It has led to companies having to plan for all eventualities, according to BioIndustry Association (BIA)’s Brexit Lead, Laura Collister: “BIA member companies need certainty to plan for the future. The lack of certainty means that companies are having to prepare for every scenario and ensure that they have the right plans in place so that patients across Europe and in the UK continue to access the medicines they need. Without certainty, companies are having to invest considerable resource in duplicating red tape.”
The European Medicines Agency (EMA) has offered its own guidance on the future outlook for the negotiation process. In a EudraVigilance Operational Plan, the EMA indicated that it is working under the ‘assumption’ that the UK will become a ‘third country’ after the March 2019 deadline – indicating a likely hard exit for the UK.
What would be the direct impact of such an outcome for business? Collister outlines that trade tariffs would come into play, potentially raising costs for the industry: “Our current situation in the EU is that there is 0% tariff within the union and also no customs controls – if we leave with no agreement then we revert to World Trade Organisation (WTO) rules. Under WTO rules, tariffs are set on a most favoured nation basis – unless you have a free trade agreement (FTA).
“The UK currently trades with non-EU states via around 35 FTAs that will cease to apply to the UK once it leaves the EU. If the UK leaves the EU without an agreement on trade and no adequate transitional arrangements, the trade regulated by these FTAs will revert to WTO rules.”
Collister confirmed that even negotiating new WTO agreements would be fraught with issues: “The UK could sign and implement WTO agreements providing duty-free trade on particular products, namely the WTO Pharmaceutical Tariff Elimination Agreement. This provides a 0% tariff on many medicines but it has not been updated since 2010, meaning that any new products will have tariffs imposed. Updating the list would be complex and the US could be a barrier, particularly with current attitudes to global trade.”
The potential for the trade of products to be severely delayed due to the faltering negotiations was highlighted as a potential issue by Collister: “Biological drugs must be transported and stored in careful conditions so delays at borders could halt supply chains between the UK and Europe in both directions.”
Beyond trade tariffs
One issue that has also arisen beyond trade is the issue of recruitment and collaborative working between the UK and the EU after Brexit. The scientific community is a collaborative one, particularly in regards to regulatory issues, and tougher post-Brexit immigration policies could impact this.
Collister stressed four ways the UK government post-Brexit immigration policy should operate, stating it should:
- Facilitate the advancement of science by enabling UK scientists to benefit from working with world leading scientists and innovators; and securing the ability of UK researchers and scientists to benefit from working abroad, both EU and globally
- Enable a simplified overall system which ensures no new red tape or cost is put on businesses, particularly small and medium-sized enterprises (SMEs), hiring the talent they need to succeed - in our submission to the Migration Advisory Committee, we suggested this should form a recommendation from the Committee to Government
- Recognise the importance of entrepreneurs to the biotech sector and facilitate a system to encourage them to come to the UK to build businesses
- Consider how the immigration system could be used to deliver other objectives, such as increasing investment in the UK’s innovative science and technology businesses via an investor visa
Today, BIA attended a conference, alongside the Medicines and Healthcare products Regulatory Agency, where a BIA spokesperson told us such concerns had been raised to the UK’s regulator.
Earlier this week, the ABPI and BIA released a joint statement outlining their frustrations with the course of discussions at the level of the EU Council.