Saving the jewel in the crown of ‘UKplc’: Brexit's impact on pharma

Pharma needs to embrace the opportunity to shape the UK’s political agenda in its favour, say experts.

‘Never waste a crisis’ was the take-home message from experts speaking at recent webinar, ‘Brexit: What’s Next for Pharma?’, hosted by pharmaphorum and IMS Health. Instead, they said, the confusion surrounding the shock result of the referendum on 23 June presents pharma with an opportunity to shape the UK’s political agenda in its favour.

Without doubt the UK’s momentous decision to quit the European Union (EU) sent tremors around the world, triggering a cascade of events that led – within the space of a few weeks – to a new prime minister, a new government and a new political agenda. But, while the waters appear to have calmed somewhat, significant implications remain for ‘Ukplc’ – and pharma as a critical contributor – as the country enters an unprecedented period in its history.

With so many unanswered questions about the course the country will set, NHS Confederation chairman and former Health Secretary, Rt. Hon. Stephen Dorrell, and IMS Health’s vice president for Thought Leadership in Europe, Sarah Rickwood, led the panel in a webinar designed to allay the confusion and uncertainty surrounding the UK’s withdrawal from Europe.

Timing

One of the biggest uncertainties remaining is when Brexit will officially happen, with some predicting a lengthy delay before Article 50 is invoked and then a minimum two-year negotiation period on the terms under which the UK will leave. With no parallel and no precedent to build on – the closest being Greenland, which had a population of less than 55,000 when it left the European Economic Community in 1985 – it is unsurprising that many are sensing the waters could be a little choppy in future.

Indeed, a poll taken during the webinar showed 66% thought Brexit would have a negative impact on pharma investment in the UK, 16% said it would have no direct effect, and 14% did not know whether it would have an impact. Just 5% thought Brexit would benefit the UK.

All of this confusion is an anathema to pharma, which can take around 10 years to develop a new drug, a point made by Rickwood, who told the audience: “The pharmaceutical industry is a long-range planning industry that needs long-range certainty.”

Central to the concerns is that the UK is seen as a key country for the global life sciences industry. Not only is it a test bed for innovative drugs and a key global centre for R&D, but the country plays a pivotal role in the harmonised European regulatory system with the Medicines and Healthcare products Regulatory Agency (MHRA). In addition, NICE holds a prominent position as a globally-recognised health technology assessor.

Tim Sheppard, general manager, UK and Ireland at IMS Health, added: “The British economy is also the fastest growing of the EU5 economies. To think that is linked entirely to our membership of the European Union is probably false.”

Support for cutting-edge medicines

Although its 3% share of the world’s trillion-dollar-plus pharma market may seem small, the UK is prepared to fund cutting-edge speciality medicines – as long as the price is right – and provide a return on investment for industry, Rickwood noted. “The UK is a significantly greater contributor to the sales of those new chemical entities than any of the BRIC countries [the four largest developing economies, Brazil, Russia, India and China].”

Yet there have also been clear issues with regard to access, uptake and adoption of new medicines in this country, with members of the panel urging industry to use this time of change to its advantage, saying negotiations over the UK’s relationship with the EU and talks with future trade partners could provide the sector with an opportunity to influence government policy and give the UK government an incentive to invest in pharma.

“If you look at the NHS there has been a lot of pressure on funding, particularly funding for new drugs,” said Mike Bewick, former deputy medical director, NHS England.

Drawing on his experiences as health secretary, Dorrell suggested several policies the government could explore to ensure pharma continues to invest in the UK post-Brexit, including more of the kinds of working arrangements that have already proved successful for pharma companies in the UK.

“Pharma is part of healthcare, and what we need to be doing is encouraging closer links between healthcare delivery and development of the industry,” Dorrell observed. “Central to this is to build on London’s status as a city of research and promote it as a major life sciences hub.”

Certainly it’s not all doom and gloom and there have already been some positive developments since the Brexit vote that could benefit pharma.

Top of the list is the new Cancer Drugs Fund (CDF) standard operating procedure, which puts NICE in charge of assessing the cost-effectiveness of oncology drugs – a move that could accelerate access to cancer drugs in the UK if the industry is prepared to play its part in developing real-world evidence for new medicines.

Delay, deny, diminish

Many of us working in the access environment feel it’s been very much about delay, deny and diminish in terms of access to drugs in the NHS. Although there are a number of considerations inherent in the new CDF and the much-anticipated publication of the Accelerated Access Review, there are promising signs that patient access to medicines could improve post-Brexit.

Pharma can use Brexit to ensure it remains the jewel in the crown of UKplc. But there are real problems to address, not least the fact that the NHS is greatly underfunded, with even well-established hospitals struggling for cash. History shows us this translates into delays in funding new drugs and treatments.

“The real underlying issue is the funding of the NHS,” warned Leslie Galloway, chair of the Ethical Medicines Industry Group (EMIG), representing small and medium sized pharma companies. “The UK spends 8% of GDP on healthcare – less than Germany, Greece, France or Spain – and this must change if patients are to see an improved health system in the years to come,” he argued, pointing out that pharma will begin negotiations over a new pharmaceuticals pricing deal with the UK government next year.

And Dr Rick Greville, director of distribution and supply at the Association of the British Pharmaceutical Industry, which will lead the pricing negotiations, is also optimistic about the future. “For the fifth-largest economy in the world, it’s a shame we’ve moved towards the back of the queue for new drugs. I think that will change with this new government.”

But events are moving fast, and since the webinar there are suggestions that the UK economy could falter as a result of Brexit. If the economy is stagnant or sinks into recession the government will have less money to spend on the NHS, and that impacts access to medicines.

With Jeremy Hunt retained as health secretary, the NHS needs a radical change of policy and a much-needed injection of money if the UK is to maintain its standing as an investment hub for the life sciences and a centre of excellence for the broader research community.

In order to better understand the potential impact of Brexit on both pharma and healthcare in the UK, listen to the full on-demand debate here: https://pharmaphorum.com/webinars/brexit-webinar/

About the author:

Angela McFarlane is Market Development Director, IMS Health Market Access.