It is now six months since Britain voted to leave the European Union. In that time, a new government has set up two new departments, set out a tweaked economic strategy and fielded a near-constant stream of questions about Brexit. And yet biotech, like all other industries and the British public, is no closer to knowing what life will look like post-Brexit than it was on June 24.
Biotech executives woke the morning after the referendum with questions about how Brexit would affect everything from flows of capital, their ability to hire from overseas and the regulations—and regulatory agency—governing their work. These remain some of the key unanswered questions. And they are also the areas in which drugmakers at home and abroad are pressuring the government for favorable outcomes.
Whether the industry will get any of its wishes—which look at lot like the status quo—will depend on the willingness of the government to steer away from the hard split it has set sail toward. And on the openness of the other 27 countries that make up the European Union to allowing Britain the sort of bespoke relationship sought by the government. As it stands, the position of the British government, such as it can be ascertained, and the rest of the EU both look like barriers to biopharma’s wishes.
The gap between what the British government wants and what the EU is willing to give is illustrated by discussions about the future of the European Medicines Agency (EMA). Today, EMA and its 900 employees are based in London. British politicians want to keep EMA in London, and have presented this outcome as viable and mutually beneficial. The rest of the EU is, to put it mildly, less receptive to the idea, noting the impossibility of having a key institution based outside its borders.
If, as expected, EMA ups sticks once Britain splits from the EU it will find no shortage of cities waiting with open arms. Sweden, Ireland, Spain, Denmark, Germany and Italy are all lobbying to host EMA. Whichever country wins will gain a 900-person-strong institution that will act as a beacon to biopharma. The Japanese government has already warned Britain its drugmakers may follow EMA out of London, although, so far, biopharma companies are continuing to invest in the country.
Politicians have seized on post-referendum investments by Alnylam and GlaxoSmithKline as evidence Britain’s science and other strengths can continue to lure drugmakers after Brexit. But given the lack of detail on fundamental points such as whether Britain will remain part of the EU-wide regulatory system, there is still plenty of scope for the final Brexit agreement to deter investment.
With Britain due to formally signal its intent to leave the EU by March, 2017 could bring answers to some of the outstanding questions. But, equally, with the exit process taking two years—and that timeframe being seen as too short to resolve all aspects of Britain’s relationship with the EU—it is possible biotech executives will head into Christmas 2017 none the wiser about the impact of Brexit on their businesses.