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Brexit: the eye of the storm

Life sciences companies need to act now

The UK life sciences sector will undoubtedly be affected by Brexit after the decision that Article 50 will be triggered by the end of March 2017; and it needs to start preparing now for the uncertainties ahead.

Some of the specific challenges include possible reductions in research funding as well as more complicated processes for clinical trials. The potential for increased administrative and regulatory requirements as companies have to secure product licences both in the EU and in the UK will increase cost and delay launches. There will also be effects on the supply chain if clinical depots have to be moved from the UK to within the new EU boundary.

The most fundamental risk though is to the UK’s position as the life sciences gateway to the EU. Global companies which currently have their headquarters in the UK may well look to move to countries remaining in the EU. However, this could be offset if the UK stimulates the business environment through the tax regime or revives initiatives such as the Biomedical Catalyst Fund.

While it will take some time for the precise impact of Brexit to become clear, it is essential that companies use effective scenario planning to manage uncertainty. 

Brexit eye of the storm

Life sciences companies should act now to prepare for Brexit

PA’s experience of supporting pharmaceutical companies to prepare for changing regulation and compliance, highlights the need for scenario planning.


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A new set of scenarios

We see four possible outcomes that pharma companies should plan for. 

Life Sciences Brexit diagram

In the ‘Preservation’ scenario, the UK leaves the EU but remains formally aligned to it. There will be minimal impact in the long run but companies still need to carry out an audit of current EU compliance issues along with ongoing market analysis.

The ‘Realignment’ scenario envisages a situation where the EU has further fragmented to fewer than 27 member states. This scenario will require an expanded audit and contingency plan to prepare for changes to pan-European clinical trials, supply chain and commercial trade arrangements.

The ‘Displacement’ scenario sees the UK outside both the EU and EEA with a significant impact across the life sciences sector. In this scenario companies need to plan for additional UK related processes for clinical development, medicines approvals, trade arrangements, supply chain and financial changes.

The ‘Revolution’ scenario describes a completely new type of Europe where free movement of goods and people, and uniformity of regulations, only applies to a smaller number of EU member states. Companies will need to continually update risk assessments and contingency planning to ensure that clinical development, commercial operations and supply are unaffected.

All these scenarios underline that as the UK moves towards Brexit and the uncertainties are resolved, life sciences companies need to be ready to respond.

Find out how PA’s ‘Future Worlds’, an advanced and innovative approach to scenario planning, helps organisations manage in uncertain times.

Read also our insight on the risks of Brexit for the UK’s clinical development services.

Find out more about our work in life sciences.

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