EMIG• 260+ Member companies & organisations

• 90% Members represented only by EMIG

• EMIG represents c. 50% of UK branded volume*

• 80% – Alliance, Almirall, Dermal, EUSA

• 10% – Allergan, Astellas, Gilead, Takeda, Teva

• 10% – Dompé, Santhera, Spark Therapeutics, Zogenix

*(Ref: IMS BPI)

EMIG – ecosystem…

Patientcharities• Cancer52,MyelomaUK,NationalVoices,AKUSociety

ResearchPolicy• SocietyofBiology,TheAMS,AMRC,UUK

Universities/researchinstitutes• deMontfort,Imperial,ICR,King’s,Manchester,Oxford,Plymouth,QMUL,Southampton,UCL

EUConfederationofPharmaceuticalEntrepreneurs(EUCOPE)

‘Ethical’ in EMIG = One company, one vote

Equal say in shaping policy!

UK Biopharma –Adapting to a changing landscape to deliver a better global future

Mindset

• UK electorate voted to leave the EU

• Manage immigration – not stop it

• Shape our own future

• ‘Brexit means Brexit’

• EU needs the UK for essential skills and resources

• UK wants to do business with the EU

• …and significant others

A comprehensive, joined-up industrial strategy for the life sciences

Create new global opportunities to benefit healthcare and patients

Significant, dedicated champion to deliver it:

Senior Minister with PM support

Scenarios

European Economic Area (EEA) membership

• UK’srelationshipwillmostcloselyresemblethestatusquo

• UKwouldcomplywithvirtuallyallEUmembershiprequirements

• And wouldmaintainaccesstothesinglemarket

European Free Trade Association

(EFTA) membership

Total Brexit

• UKwouldhavelimitedaccesstothesinglemarket

• But havegreaterflexibilitytodetermineitsowntradingrules

• UKwouldhavemaxflexibilitytodetermineitsowntradingrules

• But wouldbedeniedaccesstothesinglemarket

“If the UK Government chooses a looser arrangement with the EU than EEA or EFTA membership….....

…there are enormous opportunities that must be explored…

...the pharmaceutical industry must contribute now in a positive way to the Government’s thinking in this area.”

Challenges

UncertaintyCertainty

Key areas considered as part of a negotiation:

1. Access to the EU regulatory framework/single market2. Rules on the collection and use of data3. The confidentiality of medicines prices4. Tariffs5. Tax and spend policies

What might change in the process of withdrawal

Potential scale of change is significant

OpportunitiesUK Market Attractiveness

3% Global Market

Price referenced by 55% Global Markets

60% NICE TAGs

- PAS

NCE > USA & Germany

Launches

NCE > EUSpecialty Launches

Except France & Germany

3rd Global HQs

Joint GermanyAfter USA & Japan

Top 5 Life Science Industry

& R&D Headcount

No.1 HTA &

Data ScienceAnalysis of RWE

NHS

OpportunitiesFunding New Medicines

• New Medicines Fund for England

• PPRS – £3bn rebates

• Wales £80m

• Scotland £90m

• Next PPRS

• Investment in medicines growth

• Reinstatement of the Taper at a higher level

• New payment models

Opportunities

• Protect value of NICE Guidance• Charge for TAs – company affordability• NHS – affordability• Companies pay – NHS adoption

Parallel Trade• Bad for pharma – in either direction• Exempt from ‘Measured Spend’ • ‘Measured Spend’ flat – NHS 7% é• Exchange Rates?• Sales é• Rebatesé

OpportunitiesTaxation

• On Brexit, UK can set duty rate for imports• BUT retain current 0% duty rates for pharmaceutical

products • Documentation

• Must not become burdensome• Move to duty free for API

• Currently 6.5%• Maintain duty reliefs

• Imports for Clinical Testing and inward processing

OpportunitiesVAT & Healthcare

• UK VAT based on the EU VAT Directives • A significant impact on cross border trading? • System changes – prefer VAT system as currently operated• Import VAT will be payable on all non-UK sourced

products – cash flow cost• VAT charged on sales to NHS Trusts, private hospitals• Reduced rates to healthcare certain products

OpportunitiesOther Taxes

Corporation Tax

• Maintain the most competitive tax system in the G20

• Reduce to 10%

R&D Tax Credit Patent Box

• Increase headline rate from 33%

• Remove project cap on SME R&D relief

• Remove restriction on grant funding

• Lower corporation tax diminishes relative benefit

• Reduce Rate

• Make the UK even more attractive to global investment

• Use the PPRS to invest not to cut

• Fund the NHS to innovate

• Make the UK stronger – forget the status quo

OpportunitiesUK Market Attractiveness

AssuringtheInterestsoftheUKinGlobalPharmaceuticals– WhatroledoestheEUplay?

• UKpharmaceuticalindustryincontext:• Safeandeffectivemedicines• Returnonhigh-riskinvestments• Patientexpectationescalating– healthcaresystems’budgetsareshrinking• WorkwithGovernmenttominimisetherisksofexitingtheEU

• Pharmadistinctfrommostotherindustries:• Stringentregulationsforthedevelopmentandapprovalofmedicines• Perceptionofindustrysincemedicinesarepaidforbypubliclyfundedbodies• UKleavingEU– riskseenasonly3%oftheglobalmarket?

• AccesstothesinglemarketandEUregulatoryframework criticalforglobalpharmapriorities

Brexit– IndustrialStrategy• OtherindustriesseemajorgrowthopportunitiesinBRIC/TMcountries

• Globalshareofnewmedicineuse:

• 5.5%Germany• 4.5%France• 2.6%Italy• 2.5%Spain• 2.2%UK• 2.1%BRIC/TM

• UK– tertiarylaunchcountry– newmedicineslaunchedin‘newEU’aheadoftheUK?

• Britishpharmalaunchinthe‘newEU’beforetheirhomecountry?

• Patientsurvival‘newEU’countriesaheadofUK?

• Standardofcareimpactonclinicaldevelopment?

Brexit– IndustrialStrategy• MHRAcompletesc.30%ofEMAwork– EMAstaffingproblemsbecauseofuncertainty

• Opportunitiesfromexit:

• MHRAisaworldclassregulator• TheClinicalTrialsDirective• Drug/devicecombinationproducts• RegulationofCompanionDiagnostics• ATMPs• RWE• EAMS

• Opportunitieswillnotevenbegintoberealiseduntilafterwehaveexited

• ‘HardBrexit’coulddamagethepharmaindustry– particularlypatients– morethanotherindustries

Brexit– IndustrialStrategy• Bruegelpaper‘AProposalforaContinentalPartnership”

• twoconcentriccirclesofintegration

• retain‘workingparts’ofsinglemarket

• SundayTimesEditorial

• ‘..outerringofcountries,includingBritain…withgoodmarketaccessbutnofreemovement’

• MrsMerkelatMalta

• “..EUwithdifferentspeeds…noteveryonewilltakepartinthesamelevelsofintegration”

SelfHarm• MostcomplexmarketaccessinEU

• Brexit

• NICEchargingforTechnologyAppraisals

• NICE– NHSEAffordability(consultation?)

• HealthServiceMedicalSupplies(Costs)Bill

• FYFVNextSteps

• RegionalMedicineOptimisationCommittees

• NHSSpecialisedCommissioning

ThankYou!

leslie.galloway@emig.org.uk

www.emig.org.uk