Brexit and the EU referendum: The future of business and pharma after the vote to stay or leave the European Union.

1. And the future of business
BREXIT?
Mathew Shearman, Senior Account Manager at Ogilvy Healthworld
James Stewart, Associate Director at Ogilvy Public Relations
The EU referendum

2. Worker
conditions
WHAT IS THE UK ACTUALLY VOTING ON?
ECONOMIC
UNION
POLITICAL
UNION
SOCIAL
CHAPTER
Single market,
not the Euro
28 member
states

3. Council of EU:
28 relevant ministers
– 1 from each country
Also review law
EU Commission:
28 members 1 appointed
by each country
They initiate law
They debate together
EU Parliament:
751 elected MEPs
– the UK has 73
Scrutinise and debate law
Debate again
No law
Law is passed
AGREE?
AGREE? AGREE?
no
yes
yes
no
no
yes
yes
THE MAKING OF LAW IN THE EUROPEAN UNION

4. 7 DAYS TO GO
BGM; ComRes; ICM; Ipsos; MORI; Survaion; TNS; YouGov (polls of >900 adults only)
43%
42%
12%
58%
32%
9%
22%
60%
13%
LEAVE REMAIN DON’T KNOW
A GENERATIONAL DIVIDE
60 years + 18-24 years

5. THE BREXIT PROCESS
ARTICLE 50
24th June - Autumn
2016(?)
RENEGOTIATION
2016-2018
Specific trade deals
Contribution to EU budget
NEW RELATIONSHIP
??

6. BREXIT ON BUSINESS

7. SINGLE MARKET
The impact on the UK economy will depend on changes to access
to the single market or new free trade deals.
• THE SINGLE MARKET removes barriers to trade and investment within
the European Union
• THE EUROPEAN MARKET is declining and trade deals such with India
may be more quickly formed
• Different assumptions:
• Anticipated drop in £, economic growth between 3% and 6% lower
• Boost from regulatory burden – 1.6% GDP?
• Maintain the single market with legal harmonisation and EU budget
contribution?

8. CURRENT TRADE RELATIONS
The UK export locations (not including services):

9. FOCUS ON LIFE SCIENCES
A UK priority area

11. A BASE FOR BRANDS IN LIFE SCIENCES

12. A LIFE SCIENCES PERSPECTIVE
EFPIA says that as part of the EU, UK pharmaceutical
companies can continue to benefit from:
EU Marketplace Pan-European
R&D collaboration
EU advocacy on
global trade issues
Harmonised
regulatory
environment

13. LIFE SCIENCES IN THE UK
The UK is a high exporter & importer of pharmaceuticals:
$34.5 billion
$34.7 billion
EUUK

14. 400
0
-400
-800
-1,200
-1,600
-2,000
2
0
-2
-4
-6
-8
-10
DRUG SPENDING DECLINE FORECASTED
Following a projected dip in GDP, pharmaceutical sales
to the NHS would decline:
Figure 2: Change in forecast pharmaceutical sales, UK
Change in pharma sales, Brexit scenario
compared to baseline (£m); left scale
% change vs non Brexit
scenario; right scale
Source: The Economist Intelligence Unit forecasts
2015 2016 2017 2018 2019 2020
259
-1,223
-1,707 -1,664
-3982016
Pharmaceutical
sales: £18.7 bn

15. THE SINGLE MARKETING AUTHORISATION
The UK currently has a role on the Committee for Medicinal
Products for Human Use (CHMP)
For medical devices, the CE mark gives access to the UK market
Pricing of treatments is a national responsibility – NICE plays a
role on the European Network for HTA (EUnetHTA)
Potential impact on domestic drug access and
launch sequencing
HARMONISED
REGULATORY
ENVIRONMENT

16. CLINICAL TRIALS: FROM INVESTMENT TO ACCESS
The UK is currently the top country for phase 1 trials, 2nd for
phase 2 trials
The UK receives the second highest financial contribution from
Horizon 2020 – EU research funding
EU public/private partnerships, such as the Innovative
Medicines Initiative (IMI), ensure collaboration across borders
Regulatory burden shift for companies with UK-specific
protocol?
PAN-EUROPEAN
R&D COLLABORATION

17. WHAT WILL HAPPEN AFTER THE REFERENDUM?
And how should business respond?

18. What will happen after brexit?
NOBODY KNOWS

19. BUT… WE CAN ASSUME
There will be a period of
TURBULENCE while the
political and business
environment come to terms
with the result
• The British financial markets
will drop and the pound will
fall in value
• David Cameron will resign –
Boris Johnson would be
favourite to replace him
• Significant pressure will grow
for Scottish independence
Britain will be forced to
RENEGOTIATE its
RELATIONSHIP WITH THE EU
• Will the UK join the single
market? Will the EU let the
UK join?
• How will the EU react to
Britain negotiating trade
deals having left?
The British government will
have to establish how it
REPLACES ROLE the EU
plays in the UK e.g. research
fund like the Horizon 2020
There will be CHANGES to
travel and working rights
for EU CITIZENS in the UK

20. HOW SHOULD BUSINESS RESPOND?
Businesses will be UNDER
PRESSURE to assess the
IMPACT OF BREXIT and make
business decisions on this
information:
• Vital to monitor the political
environment immediately
after the result
Likely to be a spate of
COMPANIES ANNOUNCING
CHANGES TO BRITISH
OPERATIONS:
• Many listed companies will
announce plans in Q2
reports
• Narrative likely to develop
about businesses /
investment drying up
Risk that companies seen to
rush out will be subject to
CUSTOMER/GOVERNMENTAL
IMPACT
Opportunities for
CORPORATES TO INFLUENCE
GOVERNMENT
AGENDA/BREXIT
NEGOTIATIONS
if done carefully
Don’t only worry about
your British business
– the EU WILL BE FACING ITS
BIGGEST CRISIS YET

21. BUT EVEN WITH A REMAIN VOTE THERE WILL STILL BE CHANGES
The POLITICAL DYNAMICS in the UK will
have CHANGED:
• Conservative Party divisions
• UKIP increasingly able to attract former
Labour voters
Britain will RESIST FURTHER EU CENTRALISATION
and may VETO NEW MEMBERS JOINING
Likely to be A REFERENDUM ON ANY FURTHER
EU TREATIES

22. WANT TO HEAR MORE ABOUT
POLITICS IN BUSINESS?
MATHEW SHEARMAN
Senior Account Manager
Ogilvy Healthworld
mathew.shearman@ogilvy.com
JAMES STEWART
Associate Director
Ogilvy Public Relations
james.stewart@ogilvy.com