Pharma giant AstraZeneca has said it will be freezing investment in its UK operations until greater clarity is provided over the outcome of Brexit.
AstraZeneca is the second largest pharmaceutical company headquartered in the UK after GlaxoSmithKline and last year reported global drug sales of over $22 billion.
The pharmaceutical industry is one of the largest and most dynamic industries in the UK; therefore, any long-term freeze in investment within the UK from AstraZeneca could result in significant harm to the UK pharmaceutical sector, according to 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 has indicated that the current freeze in investment will last only while there was uncertainty over Brexit, meaning this freeze in investment is likely to be short-term. Once details of a deal are made public, it will resolve much of the uncertainty surrounding how pharmaceutical companies should expect to operate within the UK after Brexit.
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 is less clear. GlobalData’s research indicates that 88% of survey respondents in the pharmaceutical industry with company headquarters located in the UK do not anticipate relocation after Brexit, suggesting that most pharma companies intend to continue operating out of the country.
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.”