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United Life Sciences explores the UK life sciences landscape following the EU Referendum outcome: What’s next for UK life sciences?

The UK has voted to leave the European Union (EU). Although this decision has caused political and economic uncertainty for the country, it also presents a new political context with opportunities for a re-energised vision for the UK life sciences sector.

United Life Sciences, formed of BIA, Bionow, BioPartner UK, One Nucleus and MediWales, will work together to ensure that policy support required from government progresses towards its ambition of becoming a third global cluster. This document includes an overview of activity prior to the vote, the reaction to the outcome, and a summary of the current political context and potential timescales. Key points set out the life sciences perspective, which must be effectively communicated to government ahead of negotiations of the UK’s exit from the EU. This work has been led by BIA with support and input from all of the United Life Sciences partners.

Recap of the position ahead of the Referendum and activity undertaken

United Life Sciences took the view that it would be beneficial for the UK to stay within the EU, noting various advantages of EU membership for regulation, the patents ecosystem, access to European funding and collaboration programmes, as well as access to the single market and talent across the EU.

Reaction to the outcome of the Referendum

On Friday 24 June, United Life Sciences shared a public statement issued by BIA in response to the vote. It highlighted the resilient and adaptive life sciences community whilst acknowledging the issues that require detailed and dispassionate thinking for the sector. The statement also underlined that many characteristics of the industry remain unchanged, such as quality of the science, strength of the UK’s R&D pipeline and commitment of long-term patient capital.

The current state of play

The wider political and economic fallout following the Referendum is still unfolding and the markets continue to respond. The Conservative party has elected a new leader, and by default, a new Prime Minister. A new cabinet has been formed including a new role of Brexit Minister. The Labour party finds itself in turmoil about its own future and leadership. The Liberal Democrats are taking a pro-EU stance. Scotland is considering how the outcome will impact on its potential independence and future in Europe. Millions of people signed a petition for a second referendum, which will be debated in the House of Commons, and the country sees a reported rise in racist and xenophobic incidents. These are unprecedented, uncertain and changing times.

However, the UK will remain within the EU until it is not. The current legal situation is no different to what it was on the day of the vote.

European Union laws will continue to apply to the UK and the UK will continue to participate in other European Union business as normal. There is no immediate change to issues such as the movement of people, access to the single market or to the UK’s participation in the harmonised regulatory regime for medicines.

Whilst there has been commentary on the process for exit, it is widely accepted that the only way forward in formalising this is for the government to trigger Article 50 of the Lisbon Treaty. This mechanism allows any Member State to notify the European Union of its withdrawal. Once this happens, there will be a two-year window to negotiate a withdrawal agreement deal. UK membership of the EU will cease either on the entry into force of a withdrawal agreement, or if no new agreement is concluded after the two-year period is up. The new Prime Minister will make the decision of when to trigger Article 50. Current thinking is that this will be before 2017 but following a debate and vote in Parliament.

What is United Life Sciences doing in response to this political environment?

United Life Sciences is supporting BIA as it works with partners on a UK EU Life Sciences Transition Programme. The group will work through issues affecting the sector and key themes will be formulated into proposals for government-led negotiation (as described in Steve Bates’ blog).

Discussions are taking place to explore which model of EU engagement and level of integration might replace the UK’s current membership. Frequently cited models include membership of the European Economic Area (the “Norwegian model”), bilateral agreements with the European Union (the “Swiss model”), a Free Trade Agreement model (the “Canadian model”) and a full break/no access agreement with the European Union (the “World Trade Organisation model”). These models offer different trade-offs between continued integration with the EU (e.g. the free movement of people, access to the single market, access to EU research funds) and autonomy for the UK to set its own policies (immigration controls and trade practices). Negotiations need to be developed to suit the UK’s specific circumstances. At this stage, it is it is inappropriate to advocate for a specific solution for the UK exit from the EU from a life sciences perspective.

United Life Sciences will set out the key areas that it intends to progress, using input from members and committees, the work of the Task Force, and the role of external advisory support. This will be used to support a comprehensive life sciences plan for the new Theresa May led government.

What opportunity can Brexit provide for life sciences?

