MAKING A SUCCESS OF BREXIT
As the EU currently accounts for around 44% of the UK's pharmaceutical exports, continued barrier-free trade between the UK and EU is crucial  . The EU's import tariff on the majority of pharmaceutical products is currently 0%, but many of the raw materials pharmaceutical companies use and process do potentially face tariffs – including a 6.5% tariff on the salicylic acid used in aspirin  – as do the components of supporting machinery. As supply chains for this industry criss-cross EU borders, there is a fear that businesses could face tariffs and non-tariff barriers at numerous stages of production. An increase in the costs of producing and importing life sciences products should be avoided as far as possible to prevent price rises for the UK's healthcare provision and agriculture.
The production of life sciences products is regulated at every stage – through clinical trials, authorisation to market, advertising, packaging, labelling and checking throughout its lifetime – to ensure medicines are effective and safe. The life sciences sector takes particular pride in the quality of its processes and products as a result. These stages of production can currently take place in different locations, with the process criss-crossing borders. Through close alignment of regulatory systems, the pharmaceuticals authorised for sale in the UK can be sold throughout the EU, monitored by the pan-EU European Medicines Authority (EMA) which is based in London. The life sciences industry is clear that any UK regulatory agency must remain as closely aligned as possible to the EMA, avoiding duplication, with concerns about impacts to patient access to medicines in the UK and potential business implications, such as the possible deterrence of investment into the UK. Any movement away from this system would require a transitionary period to allow for the establishment of an independent UK regulator.
Rules on Intellectual Property and data flows are also particularly important to life sciences companies, and the UK government will have to consider whether future involvement in the European Centre for Disease Control may be beneficial to share intelligence on disease spread. Other areas for continued cooperation for expertise and data-sharing between the UK and EU include on designing future medical devices, with benefits for public health as well as industry.
Retaining access to the skills the UK life sciences sector needs is vital, alongside support for the skills agenda domestically. Currently, 17% of STEM academics at UK research institutions are EU migrant  . However, there is also concern about the ability to attract lower-skilled migrant workers in the supply chain.
The life sciences sector welcomed the government's reassurance for Horizon2020 funding, but as life sciences companies spend £4.1billion on R&D a year  , a long-term strategy for R&D funding and innovation is needed.
Before the UK leaves the EU, it will have to transpose EU regulations related to life sciences. If it does not, and the UK leaves the EU without a deal, there will be a significant amount of regulatory instability, potentially affecting companies' abilities to sell products. Even if the UK does take domestic action, without a deal UK companies will have to secure EU licenses to sell into the EU market. This may disrupt both current and future contracts if no interim agreement or new deal is secured.
For life sciences at the CBI, contact: Nicola Hetherington on 0207 395 8080 or Nicola.Hetherington@cbi.org.uk