The pharmaceutical industry is one of the most dynamic in the UK and is a major contributor to the economy. As well as being the home to the pharmaceutical giants GlaxoSmithKline and AstraZeneca, the UK hosts the sizeable operations of many other leading international pharmaceutical companies. It is therefore of importance to the UK economy that British-based pharmaceutical operations are able to continue thriving, post-Brexit. However, the most likely outcomes of Brexit are not the preferred options for the pharmaceutical sector, based on the results of GlobalData’s survey of 156 participants in the pharmaceutical industry across the US, UK, and EU.
Participants indicated that reversal of the referendum result is the best outcome for the healthcare industry, with 48% selecting “No Brexit.” However, only 6% of respondents indicated this is the most likely outcome of Brexit. Potential explanations for this trend include less certainty among respondents over the future of Brexit, the prospect of a “no deal” Brexit becoming increasingly likely, and the negative press associated with Brexit in the healthcare sector, such as AstraZeneca, Sanofi, and the National Healthcare Service (NHS) announcing the stockpiling of drugs to prepare for all potential outcomes of Brexit. That being said, 48% of participants indicated that a “No deal” Brexit or Brexit with a deal with the EU are the best outcomes, of which soft Brexit options were preferred, with the “Norway model” being the most selected option (17%).
|Table 1: Different Possible Outcomes of Brexit|
|“No deal” Brexit||The UK resorts to World Trade Organization rules|
|The Canada model||Partial alignment to the EU Customs Union under a “bespoke deal”|
|The Turkey model||Full alignment to the EU Customs Union through a bilateral agreement|
|The Switzerland model||Full alignment to the EU Customs Union and paid membership of the European Free Trade Association|
|The Norway model||Full alignment to the EU Customs Union and paid membership of the single market, including freedom of movement|
|No Brexit||Reversal of the referendum result|
There was much greater uncertainty over the most likely outcome of Brexit, with a more even spread between different options. However, in general, hard Brexit options were the most likely to be selected, with “No deal” Brexit the most chosen answer. Overall, participants indicated that the most likely outcomes of Brexit would not be the options they believed to be best for the healthcare industry, indicating that there is a potential concern among those in the healthcare sector regarding the UK economy after Brexit.