14 November 2017
With negotiations currently stalled, and little progress made, the industry is gearing up for what’s become known as a “hard Brexit”. This would involve the UK leaving the EU without an agreement on future trade and other relationships. In this scenario, the UK becomes a "third country" and from this position must negotiate a new arrangement with the EU 27 and other countries.
The implications of this are incredibly difficult to predict, as we’d be in unchartered territory. However, the UK government wishes for the Pharmaceutical sector to negotiate a "bespoke" arrangement, in which the UK has a series of mutual recognised agreements and establishes a close cooperative model. This solution would mean that not much changes from the way things are today, but that the final decisions and authorisations are made by the UK and not by the EU Commission.
This wish was set out by the UK government in a letter issued in July 2017 by Greg Clarke and Jeremy Hunt. This position is strongly supported by industry, however, should this not work then the UK would seek to set up its own system, perhaps collaborating with countries such as Switzerland, Australia and Canada.
"There will be a whole series of what we call ‘day one issues’ that must be resolved on the day that the UK leaves the European Union. At that time, the EU 27 will continue to operate as at present, whilst the UK will transition to UK national licenses. For example, the UK will no longer be a Reference Member State or a Rapporteur. All of those factors will have to be taken into consideration.”
David Jefferys, Senior Vice President, Eisai Europe, Chairman of the ABPI and Efpia Regulatory Committees
So, what does this mean when it comes to staffing and resourcing?
Well this is (quite literally) the billion-pound question! One thing we can be certain of right now, is that companies manufacturing in the UK must either:
- establish new testing facilities in an EU 27 Member State;
- move manufacturing facilities;
- or recruit a new qualified person.
Regulatory Affairs will likely be affected the greatest, with companies having to transfer authorisation for centralised products, when the licence is held by a UK company, to EU 27 Member States. Centralised EU licences will eventually need to be converted to UK licenses again contributing to short to medium term projects.
Additionally, the national agencies and the EMA are likely to be recruiting. The national agencies will want to fill the gap left by the UK MHRA leaving the network, and the EMA will be looking to hire because it will lose staff from its move.
How will it affect the contract market?
More opportunities in Europe: The uncertainty that Brexit has caused will generate further contracting opportunities, as companies are reluctant to make big hiring commitments whilst the future is still unknown.
But fewer opportunities in the UK: With many companies moving their operations to EU 27 member states, there will be a loss of jobs and decreased employment opportunities in the UK.
Higher rates: The changes in £ to € exchange rates have led to UK contractors working in Europe experiencing 8% rate increase over the past six months, and this looks likely to continue.
Yet there are still many unanswered questions, such as:
- Will UK contractors be able to contract in Europe?
- Will visas be required to travel and work in Europe?
- Will the 183-day ruling be effective and will Ltd Contractors be able to operate outside of the UK?
- Will tax levies still apply to UK citizens?
- Is there sufficient skilled labour to satisfy contract opportunities in the EU without utilising UK Contractors?
Answers to these questions will no doubt become clearer as we move closer to the March 2019 deadline, and negotiations are made.
In the meantime, here are my three top tips for contractors wanting to navigate their way through Brexit:
- If you intend to work in Europe after Brexit, gain mainland European experience now whilst the “doors are open”. This will become really beneficial in the long run.
- Be prepared to work via a payroll solution where tax and social contributions are paid into the host country rather than a Ltd arrangement.
- Ask your current employer (and any potential employers) about their plans to manage the fall out of Brexit and access how this will impact you specifically. No matter what type of agreement is eventually settled upon, the employers who will come out of Brexit on top are those that are planning ahead.
What are your thoughts? I’d be keen to hear any other opinions on what the impact of Brexit will be on the life sciences industry.
Or if you’d like to have a confidential discussion about what’s next for you, please feel free to get in touch!
Managing Consultant, Life Sciences
T: +44(0)20 7002 0117