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Drug firm’s UK investment freeze will be short-term

Experts says Brexit clarity is needed to reassure industry

Adrian O'Dowd

Thursday, 01 November 2018

A decision by one of the giant pharmaceutical firms – AstraZeneca – to freeze investment in its UK operations should be short-term as long as there is clarity over the UK’s departure from the EU soon, according to experts.

GlobalData, a leading data and analytics company, has said that although it predicts AstraZeneca’s decision to put on hold any investment into UK operations will be short-term, the impact on the overall UK pharmaceutical sector remains unclear.

AstraZeneca is the second largest pharmaceutical company headquartered in the UK after GlaxoSmithKline, and reported global drug sales of over $22bn in 2017.

The pharmaceutical industry is one of the largest and most dynamic industries in the UK, meaning that any long-term freeze in investment within the UK from AstraZeneca could result in significant harm to the UK drug sector, warned GlobalData.

Thomas Moore, senior pharma analyst at GlobalData, said: “Although the investment freeze could be regarded as a sign of poor health in the short-term for the UK pharmaceutical industry, the UK government will be hoping to be able to restore the faith of pharmaceutical companies once a deal has been reached with the EU over the UK’s exit.”

AstraZeneca had indicated that the current freeze in investment would only last while there was uncertainty over Brexit, meaning this freeze in investment was likely to be short-term.

Once details of a deal were made public, it would resolve much of the uncertainty surrounding how pharmaceutical companies should expect to operate within the UK after Brexit.

Mr Moore added: “Even once a deal is reached it will still need to be approved by UK parliament before the UK leaves the EU. With the opposition Labour Party and even some in the ruling Conservative party suggesting that they plan to vote against the deal, there is a chance that Brexit uncertainty may be set to continue for a little while yet.”

In the long-term, the impact of Brexit on the pharmaceutical industry was less clear, said GlobalData whose own research had indicated that 88% of survey respondents in the pharmaceutical industry with company headquarters located in the UK did not anticipate relocation after Brexit – suggesting the majority of drug companies intended to continue operating out of the country.

Mr Moore said: “Overall sentiment of the future health of the pharma industry was not positive, with only 37% of UK and 29% of EU workers surveyed within the pharmaceutical sector saying that they expected the UK to be an attractive destination for healthcare companies to conduct research and manufacturing post-Brexit.

“The consensus is that there will be some negative impact on the UK pharmaceutical industry after Brexit, but only time will tell how severe this impact will be.”

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