Damage control: How will pharma manage the health economic impacts of Brexit?

pharmafile | October 23, 2019 | Feature | Business Services, Manufacturing and Production, Medical Communications, Research and Development, Sales and Marketing HEOR, brexit, health economics and outcomes research, pharma 

When it comes to life sciences and patient outcomes, the UK’s destiny is inextricably tied to its relationship with the EU. With services already stretched to breaking point and key patients already unable to access the crucial medicines they need, how will the UK’s health economics be hit by an incoming Brexit?

Regardless of the ultimate outcome, every industry in the UK risks being caught in the gravitational sinkhole of Brexit. The nation’s life science industry is no exception, and concerns have been raised, and not just recently, on how its many facets and systems will continue to operate without compromise once the UK’s divorce from the EU is complete, particularly when it comes to patient safety and treatment outcomes and especially in a ‘no-deal’ scenario.

These include wide-reaching concerns that could impact key areas such as talent retention as the UK’s immigration system is overhauled and freedom of movement to and from the EU comes to an end; medicine shortages as the fluidity of cross-border trade of goods – especially those that are time-sensitive or are predominantly imported from the EU – is threatened with transport vehicles languishing at customs checks; while international research collaboration and clinical trial execution is compromised, with the UK locked out of these shared privileges as it sees, upon its exit, its status downgraded from member state to ‘third country’.

These are all concerns that were spotted well before they emerged over the horizon, highlighted by industry figures as far back as the referendum itself; many of these fears were recently confirmed in the content of the internal intelligence report ‘Operation Yellowhammer’, which UK Parliament voted to force Boris Johnson’s government to make public, suggesting the sitting administration has been happy to push for a hard or no-deal Brexit despite being fully aware of the potentially devastating consequences of such a move.

These problems arising from Brexit, or at least the mechanisms introduced to help mitigate them, will surely compound the issues already faced by UK organisations which must consider and integrate HEOR-based evidence into their decision-making. One needn’t look far to see that the UK and its NHS already has its hands tied when it comes to the valuation of medicines and devoting resources to make them accessible, and it’s ultimately the patients that suffer; just look at the ongoing stand-off between NICE, the NHS and Vertex over access to the latter’s crucial cystic fibrosis medication Orkambi.

Reason to worry?

The stakes are high, especially for vulnerable patients or those for whom there are limited or no alternative treatment options or who rely on the smooth import of medicines or ingredients from the EU. All evidence points to the government’s awareness of this, and it has fought its corner against these vocal concerns emanating from the industry. Pharmafocus reached out to the Department of Health and Social Care (DHSC) to get its side of the argument on these issues:

The UK is a world leader in life sciences and the Government is committed to ensuring the sector continues to thrive once we leave the EU on 31 October, whatever the circumstances,” a government spokesperson commented. “It is vital UK patients continue to benefit from the best treatments and technologies quickly and the Accelerated Access Collaborative is bringing together industry, the NHS and government, to help the NHS adopt new innovations faster than ever before.”

Of course, while this certainly sounds promising, it doesn’t make the task of preparation any less trying for the companies who will have to strategise in advance to brace for the coming impact while hopefully retaining scientific integrity and protecting patients.

To hear the case from the pharma side of the argument, Pharmafocus spoke to Eli Lilly to learn how these companies are interacting with the government and acting on its direction in the run up to a potential exit date to maintain financially feasible operations and minimise economic impact. A spokesperson explained:

“Lilly’s top priority is to ensure patients in the UK and in the EU can continue to access the medicines they rely on, whatever the Brexit scenario. This required us to plan for a worst-case “hard Brexit” and we have undertaken comprehensive analysis of the risks this scenario poses across our business, and critically, to our ability to supply medicines in the UK.

“Lilly has worked with government, the NHS and the broader health system through this process, providing expertise and data to support national contingency planning and cooperating with the DHSC’s stockpiling strategy, first for the March deadline, and now for 31 October.”

All going to plan?

