Is your business prepared for Brexit?

The UK left the European Union on 31 January 2020. We know that the uncertainty around Brexit has made it difficult to know how to prepare, but our expert team will help you to put practical steps in place to make sure your business is ready during the commencing transitional period.

Our team of Brexit advisors offer in-depth analysis on the political, policy and legal implications of Brexit and how it will affect your business.

We specialise in a wide range of sectors and can help to answer big questions about Brexit and the preparations businesses should make, including:

  • What your business should do in the event of a no-deal Brexit?
  • How will the transitional period between Brexit and the entry into new UK-EU trade agreements affect you?
  • How will any long-term new trade agreements affect you?
  • What contingency plans will you need in place for each potential Brexit Scenario?

Our team of advisors can provide bespoke assessments of your business, including:

  • Assessing how your business could be affected by Brexit
  • Providing personalised practical plans to ensure your business is ready

We've also developed FBCMB sector specific regional tube maps, where you see the potential threats and issues which will affect your business. The 'lines' include international standards, EU rules, opportunities, people and trade. On each step of this journey you will need advice and our team are on hand to provide it.

It is already clear, that you or those you supply are not going to enjoy the same access to the EU's Single Market under a trade agreement as you did while the UK was a member of the EU.

The main threat you face is uncertainty about the outcome. Nonetheless, you need to assess the impact of a worst-case-scenario Brexit now and have in place contingency plans which are flexible enough to respond to developments in the negotiations.

Our team can help you with all that you need in four steps:

  1. Information - You need to have procedures in place to ensure you are well-informed about the Brexit process. Relying on press reports won’t be enough. Understanding and forecasting the likely impacts are fundamental to your Brexit strategy to gaining early competitive advantage. FBC Manby Bowdler will give you with a tailored service which monitors progress, analyses published documents, and identifies the impacts for your business the moment they become clear.

  2. Preparation - Prepare for Brexit with and without a deal. To do so, businesses should carry out a Brexit legal impact assessment followed by a Brexit commercial impact assessment. These will form the baseline of any contingency measures. 

  3. Action - You should decide what contingency plans you need and when they should be activated. You might be marginally or massively impacted. Contingency measures could include setting up alternative supply chains, identifying new customer markets, or re-skilling employees. FBC Manby Bowdler has been at the forefront of advising clients on the commercial implications of Brexit. We have the experience to help you devise and implement contingency measures for your business, and stress-test them against a range of Brexit scenarios, whatever industry you operate in.

  4. Influencing - The best way to avoid a Brexit that damages your business is to influence the outcome yourself. Brexit provides an opportunity to do that, which businesses should exploit more. FBC Manby Bowdler has the benefit of advisers in Brussels and London. We can devise and implement policy advocacy strategies to influence the course of further Brexit negotiations, the negotiations on a new trade agreement and build long-term regulatory compliance strategies, including relationship-building with key influencers and government authorities.

Our team of experienced sector specialists has examined the potential impact of Brexit in your sector and can provide an in-depth analysis on the political, policy and legal implications of Brexit, and translate what they mean for manufacturing, agricultural and hospitality clients. We have an expert understanding of how each piece of the jigsaw of EU policy and legislation fits together, an insider’s knowledge of the political and administrative processes of the negotiations, and considerable experience of how UK legislation is enacted. 

Brexit and Drugs: Will you be able to get them?

07/05/2019

Medicines play a vital role in maintaining the health and wellbeing of many people in the UK but will patients still be able to get the drugs they need as a result of Brexit? FBC Manby Bowdler Brexit Director Peter Wilding takes a look at some of the implications.

For patients with long-term conditions such as diabetes, asthma, blood pressure, heart problems and cancer to those people suffering daily ailments such as skin problems, medicines play a vital role in maintaining health and wellbeing. 

It’s taken for granted by many that they will be able to get their medicines when they need them.

More than one billion items are dispensed annually through community pharmacies. According to a recent white paper published by the UK's Business, Energy and Industrial Strategy Committee, 73 per cent of pharmaceutical imports in the UK come from the EU. 

This equates to around 37 million packets of medicines every month from the EU worth £18.3 billion.

Brexit 

But this is at risk as a result of Brexit. The EU has an agreement with the World Trade Organisation (WTO) that all its members are treated as one body and, as a result, medicines can currently be moved freely between any EU member states without border checks or tariffs.

In the event of a no deal, however, the UK would become an individual state within the WTO and would then have to establish its own trading relationship, which could take time and end up costing money. 

This is because medicine supply is an international business relying on the EU's single market's free movement of goods and compliance regimes. 

Ingredients are sourced in India and the Far East under EU agreements. These are transported to mostly EU manufacturing plants that turn them into EU authorised pills and potions. With no tariffs or regulatory friction between the EU and the UK, they are then sent to UK wholesalers who then distribute them to pharmacies and hospitals.  

