The timeline for the UK’s exit from the European Union is arguably more uncertain than ever following the recent High Court ruling that the government must grant a parliamentary vote before invoking Article 50. While Theresa May insists she has “no intentions of letting this derail our timelines”, many commentators have suggested the landmark decision will prolong the period before Article 50 is triggered.
While the UK may only represent around 3% of the world market for all medicines, it is a global leader in terms of more innovative and costly treatments. The £60bn life sciences sector employs over 220,000 people, many of them in the “golden triangle” of research sites in Oxford, Cambridge and London, which support a thriving private sector. As such, it’s somewhat unsurprising that the UK has the largest pipeline of new pharmaceutical candidates in Europe, raised a third of all European biotech venture capital last year, and is currently home to the European Medicines Agency (EMA).
Brexit poses the life sciences industry four principle challenges: winning research funding, finding talent, securing regulation co-operation and trading with other countries.
Britain is a net beneficiary of EU scientific research funding, receiving €3.4bn more than it contributed to the last Horizon 2020 programme. This additional support has mitigated the effects of stagnant government funding for science in recent years and the research base has continued to thrive from the collaboration opportunities offered by EU programmes.
Many in the sector advocate the UK acquiring “associate member” status for Horizon 2020 (akin to Switzerland, Israel and others) to maintain access to funding on the same terms as currently, there is a great deal of uncertainty as to whether such a status will be attained. So as research centres look for alternative investment there’s no doubt that demand for lawyers will increase significantly.
The UK EU Life Sciences Transition Programme - which is tasked with establishing a consensus on the issues influencing the maintenance and growth of a world-leading Life Sciences environment in the UK outside of the EU - also recognises the importance of sourcing talent for the sector.
Historically one of the major reasons the global pharmaceutical industry has been drawn to the UK is the ability for companies, universities and research institutions to attract, recruit and retain a highly-skilled global workforce. According to the programme’s overseers, the sector will require ‘a needs-based, straightforward, and rapid immigration system that facilitates ease of movement for talented students, researchers and workers, would secure the status of those currently working in UK science, and ensure the UK continues to attract highly-skilled global talent in the future.’
There is little doubt, then, that clients will be keen to seek legal counsel on the post-Brexit status of their highly valuable employees. But perhaps the most pressing issue for life sciences, and subsequently lawyers specialising in the sector, is potential changes to its regulatory environment. The pre-empted departure of the EMA following the UK’s exit from the EU will create a more complicated approval process, and although the Brexit Secretary, David Davis, says he wants to agree with the EU on a “standardised” approval process, the likelihood of such a decision being reached is uncertain.
The UK EU Life Sciences Transition Programme Report argues that if UK regulations were to diverge from those of the EU, the resulting duplication of processes, increased costs and a divergence in standards would make the UK a less attractive place to develop and launch innovative products. A shifting regulatory environment would be of great concern for life science companies, who would require a great deal of legal counsel in order to traverse any new, or interim, regulatory system.
There is little doubt that the government will be keen to mitigate risk for the sector, and given that negotiations will almost certainly take longer than two years, it’s unlikely that the sector will see any real regulatory change for some time yet. However given that the UK still looks set to head for a ‘hard exit’ from the EU, there is little doubt that practices specialising in life sciences will experience a significant uptick in work as the exact nature of the UK’s ongoing relationship with the EU and its implications for the regulatory environment, access to talent, and securing funding, become clear.