29 Mar 2019
Posted in Pharma
May’s third deal defeat heightens concerns within the UK’s healthcare sector
Following the PM’s third consecutive defeat on the original set date of Brexit, companies within the UK healthcare sector are in angst as the future of the country remains unclear.
Gavin Davidson, Pharma Analyst at GlobalData, a leading data and analytics company, offers his views on the current events:
“With a third defeat and multiple parties calling for a general election, the UK is now sailing even further into uncharted waters, and away from a solid understanding surrounding the future of its healthcare sector. Following the relocation of the European Medicines Agency (EMA), it is imperative that companies residing in the UK receive some clarity on the environment of the industry post-Brexit.
“With current legislation pressuring the UK departing on April 12th, more and more UK-based companies are expressing concerns over the possibility of the UK reverting to World Trade Organisation (WTO) rules on trade and the introduction of the EU’s external tariffs. Additional taxes on such a large economic sector of the UK would be incredibly detrimental, especially on companies struggling with cash flow or companies that are new and attempting to expand.
“Despite uneasiness and growing uncertainty, US, EU, and UK healthcare professionals associated with UK-based companies do not anticipate staff relocation post-Brexit, according to Thematic Research conducted by GlobalData. From 149 survey participants spanning all tiers of management, approximately 79% communicated that they had not received any indication of their company relocating, nor that they anticipate a relocation regardless of the outcome of Brexit*. This opinion has remained consistent throughout 2018 (Q1-Q4), and even remained unchanged after the rejection of Theresa May’s Brexit deal on January 15, 2019.
“Albeit the consensus of survey respondents indicates companies not relocating staff, this does not stop corporate strategy having a large detrimental effect to the UK’s economy. The relocation of financial dividends is most probably due to tax purposes meaning that the UK’s benefit from company revenue will greatly reduce. This seems to be a trend across all sectors of the UK, with an estimated £1trn in assets and funds moving from the UK to EU countries due to Brexit.”