You are here:
25 July 2018

LifeScienceBit: Brexit’s impact on Life Sciences

The Brexit plans have led to the resignation of two leading secretaries David Davies and Boris Johnson and the appointment foreign secretary Jeremy Hunt.

Extension of the wage withholding tax exemption for scientific research personnel

The recent developments in the Brexit plans of the United Kingdom (UK) have led to the resignation of two leading secretaries David Davies and Boris Johnson and the appointment foreign secretary Jeremy Hunt, the former health secretary of the UK. Depending on the eventual agreements between the UK and the European Union (EU), the proposed plans for the Brexit have also an impact on the Life Sciences sector.

The UK is a global leader in scientific research and its commercialisation, and the life sciences sector is a cornerstone of the national public health sector. However, the Brexit will have potential implications for the sector. We have listed some important ones in bullet points below:

  • The European Medicines Agency (EMA) will relocate to Amsterdam in the Netherlands as a consequence of the UK’s withdrawal from the EU.
  • Disruption of an important trade flow of medicines, due to extra costs and increases in lead times for companies that use the UK and European manufacturing in their supply chain. This could lead to (temporary) medicine shortages;
  • UK-pharmaceuticals will be treated as third-country imports, which need more testing than the pharmaceuticals that are traded within the European Economic Area (“EEA”). Establishing laboratories for these additional testing will bring extra costs which will make the UK-EU supply chain less attractive. This could also lead to withdrawal of products at both markets;
  • Issues regarding EU marketing authorisations. If the UK decides to leave the EEA, the existing authorisations that are held by British entities have to be transferred to an EEA entity. This increased demand on the Medicines and Healthcare Regulatory Agency (“MHRA”), increases the administrative burden and will slow down the authorisation process;
  • Denial of access to Europe’s Unified Patent Court (“UPC”), which complicates the process of receiving patents and potentially leads to more costly patent disputes with other companies;
  • Implications for professionals in the Life Sciences industry, because of the rights after the Brexit for EU nationals living in the UK and vice-versa.
  • Despite of the ongoing investments of pharma companies – as stated before, the UK may lose access to EU funds which could ultimately lead to reduced venture capital investments.

As the recent Brexit-developments imply a more chaotic Brexit, it is recommended to consider the opportunities as well as the implications for your company. If you are interested in setting up your business in the Netherlands please refer to this special bidbook for the biopharmaceutical industry to read all about the advantages of setting up your business in the Netherlands.

Should you have queries, please contact Aurélie Mingels or your trusted Loyens & Loeff adviser.

Follow our Showcase Page on LinkedIn for updates and more Life Sciences Bits.