It’s Brexit day – now comes the really hard stuff

Months of trade negotiations between UK and EU lie ahead

After more than three years of often acrimonious politicking, the UK will finally leave the EU at 23:00 GMT this evening, but that’s by no means the end of the matter.

The withdrawal agreement was ratified this week, unamended from its latest iteration thanks to the government’s 80-strong majority, and passed an EU Parliament vote on Wednesday, prompting both celebrations and gloom alike among MEPs.

Now comes the much harder part: months of negotiations between the UK government and EU on the terms of a free trade agreement – plus horse-trading on other issues like regulatory alignment, security and citizens’ rights.

That will determine whether or not medicines and devices regulation will stay aligned after a transition period due to end on 30 December.

At the same time, negotiations can now start in earnest between the UK and other countries around the world on other trade deals, something that was impossible while it remained a member of the EU.

Some of the potential timepoints to look out for in the coming months. Negotiations can’t take place until the UK and EU have both agreed their mandates – expected as early as next week for the former and in the next few weeks for the latter – and there’s a deadline of 1 July for an EU decision over any request to extend the transition period.

Prime Minister Boris Johnson has been adamant that no extension will be needed, a position reiterated by Dr Anusha Panjwani of the UK Office of Life Sciences (OLS) during a webinar run by UK trade body the BioIndustry Association (BIA) yesterday.

There’s deep scepticism that a deal can be done in the timeframe, however, particularly as the time needed to ratify an agreement means that it will likely have to be completed in draft form at least ahead of the final quarter of the year.

The government’s stated position is as follows: keeping the UK out of the single market and any form of customs union, and ending any deference to the European Court of Justice. Failure to agree a deal would of course leave the spectre of a no-deal exit from the bloc on the table, something the industry wants to avoid at all costs.

From 1 January , 2021 “the way you trade with the EU will change, and you’ll need to prepare for life outside the EU, including new customs arrangements,” said Panjwani, adding that government will be providing guidance on how things will change in the coming months.

Michael Warren, who covers Brexit and trade issues for the BIA, said that there’s been no change to the industry position on the negotiation phase for the trade deal.

It wants “the closest alignment possible” between the UK and EU on medicine and medical device regulations, and for the Medicines and Healthcare products Regulatory Agency (MHRA) to remain part of the EU system for regulation.

Warren said he has been encouraged by recent government minister comments, including from Health Secretary Matt Hancock who said the intention is to maintain mutual recognition of products produced in the UK and the EU.

Meanwhile, a European Parliament committee called last week for 'targeted actions' to ensure the continuing supply of drugs and medical devices after Brexit, recognising that the EU27 also has a lot to lose if the sector is disrupted.

MHRA is also working on guidance for the industry to help navigate the transition period, said Panjwani, and this is expected to be issued “very shortly”.

She also said that from a life sciences perspective the US, Japan and Australia are among the top countries for those negotiations, and the aim for OLS is to deliver on “making the UK the leading global hub for life sciences after Brexit.”

It’s worth noting that despite the disruption caused by the build-up to Brexit, the UK’s biopharma sector enjoyed one of its most successful years in 2019. UK biotech’s raised £1.3bn in financing, the third best year for the sector behind 2018 and 2015, and a 400% improvement on 2012., though it did show a 40% reduction in 2018.

The sector’s future prospects nevertheless rely heavily on positive negotiations between the UK and the EU and a pragmatic agreement that avoids damaging biopharma industry interests on both sides, and risking the wellbeing of patients across Europe.