This is a just-in-time production line. Especially for medicines with short shelf lives, such as lifesaving EpiPens needed for those with severe allergies or those with special requirements, such as insulin, which needs to be kept at between 2C and 8C at all times. 

The Business, Energy and Industrial Strategy Committee white paper pointed out that a “significant challenge” would be met with any “time or temperature-sensitive products delayed at the border at risk of not reaching their destinations in a condition to be of benefit to patients. 

“Additional costs and requirements for the processing of customs procedures will, as with tariff costs, either burden businesses or the NHS,” it said.

The single market and the customs union make the pharmaceutical supply industry work. So any change has the potential to create major problems. Delays at ports, increased costs and legal or regulatory differences will all affect the price and availability of prescription drugs.

Already, getting these drugs might suffer from ingredient contamination at source, EU quality control failure in production or degradation during transport. Any of these kinds of problems can lead to a delay in supply, and subsequent shortages of particular medicines. 

When this happens, as it does occasionally, the pharmacist will seek an alternative or deny the patient. But by adding tariffs and compliance red-tape into the mix, Brexit will turbo-charge these issues. NHS Providers has already warned that some NHS trusts had seen shortages of up to 160 different drugs in the past six weeks as opposed to just 25 to 30 drugs in normal times.

Price increases

Even today, unexpected increases in the prices of certain generic drugs meant NHS concessionary spending on drugs was £315 million in 2017/18, compared to £46 million in the previous financial year. 

Tariffs mean more price increases. That's not to say that there have been no efforts to remove tariffs from the medicinal trade. The EU is signed up to the Pharmaceutical Tariff Elimination Agreement which takes away customs charges on certain medicines. 

But this list has not been updated since 2010 and pharma companies have estimated that, as a result, up to 1,000 finished products and 700 ingredients are not currently included in the list and would therefore be subject to tariffs when traded on WTO terms. This will result in delay and, whilst they remain off the list, they will be considerably more costly.

This would be unlikely to impact people with ongoing prescriptions for drugs that have not been released in the past ten years, but could mean that some patients are denied access to new medicine because of the additional costs it would incur on the NHS. 

Red tape

The approval regime for hundreds of prescription drugs is meticulous and there would need to be careful planning to ensure that UK health services are not suddenly facing shortages. 

According to a recent survey from the European Medicines Agency (EMA) – the scientific body which coordinates and streamlines the development of new drugs across the EU - more than 100 medical products could face supply problems if changes are not made to their marketing authorisations in time for Brexit.

In the event of a no deal, the Government would be unable to negotiate a new agreement with the EMA, a system designed to save time and money by eliminating the need for pharma companies and drug developers to pass regulation in every individual country in the EU. Drugs that are designed to treat cancer and rare diseases are generally manufactured using this central approval route.

So by leaving the EMA with a no deal Brexit the UK risks facing higher costs for the introduction of new medicines due to the new process not being streamlined. The Business, Energy and Industrial Strategy Committee said that if the UK crashed out without a deal applications new medicines would need to be submitted to the EU and the British regulator, the MHRA. 

This is because the UK will no longer be part of the single market and the customs union. Because pharmaceutical companies are required to do business within the EU regulatory regime to market their medicines, they will have to transfer their licence to an EU Member State after Brexit to comply with EU law and therefore be able to continue supplying the EU market with their medicines. 

If a company does not transfer relevant operations from the UK to one of the remaining EU Member States in time before the UK leaves the EU, the company may no longer be able to put the medicine on the market leading to more cost and delay.

Solutions

So what are the solutions? 

1. Finding UK drug manufacturing capacity is a challenge and current production is limited. Insulin supply is a particular problem. Increasing capacity would take time to get UK approval for high-quality, safe medicines. However, in some areas, such as blood and blood components, the UK is largely self-sufficient in and does not routinely export or import these products, except for relatively small quantities of plasma which are imported by NHS Blood and Transplant. But, for prescription drugs, the UK is a net importer. 

2. Stockpiling is an option but finding storage capacity is a challenge. There are simply not enough dedicated, sensitive UK facilities to do so.

3. Borrowing money to pay for the medicines. A 3 month stockpile costs £4.5bn. Which is a problem as pharmacies don’t get paid until the medicines are dispensed? 
Conclusion

If Theresa May's Withdrawal Agreement and its associated legislation pass the House of Commons then prescription drugs would flow freely as now until December 31st 2020, the end of the so-called transition period. After that, the transition can be extended by a year if, by then, no UK-EU free trade agreement is signed. 

However, it is unlikely that the PM's solution will be agreed. Therefore, if no alternative agreement or extension is in place by October 31st 2019, the UK will inevitably be forced to accept a hard Brexit leading to more cost, more delay and less choice for patients in the receipt of prescription drugs. 

If you would like to contact Peter or the rest of the team to discuss any of the above please call 01694 724440, 07901 008220 or email p.wilding@fbcmb.co.uk.

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