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Brexit clock ticking once again, UK heads for European elections

New deadline gives pharma more time, but no more clarity

brexit

Following the EU granting a second extension to its exit, the UK Parliament now has until 31 October to pass a withdrawal agreement, or once again face the possibility of a ‘no deal’ Brexit.

However, there isn’t much optimism in the UK or in the EU27 countries that a solution to the parliamentary deadlock can be found anytime soon.

After an Easter recess, talks between Theresa May’s government and the Labour opposition have resumed, but seem destined not to yield a compromise acceptable to both sides.

Meanwhile the prime minister has decided to hold off on any further attempts to cajole MPs into voting for her deal until after the UK local elections on 2 May.

May’s promise to her party had been that she needed just a few extra weeks to find a way of getting her deal through Parliament, and thereby avoiding the need for the UK to take part in European Parliament elections on 23 May.

However, this now looks like extremely unlikely, and the populist Brexit Party, led by the Conservative’s old nemesis Nigel Farage (formerly of UKIP) looks on course to win many MEP seats at the Conservative’s expense.

The newly formed party is capitalising on Brexit voters’ anger at the government failing to deliver an exit from the EU, reflecting a decline in opinion polls which also closes off the option of calling of a general election.

At the same time, anti-Brexit parties, such as Change UK (aka the Independent Group) and the Green Party could do well in elections, reflecting growing calls for a second referendum. However this outcome looks unlikely, at least for the immediate future without the support of Labour’s leader Jeremy Corbyn, who is ignoring grassroot supporters’ calls to make a second vote its unambiguous policy.

Implications for pharma

As with other business sectors, the UK life sciences sector was grateful for a no-deal exit being avoided on 29 March and then 12 April, but the government says that a no-deal Brexit still cannot be ruled out.

The UK’s biotech sector association the BIA says it has been working with the government to understand the consequences of the extension for our members and the wider UK life sciences sector. The sector continues to show strong signals from its financing, thanks to the strength of its R&D base, but has undoubtedly suffered from nearly three years of uncertainty around Brexit.

Last week the sector received a letter from the government's Office of Life Sciences stating that the Cabinet Office has now confirmed the next date for a possible no-deal Brexit will be 31 October.

This means that government has no plans to pull the plug early on the extension, but is no surprise at all.

The BIA has tried to see the silver lining to this news, commenting that “this clarity from government is welcome and should provide some respite to companies and the wider sector that a no-deal scenario is months, not days or weeks away”.

AstraZeneca, one of the UK’s two biggest homegrown pharma companies (along with GSK) is feeling confident about its 2019 forecast, regardless of Brexit.

It advised in its Q1 update: “All guidance and indications provided assume that the UK’s anticipated exit from the European Union, even in the event of a no-deal exit, proceeds in an orderly manner such that the impact is within the range expected, following the company’s extensive preparations for such an eventuality.”

For the bigger companies this extra time has helped in scenario planning and preparation, which in AstraZeneca’s case has included investment in new batch testing facilities in Sweden, in parallel to existing UK sites. However, some smaller life sciences firms will still be gambling on a no-deal being ruled out, simply because they don’t have the resources to prepare such a contingency.

Article by
Andrew McConaghie

30th April 2019

From: Regulatory

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