At this time of uncertainty, demonstrating the importance of the sector and of its future in the UK is vital. We must communicate sector-specific issues affecting life sciences as well as more general issues, ensuring these are thoroughly considered with viable solutions contributing to the negotiation. We must also look for the advantages of Brexit and think creatively about what opportunities this political context offers us. The recent announcement to drop the target of a 2020 budget surplus, to pursue a target of less than a 15% level for corporation tax and to lay out a new “super competitive economy” with low business taxes and a global focus, all provide a new environment to make the case for specific policies to underpin UK life sciences.

Key points from a life sciences perspective as the UK exits the EU

1. Regulatory regime that underpins the life sciences sector

  • The effective and integrated European regulatory framework for clinical research and development of new, innovative medicines offers many benefits to the sector. These include operating to harmonised standards and enjoying access to a central authorisation process, resulting in a single market authorisation throughout the EU. Sustaining these benefits must be a key priority for the government to consider.
  • The European Medicines Agency (EMA) is located in London, which is hugely beneficial for the sector and to national regulator the Medicines and Healthcare products Regulatory Agency (MHRA). EU rules state that EU institution agencies cannot be located outside the Union’s borders. The logical conclusion is that the EMA will need to move out of London, posing a key issue for the government to consider in a negotiation, both to ensure that the EMA remains an effective agency and for the impact that change will have on the UK sector.
  • The MHRA is an excellent and widely respected regulator that has helped shape European regulation. The MHRA has led the rest of Europe in a number of scientific evaluations for medicines conducted for the EMA. Continued leadership of the MHRA and its collaborations across borders should be key concerns in negotiations.
  • The list of European regulations that underpin this sector is vast. It includes the legislative framework for the protection of animals used for scientific purposes, the regulatory framework for clinical trials, pharmacovigilance and the regulatory frameworks for orphan medicines and advanced therapy medicinal products. There are also wider European initiatives such as adaptive pathways and the PRIority Medicines (PRIME) scheme, which speed up patient access to innovative medicines. Policy makers must not underestimate the volume of issues in need of examination and analysis to ensure the best possible outcomes for the sector.

2. Intellectual property and the patents ecosystem

  • The new European unitary patent and Unified Patent Court (UPC) aim to facilitate consistent decisions in patent litigation across Europe and reduce costs by limiting litigation to a single forum. Signatories to the UPC Agreement and participating EU member states be part of a harmonised, pan-EU patent system. The UK life sciences sector and UK government have supported this, with plans for the UPC’s Central Division dealing with chemical and pharmaceutical to be based in London.
  • Following the Referendum, the UK’s ability to participate in the unitary patent, the UPC and to host the court in London are unclear. The wording of current agreements state that participation is only for EU Member States. However, legal commentators suggest there could be ways to secure continued participation outside EU membership. This issue needs careful consideration by government with sector input.
  • Supplementary Protection Certificates (SPCs) provide additional market protection for regulated medicinal products up to five years beyond the patent expiration, plus an extra six months for those that have undergone paediatric testing. They are important to the life sciences sector as they encourage innovation by compensating for the long time needed to obtain regulatory products for the sector.
  • SPCs are granted in the UK under European legislation, with a number of EU Regulations with SPC provisions, although some non-EU countries have their own versions. Without an SPC regime, the UK will be a less attractive market for medical innovations as lower revenues will result from shorter market protection periods. This will also impact on patients’ access to new medicines. This is an issue that requires serious thought from government and consultation with industry.

3. Access to EU funds and collaborative programmes

  • Various funding and collaborative schemes benefit UK life sciences companies and researchers, including Horizon 2020, the Innovative Medicines Initiative (IMI), the European Investment Fund (EIF) and European Research Council (ERC) funding.
  • The UK has been a net recipient of EU funding for its health research, accessing more funding per capita than any other country. Many companies have benefited from and engage with the Horizon 2020 scheme. The EIF is another source for venture capital investment in high-tech high-risk sectors such as life sciences. The value of schemes is not just cash but also collaboration.
  • A key priority for the government going forward is to clarify how the UK can best engage with European schemes in this new reality and offset any shortfall in funds that may arise on exit from the EU.

