Luke Tryl is a former Special Adviser to Nicky Morgan.
It was a clear sign of the priority that Theresa May would place on promoting Britain’s life sciences that she said in her leadership campaign speech: “It is hard to think of an industry of greater strategic importance to Britain than its pharmaceutical industry”.
It’s not hard to see why: UK life sciences contributes over £60 billion to the British economy, employs over 220,000 people and is a key driver of foreign investment. Life science companies contribute more to UK research and development than any other industry, and generate a significant trade surplus. They do this because the UK is a uniquely attractive market. Global corporations and ground-breaking start-ups choose to base themselves in the UK because of our world leading universities, the strength of the NHS and the fact that the Government has taken serious measures to make Britain a cradle of innovation. Many analysts predict that UK life science hubs will come to rival the likes of Boston and San Francisco.
So it is hard to overstate the importance of the sector both to our economic health and to our ability to maintain and develop the quality of life in Britain. It is undoubtedly disappointing, then, that life sciences featured so little during the referendum campaign, compared to financial services or the automotive industry. The report that Public Policy Projects has released this week is designed to correct thus, and ensure that, having missed out in the referendum debate, life sciences are front and centre of the forthcoming Brexit negotiations.
British life sciences can thrive within a new EU-UK relationship. We have only to look at the strength of the pharmaceutical industry in Switzerland to see that. But it is the nature of that new relationship that will determine the future success of UK life sciences. Using data based forecasts from QuintilesIMS, the report shows that the further the divergence and the greater the barriers we erect – or if you like the harder the Brexit – the greater the risk to UK life sciences will be.
A key concern is regulatory alignment. The Medicines and Healthcare Products Regulatory agency (MHRA) and European Medicines Agency (EMA) are hardly household names, but they are the bodies responsible for authorising drugs in the UK and across Europe. Currently, the two organisations work closely together and regulatory harmonisation allows pharmaceutical companies to secure approval for new medicines across the entire of the EU in a single process. That benefits patients, companies and taxpayers. If this relationship was severed as a result of Brexit, the UK would have to adopt its own separate procedure for new drug launches. Hard commercial reality dictates that if companies have to choose between launching drugs in the UK, which accounts for 2.5 per cent of the global market and the EU, which accounts for 16.6 per cent, then they will prioritise a European launch. That won’t just be bad for the British economy and British research, but for British patients who could find themselves waiting years longer for innovative new medicines that are readily available elsewhere.
Getting the right trade deal is also a key concern. The arguments of some who suggest that Brexit is an opportunity to turn away from the European market and towards emerging economies doesn’t wash for life sciences. 90 per cent of high-tech innovative medicine sales over the next five years will come from the US, Japan and the EU, while the BRICT countries will make up just 2.2 per cent. For that reason, it is vital that if we want UK life sciences to thrive, securing a seamless and low burden trade relationship with Europe, ideally through access to the Single Market, should be a key priority.
The report also warns of the dangers of undermining the very thing that makes the UK so attractive as a centre for research and development – our unique science base. The UK is a net recipient of EU scientific funding, receiving around €8.8 billion in support. The fact that the Government has made commitment to maintaining scientific funding in the short-term is welcome, but just as important as the financial benefits EU scientific support offers are the benefits of collaboration provided through schemes such as the Innovative Medicines Initiative, to which UK access must be preserved. Again, there is no reason why the UK could not participate in EU science projects post Brexit: both Turkey and Israel do. But the decision of the EU to restrict Switzerland’s access to scientific funding after they voted to limit freedom of movement sets a worrying precedent.
This emphasis on the global nature of life sciences is an important theme which runs through the report. Quite apart from the importance of ensuring that UK regulatory structures are recognized in other key markets, it is also important to ensure that UK-based employers have access to the best talent and universities the brightest minds. As the Prime Minister rightly said earlier this summer: “Our research base is enriched by the best minds from Europe and around the world”. For that reason, the report argues strongly that we must ensure continued ease of movement of academics and science workers. Changes to the way freedom of movement operates were a key demand of the electorate in June, and it is a demand that the Government must meet. However, as others have argued on this site this week, that concern does not seem to extend to students and academics, who must be able to come to the UK freely.
The truth is that there is no such thing as ‘insular life sciences’. We either participate in the global scientific community or we isolate ourselves and watch UK life science wither. Post-Brexit, we can certainly continue to make the UK an attractive destination for life sciences, and even remove some of the more burdensome European regulation. But at the same time we must also ensure maximum connectivity, engagement and harmonisation with the rest of the EU. A ‘Hard Brexit’ for life sciences would fail to do that, putting a key national industry at risk. Our hope is that the Government will continue to recognise the immense importance and potential of life sciences in the UK and do everything in their power to deliver a Brexit deal that builds on that potential, rather than compromising it.