U.K.’s path to ‘hard Brexit’ raises worries, cautious optimism

The U.K. is prioritizing control of its border over access to the single market.

The UK BioIndustry Association (BIA) has responded with cautious optimism and concerns to the British prime minister’s clearest statement yet on the priorities for Brexit negotiations. Theresa May drew praise for talking up the importance of science and cross-border collaboration to post-Brexit Britain, but is yet to provide clarity on key points including immigration and regulation.

May, who became prime minister after David Cameron stepped down following the Brexit vote, has spent the the past six months saying the bare minimum about her priorities for negotiations.

That changed this week when May confirmed Britain will leave the single market, a trading bloc that allows companies in the European Union to sell across borders, and her ambitions prohibit full membership of the customs union. May also vowed to end free movement of people between the U.K. and the EU.

Whether this course is good or bad for the drug industry depends largely on the processes and deals the U.K. forms to replace its existing relationship to the EU. Drugmakers want to move goods and capital across borders and have access to the best international talent. The free movement and trade inherent in EU membership at least partly meets these priorities. If the EU and countries outside the region play ball, drugmakers could have ready access to more markets than today. But that, like the ability to hire from overseas post-Brexit, remains uncertain.

Clarity on some questions will only come when U.K. and EU negotiators sit down and try to iron out deals. In the meantime, May is seeking to allay the fears of the drug industry by talking up the role science and cross-border collaboration play in her vision for Britain.

“A global Britain must also be a country that looks to the future. That means being one of the best places in the world for science and innovation. One of our great strengths as a nation is the breadth and depth of our academic and scientific communities, backed up by some of the world’s best universities. And we have a proud history of leading and supporting cutting-edge research and innovation.

“So we will also welcome agreement to continue to collaborate with our European partners on major science, research, and technology initiatives. From space exploration to clean energy to medical technologies, Britain will remain at the forefront of collective endeavors to better understand, and make better, the world in which we live,” May said.

BIA CEO Steve Bates welcomed aspects of May’s speech, while highlighting areas that still need to be addressed. The concern is that, for all the talk of supporting the industry, any deal amounting to a clean split from the EU regulatory network could, at the very least, cause disruption in the near term.

Bates used May’s comments about it making “no sense to start again from scratch” where existing arrangements work to argue in favor of maintaining regulatory ties with the EU. But as at least one politician close to May has no problem with the U.K. leaving the EU-wide regulatory system, there remains considerable uncertainty about the processes that will govern the development and approval of drugs post-Brexit.