4. Access to talent

  • The life sciences sector is one of cross-border collaboration that also depends on world-leading talent. A multi-national workforce including EU nationals is a key feature of our sector, and access to the best minds and talents is foundation for success. Keeping and attracting Europeans to the UK is a huge part of this.
  • It is imperative that the government takes soundings from this sector to influence any change in the movement of people across Europe and how this may impact on the ability of this sector to attract the best and, by doing so, grow and scale their companies to the wider socio-economic benefit of the UK.

5. Investor confidence and the need for a globally effective UK life sciences strategy

  • UK biotech venture capital hit a record high in 2015 with £489m raised. Impressive levels of follow-on funding demonstrate a maturity in the sector with companies able to raise money and build momentum through accessing further funds as they grow.
  • The sector has matured over recent years and we are seeing welcome longer-term patient capital being invested into the UK bioscience sector.
  • It is essential that government works alongside industry and investors to show that the UK is open for business and continues to pursue an economy where innovative companies can start-up and scale-up in the UK.
  • Innovation funding schemes such as the Biomedical Catalyst are an essential foundation to allow companies to get to the stage when they can attract private capital. Given the uncertainty brought up by the EU Referendum outcome, the government must show its commitment to developing an innovative life sciences sector in the UK and recommit the Biomedical Catalyst.

The new Prime Minister must set out a clear strategy for managing the UK’s departure from the EU. She will need to articulate a vision of how the UK navigates its future.

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United Life Sciences (ULS) is a strategic partnership representing over 1240 life science and healthcare organisations across the UK and internationally. The partnership was formed by four Founding Partners: the BioIndustry Association (BIA), Bionow, BioPartner UK and One Nucleus (ON) in 2014 and MediWales joined in 2015.

The ULS collaboration has member and the wider UK life science sector at the heart of its purpose and is the basis for all joint activities. We strive to avoid duplication of effort and coordinate the founders’ activities whilst recognising each other’s areas of strength so that member companies can benefit from more effective and coherent sector support.  

UK BioIndustry Association (BIA)

The UK BioIndustry Association, the BIA, is the trade association for innovative enterprises involved in UK bioscience. Members include start-up, emerging and more established bioscience companies; pharmaceutical companies; academic, research and philanthropic organisations; and service providers to the bioscience sector. The BIA works to further the interests of members and the industry – nationally and internationally. Our heritage of innovation, enterprise and success dates back to our founding over 20 years ago. Contact BIA via their website

Bionow

Bionow is the life-sciences membership organisation for the North of England and supports business growth, competitiveness and innovation within the biomedical and life science sectors. Bionow’s membership offering focuses upon the specific needs of firms at their different stages of development, including dedicated business support programmes, shared procurement schemes with significant cost savings, exclusive insurance benefits, recruitment and training services, local and national events and access to a vibrant network of businesses. Contact Bionow via their website

BioPartner UK

BioPartner UK is the independent, accredited trade organisation that promotes international partnering for trade, investment and collaborations with UK life science enterprises. BioPartner’s UK Delegations promote the UK presence at international conferences. We work with conference organisers, in-country agencies and overseas networks to provide the best business opportunities for our members and UK companies travelling with outward delegations. BioPartner also provides access to government grants and entry fee discounts for all UK-based organisations. Contact BioPartner via their website

MediWales

MediWales is the life science network and representative body for Wales. An independent, not-for-profit organisation that is owned by its members, MediWales provides advice, support, business opportunities and promotes collaborations for the life science and health technology community in Wales. MediWales delivers an extensive events programme, including the UK HealthTech conference and the MediWales Innovation Awards and produces a number of publications including UK Lifescience Industry magazine, the Annual Directory and Review, and case study magazine, LifeStories. MediWales promotes and supports its members in Wales, across the UK and internationally. Contact Mediwales via their website

One Nucleus

Established in 1997, One Nucleus is a not-for-profit membership organisation, located in Cambridge UK. The 470 member organisations include pharmaceutical, biotech, medical device and diagnostic companies and associated technical and commercial service providers. One Nucleus’ mission is to maximise the global competitiveness of its members. For science and technology-based members, that means them being global leaders in the research, development and commercialisation of healthcare innovations that radically improve the quality of people’s lives around the world. For business and professional services members, it means them delivering exceptional services that significantly enhance the business performance of their clients. Contact One Nucleus via their website