How free trade agreements could strengthen our resilience

The pandemic, layered on top of a post-Brexit Britain, has shone a light on how and where we source materials from like never before. And from stockpiles to shortages, healthcare has been a sector at the very forefront of public consciousness – just think paracetamol, PPE and ventilators.

We cannot afford to be complacent and hope a similar pandemic does not happen again. The solutions are many and varied. But partnerships and trade will not only pave the way to a more secure future, they will help propel the UK economically on the world stage too.

Specifically, free trade agreements could allow us to strengthen our resilience by diversifying where we obtain essential products from – including, for example, ensuring the NHS is not reliant on only one or two countries for many medicines.

Why a diversity of suppliers matters

Generic medicine manufacturing is an example of one of the UK's most important but least known industries. How many people know that four out of five NHS drugs are generic medicines?

Generic manufacturers produce the same product when an original drug ends its patent-protected period (typically 15 years). Due to competition, the generic has the same patient benefit at a lower price – cutting the NHS's drugs bill from £36bn to £21bn a year. Consequently, the NHS must have a resilient supply chain for generic meds, many of which are sourced from Europe as well as much further afield.

Supply was tight at times as demand spiralled during the pandemic, and although patients have not gone short, a knee-jerk response to Covid-19 may be to focus solely on building more manufacturing here. But it's an overly simple answer to a complex problem. Even if we could manufacture more medicines locally – and we already make almost a quarter of the NHS's generic meds in the UK – manufacturers rely on active pharmaceutical ingredients from overseas.

It’s why a diverse source of suppliers is critical. And it’s why appropriate trade agreements can play a critical part in protecting us against the future risk of potential medicine shortages.

Currently, the government is negotiating on many fronts regarding future trade arrangements. Underpinning all those conversations is a clear manifesto commitment that the NHS, its services, and the cost of medicines are not on the table for any free trade agreement. This commitment is vital, but we must also not forget the positive opportunities which any potential deals could deliver.

The UK-India FTA is a clear example of the benefits to be had

Take, for example, India, where discussions on future trading arrangements are underway. India is, of course, crucial to the global economy as a sizeable manufacturer with an educated workforce, an international diaspora, and a growing domestic market. And given the UK's shared history, cultural, and business ties with the country, a bilateral partnership seems increasingly logical.

A trade agreement with India would have many benefits, especially for the UK's generic and biosimilar medicines industry, which has strong ties with the country.

Our sector supports around 25,900 jobs in the UK, many of which are built on Indian trade. A third of our members are headquartered in India, while others have manufacturing bases or contract supplies from the country. Around one-third of medicines used by the NHS come from India. Additionally, about 50% of all generic medicines' active pharmaceutical ingredients are produced there; hence UK manufacturers rely on Indian raw materials.

Given our industry's deep linkage and mutual dependency with India, a UK-India trade agreement offers the chance to make our supply chain for the NHS even more resilient. For example, we could supply medicines to the NHS four weeks faster: if batch testing and release have already taken place in India, it does not need duplicating in the UK.

So, one crucial lesson from the pandemic must be that we cannot take the NHS's generic medicines supply for granted. The government – whose Life Sciences Vision did not consider generic medicines – needs a strategy for the UK's most critical industries. Enhancing the NHS's supply chain resilience through trade would be an important start.