Now that the UK has voted to leave the EU, how might the fallout impact medical device companies?
This week, citizens of the UK took the unprecedented step of voting to leave the EU. The results of the June 23 referendum shocked people and roiled financial markets around the world.
But what might Brexit mean for the country's medtech industry?
Here are a few theories:
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UK Will Lose Life Science Jobs and Investment
George Freeman, a member of the UK Parliament and minister for life sciences, wrote earlier this year that he believed a British exit from the EU could jeopardize the economic impact of the country's life sciences sector.
"The jobs and prosperity being created in our area by the high growth businesses of tomorrow are strongly linked to our membership of the European Single Market, scientific community and to the UK's strong role in influencing the market regulatory framework of the EU," he wrote.
Freeman predicted in February that the impact on the country's economy could be comparable to what the UK saw during the global recession of 2008--and that's without even taking into account trade barriers that could be imposed by the EU.
According to the Irish Times, IDA Ireland, an agency of the Irish government that aims to attract more foreign direct investment to the Emerald Isle, already has plans to lure companies from the UK to its own shores.
UK Will Have Less Influence Over EU Medical Device Regulation
This past May, the Association of British Healthcare Industries, a medtech trade association in the UK, released the results of a Brexit survey of its members. Nearly three-quarters said remaining in the EU would be beneficial to the country as a whole. Among the reasons cited for staying was the possibility of regulatory divergence with the EU if the UK were to leave.
"Companies believed that Britain's influence in the development of the regulatory environment had been positive and an exit would mean both the loss of this influence and the duplication of approval processes for the UK and EU markets," according to a press release from contract research organization Donawa Lifescience.
Law firm Hogan Lovells delved into some other potential specifics, suggesting that UK life science firms could face supply chain interruptions, increased quality control testing, and new export charges.
IP Will Be Put in Jeopardy
Hogan Lovells also explained that Brexit could bring uncertainty in the realm of intellectual property.
". . . unless alternative arrangements can be secured, all pan-EU intellectual property (IP) rights would cease to apply in the UK upon the exit taking effect," the firm wrote.
EU-wide orders issued by UK courts could also be rendered null on the Continent, according to the firm.
UK Device Firms Will Face a Worker Shortage
The UK will need more than a quarter-million more engineers by 2022, according to the trade group Confederation of British Industry (CBI). If the country were to remain in the EU, British companies could draw talent from any of the 27 member states without having to worry about securing visas. Once the UK leaves the EU, those positions could be harder to fill.
Manufacturing workers, too, could be harder to come by. According to CBI, 185,000 EU nationals currently hold manufacturing jobs in the UK.
UK Exports Will Increase Outside the EU
It might all sound like doom and gloom for UK device firms, but at least one person in the industry sounded a somewhat optimistic note.
According to CBI, Jarl Severn, managing director at medical device maker Owen Mumford, posited that if the country's currency loses value as a result of Brexit, its products could become more attractive to export markets outside of the EU.
Still, Severn admitted, it would be "a bit of a seesaw and rollercoaster ride for all concerned."
[image courtesy of TAESMILELAND/FREEDIGITALPHOTOS.NET]