of their newfound regulatory freedom.

Brexit once dominated news headlines and conference agendas across Europe, yet over the past 12 months, the subject has been understandably usurped by the pandemic. But what has been the fall-out of the UK’s exit from the European Union? Since January 2021, UK innovation hubs and pharmaceutical companies have been adjusting to new structures, pathways, and protocols, but how are they working in conjunction with the British government and the EU to prevent shortfalls and reduced productivity?

The UK pharma sector employs over a quarter of a million people and delivers an annual turnover of >£80 billion. A spokesperson for the Department for Business, Energy & Industrial Strategy (BEIS) describes it as: “One of the world’s best research and science bases with globally renowned clinical research and an unparalleled cradle-to-grave healthcare system in the NHS.” Consequently, the nation has been eager to plug holes and seal gaps to avoid any undue deficits emerging during this monumental transition.

The EU and UK recognised that there would be disruption to medicinal products

Supply chain contingency has been a source of anxiety for the public, concerns that were only exacerbated by the onset of COVID-19. While fears are legitimate, “The EU and UK recognised that there would be disruption to medicinal products,” says Deborah Cooper, Director, PwC. She goes on to assure that the exit deal included a caveat to mitigate disturbances: “The trade agreement had one notable exception, an annex to the deal established mutual recognition of inspections and good manufacturing practice, removing much of the duplicate regulation.” In the short term, there has been a 500% increase in the number of drugs that have been temporarily unavailable. However, when it comes to the bigger picture, these shortages will be, overall, temporary, with mutual recognition agreements facilitating efficient trading of pharmaceuticals by cutting costs for manufacturers, allowing for less facility inspections, and waiving the re-testing of products upon importation.

Clinical trial recruitment in the UK has also undergone a structural transformation. While UK innovation hubs once utilised the databases of potential trial participants from across the EU, “Numerous research registries are no longer available,” explains Cooper. However, she does assert that this is far from a fatal blow to clinical research: “Research and clinical trials have continued due to the ease of access to the NHS data sets and patient cohorts, and the collaborative approach of the MHRA and NICE in driving better clinical outcomes.” The two parties have worked in synergy to harness health data and support the continuation and success of clinical trials in the UK.

Another potential shortfall is funding into R&D. The former union shared resources throughout their partnership; the UK was granted access to EU initiatives such as Horizon 2020 and the European Investment Fund, at one time, benefitting from 16% of the funding from one such initiative. Losing access to these resources is an undeniable hit, but the UK government has pledged to make up the difference in a bid to reduce the financial headache for developers. As the BEIS spokesperson comments: “We will use the regulatory freedoms gained by leaving the EU to grow the sector even further,” citing a £200 million fund to boost innovation which will be part of the total £14.6 billion investment pledge that will be made between 2021–2022 by the UK government.

Clinical trials have continued due to the ease of access to the NHS data sets and patient cohorts

While the UK is currently sitting in the top 3 life sciences hubs globally, the nation is hoping to attract new investment following its EU departure. “Brexit may result in the UK being able to make its R&D tax relief and tax credit schemes more generous without the caps dictated under EU law, ensuring that the UK businesses remain competitive in new markets, attract investment, and is comparable to other schemes such as Canada’s,” says Cooper. These tax reliefs coupled with the funding boost could position the UK as an attractive location for multinationals to come and develop their drugs.

While Brexit may have been downgraded in public consciousness, behind the scenes the UK and the EU have been working hard to ensure that drug supply, clinical trials, and funding are not disrupted by the historic exit. As with any period of upheaval, challenges may lie ahead. At present, priorities are positioned in a cohesive and positive direction, ensuring the continuation of innovation for the benefit of patients on both sides of the split.

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