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By guest blogger Preeti Parikh - Head of Business Development at RAS LifeScience Solutions, a boutique pharma/life sciences consulting firm.

It’s been almost 3 years since the British public voted 52-48% to leave the EU on 23rd June 2016.12  Given the lack of clarity and ensuing uncertainty pharmaceutical companies, both in the UK and across Europe, have been planning for a worst-case scenario – leaving the EU with no-deal. In this blog, we’ll take a look at the most important (subjectively assessed) implications of a no-deal Brexit scenario for pharmaceutical industry.  

Before I discuss the potential consequences of a no-deal Brexit, here are some metrics that reflect the importance of the bond between the EU and the UK´s pharmaceutical economy8

  • The pharma sector has an annual revenue of £41.8B and employs more than 113,000 people. 

  • The mix of large pharma, SMEs, Manufacturing and R&D units for EU (and global) companies are fully reliant on the friction-free transfer of medical/chemical/biological goods within the EU. 
  • The sector provides 8.2% of UK goods exports and 5.3% of imports to the UK. 
  • The wider life sciences sector cumulatively accounts for 233,400 jobs across 5,142 companies with an annual turnover of £63.5B. 

According to ABPI, every month 45 million packets of medicines move from the UK to Europe, and 37 million packs go in the opposite direction. Clearly, exiting the EU will have a significant impact on both markets. While multiple Brexit scenarios have been predicted, I will highlight the impact of a “no-Brexit” scenario on the pharmaceutical industry.  

First, a quick recap 

On March 29, 2017, the UK notified the European Council that it will withdraw from the EU by March 29th, 2019. However, unable to do so for several reasons, the UK requested and received an extension from the Council (in April 2019) for a new withdrawal date of October 31st, 2019.1,2 

A “no-deal” Brexit scenario essentially means the UK would leave the EU without specific agreements in place about what UK-EU industrial/business relationships would look like going forward. Below are the key implications (as I see it) of a no-deal Brexit. 

Stockpiling on a rolling basis 

In August 2018, pharmaceutical companies were asked to develop six-week stockpiles for some drugs (~7000 essential medicines) to ensure a continuous supply in the event of a no-deal Brexit. However, on April 26th 2019, the Department of Health and Social Care asked these companies to keep their six-week stockpiles of medicines “in place but on hold” until further notice.3 

Stockpiling on a rolling basis increases the financial burden on the manufacturers and creates costly inefficiencies, especially for medicines with short shelf-lives. Warehousing medical stock also creates an additional cost burden, with the uncertainty of the situation hindering the companies´ ability to plan ahead.  

In the short term, many UK companies are beginning to move their facilities outside the country. GSK, for example, are building new laboraties in Europe so they can also test their products outside of the UK to ensure they can still be sold in the EU. Similarly, AstraZeneca have taken the position of halting all spends on stockpiling and risk the wrath of regulators in case of shortage due to a no-deal Brexit.6,7,13 

Access to Public and Private Capital 

A no-deal Brexit would reduce the UK’s funding from the EU’s Horizon 2020 programme (a £70B pot aimed at cutting-edge science) by ~50%. The UK´s access to EU funding beyond Horizon 2020 is still uncertain, meaning the UK could lose vital access to EU public funds.4,5,10 

Access to private capital will also be adversely affected in the case of a no-deal Brexit: non-UK based venture capital and private equity funds will tighten their criteria of funding UK based biopharmaceutical companies, since the entry barriers to EU markets will increase.4  

Costly marketing approvals 

In case of a no-deal Brexit, the UK’s MHRA will take over the regulatory functions currently performed by the EMA, including managing regulatory applications for medicines.9  

This implies that UK companies will have to partner with and/or set up legal base(s) within EU countries to develop and commercialize their products for the EU market.11 The same holds true for EU companies as they try to access the UK market. These stipulations have the potential to hurt the bottom line of pharma companies with cross border ambitions.  

To conclude 

The pharmaceutical industry (like all others) is currently in a ‘wait-and-watch’ mode as the UK tries to make an exit plan from the EU. The prospect of clarity seems distant, as trade negotiations are expected to go on for several years – impying decisions won’t be made before the EU withdrawal deadline and therefore leaving the UK with a no-deal Brexit.  

In the meantime, the increased cost of business and restricted access to capital is likely to adversely impact the UK´s pharma industry. 

So, what does the future hold for Britain’s pharmaceutical industry? We will have to wait and see… and prepare for Brexit….deal or no-deal! 


EU: European Union 

EC: European Commission 

MHRA: Medicines and Healthcare products Regulatory Agency 

EMA: European Medicines Agency 

ABPI: Association of the British Pharmaceutical Industry 

MAH: Marketing Authorization Holders 

EEA: European Economic Area 

API: Active Pharmaceutical Ingredient 


  1. https://www.dcatvci.org/5960-pharma-and-brexit-what-happens-next 

  1. http://www.pharmtech.com/doing-brexit-hokey-cokey 

  1. https://www.pharmaceutical-journal.com/news-and-analysis/news-in-brief/drugs-companies-asked-to-put-no-deal-brexit-stockpiles-on-hold-until-further-notice/20206563.article?firstPass=false 

  1. https://www.pwc.co.uk/pharmaceuticals-life-sciences/assets/brexit-for-pharma-and-is-global-flyer.pdf 

  1. https://labiotech.eu/features/brexit-european-biotechnology/ 

  1. https://www.eeco2.com/brexit-effect-on-uk-pharmaceutical-industry/ 

  1. https://www.theguardian.com/politics/2019/feb/19/what-are-brexit-contingency-plans-for-pharmaceutical-industry 

  1. https://publications.parliament.uk/pa/cm201719/cmselect/cmbeis/382/382.pdf 

  1. https://www.dcatvci.org/5671-deal-or-no-deal-brexit-and-pharma 

  1. https://pharmaphorum.com/views-and-analysis/what-will-a-no-deal-brexit-mean-for-pharma-and-healthcare/ 

  1. https://www.lexology.com/library/detail.aspx?g=b0c37044-6b46-41aa-963d-a3156b4c6b9d 

  1. https://www.bloomberg.com/quicktake/will-uk-leave-eu 

  1. https://www.reuters.com/article/britain-eu-astrazeneca/astrazeneca-halts-uk-investments-due-to-brexit-uncertainties-le-monde-idUSL8N1WV4GD  

This article was first published on the RAS website on 12th July 2019.

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