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U.K. chemistry enterprise feels ‘Brexit’ pain

U.K. pharma, chemical organizations, scientists pushed to where they don’t want to go

by Alex Scott
June 24, 2016

Credit: AP
U.K. Prime Minister David Cameron will step down in the fall, adding to the uncertainty caused by the Brexit.
A photo of UK Prime Minister David.
Credit: AP
U.K. Prime Minister David Cameron will step down in the fall, adding to the uncertainty caused by the Brexit.

Yesterday’s historic vote by the people of Britain to exit-or Brexit-the European Union is likely to trigger a series of adverse consequences for the chemistry enterprise.

The expectation among many U.K. chemical and pharmaceutical firms and scientists is that economic conditions will get tougher, exports of the products of chemistry will drop, several European pharmaceutical institutions will relocate to other EU countries, and U.K. scientists’ ability to collaborate with their EU colleagues will get harder.

“The U.K.’s decision to leave the EU is likely to have a significant impact on science in this country,” says Venkatraman Ramakrishnan, president of the Royal Society, the U.K.’s national science academy. The society is concerned about three key issues: EU funding of science, the ability of people from the EU to work in the U.K., and international scientific collaboration.

“In negotiating a new relationship with the EU, we must ensure that we do not put unnecessary barriers in place that will inhibit collaborations,” Ramakrishnan urges.

U.K. pharmaceutical and chemical industry organizations called on the U.K. government to do what it can to reduce the uncertainty imposed on their sectors as the country starts the process of extricating itself from the EU. But with U.K. Prime Minister David Cameron announcing on Friday that he will step down by the fall, government policy looks anything but certain.

Steve Elliott, head of the Chemical Industries Association, the U.K.’s largest chemical sector association, is putting a good face on the vote. “Whilst business craves certainty, it is also used to operating in challenging and changing circumstances,” he says.

The German Chemical Industry Association, VCI, is harsher in its reaction, calling the Brexit a blow not just to the U.K. industry but to the wider EU economy. Marijn Dekkers, president of VCI and former chairman of Bayer, suggests that the move will cause “severe economic and political damage” across the EU.

“I very much deplore that the British voters decided yesterday to leave the EU. Especially now, at a time of timid economic recovery in Europe,” Dekkers says.

In the U.K., the adverse impact of the Brexit on the pharmaceuticals sector will be instant, points out Mike Thompson, CEO of the Association of the British Pharma Industry. “This creates immediate challenges for future investment, research, and jobs in our industry in the U.K.,” he says. Among other issues, the Brexit raises questions about how drugs will be regulated in the U.K.

“My biggest concern is about how we get to a consensus in presenting the U.K. as an attractive place for continuing to research and develop medicines to the global CEOs who clearly have alternative choices to hand,” Thompson says.

Thompson is resigned to the fact that the London-headquartered European Medicines Agency, Europe’s equivalent of the FDA, with a staff of 600, will relocate to an EU country. “It’s just going to go,” he says.

Even before the referendum, Sweden, Denmark, and Italy were clamoring to have EMA relocate to their countries. A handful of other U.K.-based EU institutions, albeit smaller ones, also may relocate.

Steve Bates, CEO of the U.K.’s Bioindustry Association, a biotech trade group, also laments the result of the U.K. referendum. “This is not the outcome that the Bioindustry Association wanted. Several key issues for our sector are now in flux,” he says. “Key questions about the regulation of medicine, access to the single market and talent, intellectual property, and the precise nature of the future relationship of the U.K. with Europe are now upon us.”


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