The Brexit Fallout – One Month On

26th July 2016 (Last Updated July 18th, 2018 09:16)

CTA editor Henry Kerali speaks to Andrew Thompson, GlobalData, who assesses the UK pharma and medical device landscape one month on from Brexit

The Brexit Fallout – One Month On

In the month since the UK decided to leave the EU, there have been seismic changes in the landscape of British politics. As David Cameron stepped down ignominiously, in stepped Theresa May, a safe pair of hands many feel could steady the ship in turbulent times.

But while there’s been a sea of change in Westminster, the UK pharma and medical device industries has looked on somewhat anxiously as it navigates its own way through choppy waters.

CTA editor Henry Kerali recently caught up with Andrew Thompson, who's the Director of Therapy Research and Analysis, Medical Devices at GlobalData. In this compelling interview, Thompson explains that while there are obvious dangers to the UK leaving the EU, it might not be all doom and gloom…

Clinical Trials Arena: Andrew, what are your general thoughts on the Brexit vote, and how do you feel it could impact clinical research in the UK?

Andrew Thompson: The immediate impact is going to be more regulatory. From a medical device point of view, later this year there are more acts and directives coming into force that are meant to be a part of UK law, but won’t take effect until 2019-2021. Incidentally, this is just around the time when Brexit is meant to take place, so the question arises as to whether or not these directives will be implemented into UK law. If not, does that mean medical device companies across the UK will need to have products recertified for selling in Europe?

You sense currently there’s a huge element of uncertainty at present, particularly for companies that have device products in the pipeline. But the hope is there will be some form of mutual recognition among the powers that be.

As these new acts come into effect, there will be much more intrusive auditing of medical device development and production than right now. At the moment, it’s affecting the self certification process, but I think that’s part of the TTIP agreement – they’re trying to align EU legislation close to the way the US regulates medical devices and this is all part of that process.

CTA: You touched upon the uncertainty of new regulations coming into effect over the next few years. As the UK extricates itself from the EU, how do you think that will impact the industry?

AT: In terms of clinical trials, the UK could choose to implement the new EU regulations in order to play a part in that. Alternatively, it could go the Canadian route where if you look at their industry, the Canadians do very little R&D, but conduct many clinical trials, and that’s because Canada has an ethnically diverse population. Now that’s not a great prospect for UK R&D – running trials on behalf of another company based outside of the UK without innovation input, but that might be the path we’re heading towards.

In other words, the UK could choose to adopt a unique regulation which could ultimately be less bureaucratic. On the other hand, if you’re developing a new product and part of your business plan is to raise funds to conduct a clinical trial, you might turn to the EIB (European Investment Bank) – or another EU investment vehicle – that may require the study be subject to EU rules. So essentially, those may be drawn out of the UK into continental Europe.

Nevertheless, a lot depends on which direction you want to take. If the UK wants a stake in innovative R&D, it probably needs to adopt the European standards. But if it decides to go on its own, that might mean leading to a decline in clinical trials in this country.

CTA: How do you think Brexit could impact access to talent?

AT: On the one hand, if a company is recruiting from the UK to overseas, if anything that just expands their talent pool from what they have right now. I think in all practicality if a points system was in put place, most European scientists would be top of the pile because they’d be so highly qualified in many respects. Except now, they would be competing against a global workforce, so from a sponsor company’s point of view, it doesn’t make a world of difference.

On the other hand, UK companies account for nearly 50 percent of the EIB venture capital investments. If that were to stop, it would mean more innovation would come from Europe as more EU zone start-ups access funding. Therefore, you may find some of the scientists that might come to the UK might work for innovative companies based in Germany, France or Denmark instead, meaning the UK might find it harder to recruit, not because of barriers put up by the UK government (the visa barriers will be inconsequential), I’d just think it makes the UK less attractive because we’d have less investment in the country. There are lots of innovative start-ups in London, Oxford and Cambridge, places able to recruit the best and brightest – those people would in turn go to places with increased funding in continental Europe.

CTA: With all the doom and gloom that’s been said about Brexit, what do you think the potential benefits of Britain leaving the EU could be?

AT: Well if the UK decided to develop its own standards for running clinical trials, it could reduce the bureaucracy, streamline processes and lower overall expenditures. That could enable us to compete on a more global level. In terms of other clinical research, I’m sure if the UK has in place cost sharing agreements effective with the whole of Europe as a result of Horizon 2020, it could also open doors for similar agreements with other countries. If for instance the UK, Canada and Australia decides to pool R&D resources that could be a potential upside, and could form part of a future trade agreement or memorandum of understanding between the countries.

So it’s not all doom and gloom. Fundamentally, we have a lot of talent in the UK, we have universities that are in the top 10 in the world for life sciences. I think the UK will continue to be seen for many years as an attractive place to do R&D just because of the intellectual assets here, so that will be maintained. However, the hope is at the end of all this process not a whole lot will have changed.

 

 

*Andrew Thompson is the Director of Therapy Research and Analysis, Medical Devices at GlobalData. To access the white paper he wrote on the Brexit fallout, click here

 

Photo Credit: Jeff Djevdet via speedpropertybuyers.co.uk/