The spokesperson continued: “Lilly’s Brexit investment has been significant and in many cases our planning, including our own medicines stockpiling, exceeds government guidance. While Lilly has done everything in its power to prepare for Brexit, circumstances outside of our responsibility may disrupt medicines supply. This includes delays at ports of entry, freight capacity on sea and air routes, volatility in demand for medicines due to stockpiling outside of our supply chain, and unpredictable fluctuations in parallel import and export.”

This matter of potential medicine shortages has been one of much concern, argument, rubbishing and reassurance, as well as a very emotional one for many. According to the DHSC, this is understood and adequate steps have been taken: As part of plans that should ensure continuity of supply in medicines, the UK will continue to recognise batch testing of human medicines carried out in countries named on a list set out by the Medicines and Healthcare products Regulatory Agency (MHRA).”

Additionally, the spokesperson added: “We have been working very closely with suppliers since August 2018, asking them to hold at least an additional six weeks of stock (over and above usual buffer stock) of all these medicines in the UK ahead of leaving the EU on the 31st of October.  

“DHSC is in the process of procuring an express freight service to bring medicines and medical products to the UK within 24 to 72 hours if required following 31 October.”

Regarding concerns that the UK could see itself excluded from the wider EU regulatory network if adequate alignment cannot be achieved, the DHSC also confirmed that, in the event the UK exits the EU without first agreeing a deal, the MHRA “will take on all functions currently undertaken by the EU for medicines in the UK market”. Will this place additional undue pressure on the key UK organisation?

One of the major impacts of Brexit will be the end of freedom of movement, meaning UK and EU citizens will no longer have the right to live and work in either region. This obviously means that there is a real possibility that, without an adequate system to install in its place, the UK could lock itself out of the valuable talent pool of wider Europe and succumb to what is known as ‘brain drain’, diminishing its clout as a centre of research and innovation; this could then have a knock-on effect on the efficacy of any resulting medicines and the economic efficiency of clinical trial successes. 

Luckily, the government has voiced its understanding of the gravity of this situation:The government has been clear that after the UK leaves the EU, whilst freedom of movement will cease to apply, we must retain health, social care and research professionals from EEA countries, and continue to attract international talent.

“We have been absolutely clear we want hardworking EU researchers, scientists and healthcare staff to stay in the UK and continue performing vital roles across the sector.”

To make good on this commitment, the Home Office announced plans for an overhaul of the UK’s immigration system which will seek to attract talent based ostensibly on their skillset. This has been generally well-received in some corners of the industry, with Lilly’s spokesperson noting:

“In terms of future immigration arrangements, Lilly has been encouraged by the tone of the Home Office’s white paper on the UK’s future skills-based immigration system, which recognises the value of a system that can facilitate the needs of innovation-led sectors that rely on fluid exchange of talent across international borders. We also welcome the recent announcement of a fast-tracked visas route for elite researchers and specialists.

“However, medical research is a collaborative process involving researchers, technicians, and other skilled workers across all levels of experience,” he continued. “Any new visa system must support unhindered movement for all involved in the discovery process, not just those categorised as ‘exceptional’ or ‘elite’. A restrictive immigration regime, coupled with the loss of freedom of movement, would severely hamper the UK’s ability to attract the talent required to support an innovative workforce. If we do not address this, there is a real concern that other countries will become more attractive destinations for researchers, and the UK workforce will become less diverse, less competitive, and less innovative.”

And speaking of research, the government has moved to assuage concerns in the area: “This government strongly believes that science, research and innovation are vital to our country’s prosperity”, and therefore “is committed to increasing levels of research and development (R&D) to at least 2.4% of GDP by 2027.”

The spokesperson also added that, this autumn, the government will reveal plans to “significantly boost public R&D funding to provide greater long-term certainty to the scientific community”, in order to “accelerate” making these ambitions a reality.

Again, while this is a promising gesture, Lilly’s spokesperson pointed out that there is much more to the story, and why securing collaboration in EU research initiatives is imperative for innovation, especially in the long term: “Many details of the UK’s future relationship with the EU can be negotiated only once we have left the EU. It remains to be seen, for example, how the UK will be involved in future EU research programmes, although planning documents for the next programme, Horizon Europe, set out a clear route for the UK to participate as an “associate country”. The UK’s domestic science base has benefitted significantly from Horizon 2020 (the current programme), both financially and through access to collaborative consortia,” he said.

