Alongside finance and law, the industry which occupies a central place in the heated Brexit debates is the life sciences. From the infamous campaign bus which hit the road with Vote Leave’s empty promise about £350 million a week for the National Health Service to the latest ominous warnings of post-Brexit shortages of drugs and medical devices, we would struggle to find an in-depth analysis of the impending political divorce which does not feature the life science sector.

According to the British government, there are now 5,649 life science businesses with a presence in the UK, generating a turnover of over £70bn (a 9.3% increase between 2016 and 2017). Last year, Britain received the highest level of life science foreign direct investment projects in Europe. On the research front, the prestigious universities in Oxford, Cambridge and London account for 12% of total life sciences academic citations and 18% of the most-cited publications.

And yet, the UK’s share of the global life science industry is just 3%, as pointed out by Health and Social Care Committee’s report before the House of Commons a couple of months ago. The Committee asserted that this small percentage means that the country could not form a standalone regulatory system – an assumption backed by the UK Life Science Industrial Strategy report, which says: “Relatively speaking, the UK market is too small even with the fastest and most innovative regulatory system in the world to stand alone from a larger decision-making bloc.”

The reports also underline that the decision-making bloc which the country is due to leave is a source of considerable funding and facilitates unhindered cross-border collaboration. Through its programmes, the EU allocates around £10 billion a year to researchers, and a fifth of that sum goes to British ones, making the UK one of the strongest performers in the European Research Area.

These factors secure UK’s essential role in the European strategy of many multinational life science corporations, which have chosen the country as a base for their EU research, development and manufacturing centres, and as a gateway to the world’s largest free market. The country’s life science sector is naturally worried that the loss of funding and market access post-Brexit would compromise its role as a top player in this field.

A recent research by PwC suggested that if the UK is not governed by the EU Clinical Trials Regulation, which facilitates large pan-European trials, its participation in these trials would be more difficult and costly, which would prevent companies from including the UK in trial designs. If the government leaves the European Economic Area (EEA), which it is determined to do, the UK will no longer be a part of the area’s centralised authorisation procedure for licensing medicines, which means that companies would have to submit a separate UK marketing authorisation application to the UK Medicines and Healthcare Regulatory Agency (MHRA), which in turn will result in increased demand on the agency and slower UK market access.

By the way, the MHRA, alongside other UK bodies, is currently very influential in shaping European regulations – something which will no longer be the case after Brexit. In addition, the European Medicines Agency (EMA) is to relocate from London to Amsterdam. The UK may also not be covered by Unitary Patent, which guarantees uniform patent protection across the EU with a single application.

The Voice of the Industry

At a time when UK’s research reputation is in jeopardy, the life sciences sector is mindful of the dire need to convey strong messages about the continued attractiveness of the country’s market: the expectations of investors should be carefully managed if the industry is to thrive beyond the current uncertainty. Given the sector’s centrality for Britain’s image, the way experts in this field formulate their opinions plays a critical political and economic role.

As part of our efforts to analyse the situation, we spoke to Sami Agush, a business analyst at the Association of British HealthTech Industries (ABHI), which voices the interests of companies in the UK health technology sector.

Agush tells us that leveraging the global reputation of UK regulators is crucial, and the key for doing that is to empasise the essential role which British UK watchdogs play in the European oversight network. This becomes even more pertinent when the implementation of new regulations overlap with the timeline of the divorce negotiations, as it is the case with the new European Medical Devices Regulation (MDR).

The association has voiced the need for a medical technology export campaign – a designated, long-term, country-by-country strategy for UK medical technology companies, led by market-specific champions.

Agush asserts that the EU is UK’s biggest health tech trading partner: of the £5 billion total of imported technology, £3.2bn comes directly from the EU and UK’s reliance on this source has also increased by 20% in recent years. In addition, 80% of technologies used by the UK’s National Health Service are ultimately imported from the European Union, even if it is not manufactured there, and for around 20% of procedures, the necessary equipment is supplied on a next-day basis. This means that any delays and disruptions to the movement of these goods as a result of the negotiations will be felt most acutely by the patients who rely on them.

“We have consistently made this point to relevant stakeholders on both side of the Brexit table over the past two years”, he says, adding that it is also important to lobby for maintaining favourable terms for trading within and outside the EU, along with an integrated domestic policy to support investment, competitiveness and export performance. Other priorities which the association has put on the map are manufacturing, the domestic skills gap, bespoke support for UK’s vibrant small and medium-sized enterprises community, and enhanced collaboration with the health and care system.

Companies in the Forefront

While associations such as ABHI communicate the concerns of the industry to policy makers, the actions and comments of specific companies immediately catch the media’s attention. We surveyed the Brexit coverage from the day of the referendum to determine which players have the strongest media presence.

