How MSD is Preparing for Brexit
Ever since the people of the UK shocked the world and defied the polls by voting by a narrow margin to leave the European Union in the 2016 referendum, the country has been thrown into an almost perpetual state of division and uncertainty.
Since that expectation shattering vote the UK has had three Prime Ministers and an ill-advised general election which saw then PM Theresa May lose her party’s majority in the House of Commons – the exact opposite of her intention.
Arguably the most frustrating part of the Brexit process over the last three years has been the apparent lack of progress which has been made regarding the exact nature of the arrangements – particularly related to trade – of the UK’s post-Brexit relationship with the EU. After several extensions to the deadline, the current date of exit is set to the 31st October 2019 and, unless a further extension is agreed upon and in lieu of a deal being struck, the UK will leave the EU with no deal in place on that date.
The UK government recently released its own impact assessment – dubbed Yellowhammer – which lays out the base consequences to the country of crashing out the EU without a formal trade deal in place.
The document was originally described as a base case but was edited to claim it to be a worst-case scenario for the public release. Therefore, it is safe to assume that the following should all be considered, to varying degrees, likely to occur.
Stocks of certain fresh foods will be decreased and, due to increased tariffs, certain products will increase in price. Disruption to the chemical supply chain could see fresh drinking water affected. Increased waiting times at ports and other borders are likely to see a slow down in products of all types reaching their destinations.
Most crucially among these is the impact a no deal Brexit will have on the pharmaceutical supply chain – of particular concern to those people suffering chronic illnesses such as diabetes.
“The reliance of medicines and medical products’ supply chains on the short straits crossing make them particularly vulnerable to severe extended delays – three quarters of medicines come via the short straits,” reports the Yellowhammer document. “Supply chains are also highly regulated and require transportation that meets strict Good Distribution Practices. This can include limits on time of transit, or mean product must be transported under temperature-controlled conditions. Whilst some products can be stockpiled, others cannot due to short shelf life.”
As the European arm of the pharmaceutical giant, Merck & Co, MSD has been watching the Brexit situation unfold with keen interest and, with the deadline looming, has been putting plans in place to mitigate the impact of a do deal situation.
The company has established a Brexit project team, tasked with the mission of making sure the brand is able to mange the workload needed to operate under the new status quo. MSD is now confident that it has made adequate preparations and that those patients who rely on its products should see the minimum amount of disruption to their treatment schedules.
“To mitigate any disruption associated with Brexit, we have sought to prepare adequate stock build for all affected medicines and products across all impacted markets as well as undertaking a comprehensive evaluation of our distribution routes,” said MSD. “Throughout this planning process we have followed and applied all recommendations contained within the preparedness notices published by the UK Government and the European Commission.”
MSD is also investing in a new post-Brexit research hub in London which will employ over 950 staff. The goal of this new hub is to centre a portion of the MSD supply chain within the UK itself and therefore eliminate the issue of its products having to cross borders to reach the county’s patients.
Of course, there is still the issue of the necessary ingredients getting through via the chemical supply chain but having a research and development hub within the UK itself should help mitigate at least some of the problem.
When writing these pieces, one must always try to remain objective to the facts, but it’s hard to presently see where the benefits of Brexit are. Government incompetence seems to have played a large role in the situation UK industry presently finds itself in, but it could very well be that Brexit was a poisoned chalice to begin with.
Had freedom of movement not been so successfully weaponised during the campaign and therefore set out in Theresa May’s so-called red lines, it’s very possible that an arrangement such as that Norway has with the EU could have been established, retaining all the free trade advantages of membership.
However, we hope that the government can work out a deal before the October deadline, as a no deal situation seems to be one which will inflict severe harm to UK industry. In the meantime, it’s good to know brands such as MSD are doing their best to mitigate this harm.
Brexit and its impact on the pharmaceutical supply chain is set to be a hot topic at LogiPharma 2020, being held in April, at the Nice Acropolis, France. Please download the agenda today for more information and insights.