“Under the umbrella of Horizon 2020, the EU’s Innovative Medicines Initiative (IMI), the largest public private partnership for health sciences in the world, offers an unparalleled opportunity for cross-sector collaboration across Europe. IMI, funded jointly by the European Commission and the European Federation of Pharmaceutical Industries (EFPIA), is a key mechanism for bringing industry together with universities, patient groups and SMEs to spur non-competitive collaborative research in areas of high-unmet clinical need. Lilly is a major contributor to the IMI with our UK teams participating in 15 projects and an approximate financial commitment from Lilly’s UK office of €7 million. Through this, Lilly’s UK researchers are able to participate in projects that collectively leverage approximately €160 million, primarily in the fields of neurodegeneration, depression, schizophrenia, and pain.”

Read the room

While there is a whole spiralling political debate to be had on the legitimacy of the original referendum and the onus on UK Parliament and Government to deliver on its result in some tangible and genuine form, the threat of a ‘no-deal’ exit is almost unanimously agreed upon by industry, including pharma and life sciences, to be a very bad idea. If such an exit were to become a reality, it would deliver the greatest possible shock to the delicate workings of industry operations and all of the domino effect that that entails. Lilly’s spokesperson was keen to stress exactly why this should be avoided at all costs:

“A no deal Brexit would result in the UK’s complete and sudden disassociation from decades of partnership with the EU on medicines regulation and drug safety monitoring,” he said. “We have been very clear with government on the risks this would present and we continue to urge all sides of the political debate to find a way of moving forward, by means of a smooth Brexit transition, towards a future that maintains close cooperation with the EU on medicines regulation and cross-border movement of goods.

“In this regard, we fully support the ABPI’s calls for continued alignment, which we see as an important means of ensuring proportionate, robust, and effective regulation of medicines in the UK. An additional consideration is the size of the market: pharmaceutical companies typically want to bring innovation to patient populations where it can bring the greatest benefit to the largest number of people as possible. Ensuring the UK remains part of the EU’s integrated regulatory system is one way of ensuring that UK patients remain at the front of the queue for future breakthrough innovations.”

The UK life science industry employs 248,400 people across 58,701 businesses, generating a massive £73.8 billion in turnover during 2018. It is a key cornerstone of the nation’s status as a leading innovator in science and medicine, and crucial to the health and wellbeing of its citizens.

Ultimately, one of the most pressing challenges in the future beyond Brexit will be one of resource management. It won’t be easy, the stakes are high, but there is value in grounded optimism, as Lilly’s Senior Medical Director Arash Tazbah explains:

“The challenge of Brexit comes amidst a golden age of scientific discovery, with new breakthroughs fundamentally changing how we care for patients. At the same time, we are acutely aware of the challenges faced by healthcare systems around the world, including the NHS, who are continually asked to do more with less in meeting rising healthcare demand with limited resources.

“It is clear that overcoming the challenges ahead of us, and capitalising on the great opportunities in medical innovation, will require a new era of partnership between industry, academia and the NHS,” he continued. “UK life sciences are unique in being able to draw on the country’s world class universities, a strong pharmaceutical and biosciences sector, and one of the largest single healthcare systems in the world.  If we are to continue to be one of the best places in the world to develop healthcare innovations, while at the same time ensuring that these innovations get to patients in a timely way, we must be prepared to work together to harness the strengths of different stakeholders across the ecosystem.

“The ‘Life Sciences Industrial Strategy’ set a national agenda for putting the UK in a world-leading position; however, its full ambition has not yet been realised and not all recommendations have been implemented. The ongoing political instability in the UK and potential impacts of a no-deal Brexit make implementation of the LSIS more important than ever.

“This will require concerted effort from all concerned, but if there is one upside of Brexit, it is the renewed energy and commitment from all parties to work together so that we can deliver the best possible healthcare for patients.”

Matt Fellows

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