Britain’s second-biggest pharmaceuticals company AstraZeneca rules the roost with stories about its Brexit preparations and the comments by its spokespeople. The top trending story about the Anglo-Swedish giant is about its non-executive chairman of the board Leif Johansson saying that his company has started preliminary preparations for the possibility of a hard Brexit, which would mean moving some of its operations away from the UK: “Moving manufacturing takes several years. The likelihood of us moving in to the EU is high in that case (hard Brexit).”

Another company move which hit the headlines was CEO Pascal Soriot’s refusal to sign a public letter welcoming the government’s efforts to make Brexit a success and to confirm that “global Britain has the potential to become one of the most productive economies of the 21st century”.

Theresa May’s office has asked blue-chip FTSE 100 companies to support the prime minister’s vision by putting their name down on the document, but it was reported that the appeal was unsuccessful among many large corporations. Most of them did not want to comment publicly, while Soriot was not shy to say: “The reason I didn’t sign is that I felt there are so many areas that are still uncertain. How can we support something that we don’t really understand fully?”

He was also careful to note that his refusal to sign the letter did not mean the company disagreed with Britain’s vote in the referendum, and that leaving the world’s largest trading bloc could have some positive consequences if the UK life sciences sector receives adequate support. Soriot also said the company will “wait to see” before increasing its UK investment because of all the uncertainty in the pharmaceutical sector, and especially the lack of clarity over the regulatory framework for new medicines.

AstraZeneca’s spokespeople joined their communication forces with experts from Cambridge University and charity Cancer Research UK, speaking to the Brexit Committee about difficulty of validating batches of medicines for use across the EU, recruitment hurdles and loss of funding.

Britain’s biggest pharmaceuticals maker, GlaxoSmithKline (GSK), has been engaging in issuing similar warnings – the best documented one was that, whatever the outcome of trade talks, it would have to allot £70 million to prepare for Brexit, including for new regulation processes, labs and approval systems, instead of investing that sum in developing cancer drugs.

Phil Thomson, president of global affairs, told the Commons health select committee: “Obviously, that money could though, be being put behind clinical trials, and I can tell you right now that we have a cancer portfolio we are trying to invest in, into which that money should be going, to develop the next generation of cancer medicines. That is something – I will be honest with you – that we are wrestling with internally inside GSK.”

An International Endeavour

The government tries to soften such blows by striking a Sector Deal with the life sciences industry, as part of which GSK will invest £40 million in genomic research. GSK’s head of research Patrick Vallance noted that Britain is still an attractive hub for drug discovery, but he was quick to warn: “The UK needs to recognise going forward that science is an international endeavour, not a parochial endeavour.”

The government emphasised that its new industrial strategy, which prioritises life sciences along with construction, artificial intelligence and the automotive industry, had been successful in securing investments from American healthcare companies Johnson & Johnson and Merck & Co, and German diagnostics company Qiagen. The Financial Times estimated that it would be more than one billion pounds, but the companies did not give exact figures.

The news were not put in entirely positive light – although Merck & Co said that Britain is a world-leader in science, a spokeswoman stressed there are real Brexit concerns surrounding supply chains, drug regulation and the ability to attract talent. Meanwhile, the UK head of American pharmaceutical conglomerate Pfizer, Erik Nordkamp, wrote in the Financial Times: “The UK pharmaceutical industry and the patients who rely on it are under serious threat from Brexit as well as from the flawed way medicines are developed, tested and made available to patients in the country.”

Having reported a strong increase in earnings due to demand for its oncology and immunology products, Swiss pharmaceutical giant Roche focused its warnings on research risks. The company was also eager to caution that the UK would lose its leading position in the drug research market, with CEO Severin Schwan sharing that the future regulatory climate could cause delays in authorising new drugs and hinder the access to innovative treatments: “If certain cutting edge innovative medicines do not become part of the standard of care in the UK, this hampers research and development.”

With the UK accounting for less than 3% of Roche’s sales, Schwan anticipates that Brexit would not be a strong hit, and his comments did not focus on the company itself. The focal point of his concerns was that negotiators do not understand the international character of research projects: “That is my biggest fear with Brexit — that those silos of thinking get even more separated.”

In the UK, where discussing the NHS is something like a national sport, the way related messages are conveyed plays a defining role in politics – this is exemplified by the impact of the Vote Leave’s promises for more funding and Theresa May’s controversial “Brexit dividend”.

News and comments about the life science sector often trigger stronger public reaction than reports on developments in other sectors – unlike areas such as finance and law, which can feel distant to the general non-specialist public, health-related issues usually spark more vigorous debates among common media consumers.

This is in part what makes corporate communications in the life sciences such an intricate issue (for reference, see our piece on the subject), and this is why the industry’s voice during the Brexit negotiations is so prominent.

Companies defending their interests also do much about their public image. According to Reputation Institute’s Global Pharma RepTrak 2017, a key reputation driver is citizenship, the company’s role in public life. In the UK, there has hardly been a better context for stepping up the PR efforts in this aspect.