Brexit has greatly affected British biopharma companies, from causing regulatory and supply chain difficulties to creating uncertainty over investments and research funding to even the biggest global pharmaceutical companies like AstraZeneca.
In 2020, the European Medicines Agency (EMA) moved their headquarters from London to Amsterdam, as a direct result of Brexit.¹ This was significant as it meant that the UK was no longer the centre of EU regulatory policy. The departure continues to shape how UK-based biopharma companies operate today. Now, companies need to receive an authorisation from both the EMA and the MHRA, which is the Medicines and Healthcare Regulatory Agency in the UK. This increases time for approvals and administrative cost, however companies can prioritise markets based on speed of approval and regulatory ease. They can ask for initial approval in the UK or EU depending on where they anticipate the highest demand and fastest approval, and delay the launch in the other market. An example of this is when AstraZeneca prioritised the UK market over the EU during the rollout of its COVID-19 vaccine. This was due to the British government’s active involvement in thte vaccine’s development and manufacturing process, and the contract signed between AstraZeneca and the government for there to be a separate British supply chain for the vaccine.²
Due to the two separate regulatory systems of the EU and UK, biopharma companies now shift their focus on regions where regulatory approval is less fragmented, and prioritise market access in the US and Asia instead. In July this year, AstraZeneca announced plans to invest an enormous $50 billion in America for medicines manufacturing, and plans to generate 50% of its revenue from the US by 2030.³
One of the few positive outcomes from Brexit is the International Recognition Procedure (IRP), which was introduced in 2024⁴. The IRP allows for the MHRA in the UK to immediately recognise decisions from international regulators such as the FDA, and Japanese PMDA. This allows for faster UK market access and greater market share for all biopharma companies. It will also allow for the UK market to remain competitive and attract investment.
This year, drug shortages have occurred due to trade barriers because of Brexit, with epilepsy and cystic fibrosis medications being almost impossible to get hold of.⁵ Companies’ whose portfolios consisted mostly of generic medicine were negatively affected, whereas large companies with diverse portfolios, such as GSK, experienced negligible financial impact.
However, Brexit has significantly harmed development and investment in biopharma companies. In this year alone, AstraZeneca has scrapped a £200m research lab expansion in Cambridge, and a £450m investment project in Liverpool that would expand its vaccine site. Merck, a German pharmaceutical company that is one of the largest worldwide, cancelled its £1bn research property in London this September, and has even announced it is discontinuing all research activities in the UK.⁶ Brexit has caused UK to become a smaller, separate market, so it has now clearly become a lower-priority market for companies to invest in manufacturing expansions and launch new innovative products.