As with so many wider discussions on Brexit, at present there are no clear answers – until we know whether we have a hard, soft, or even ‘no deal’ Brexit and have actually exited Europe, we can only speculate as to what the impact will be.
There is a lot of conjecture around the inevitable exit and many a leading market commentator have put their views into the mix. However, today the reality is the sector remains strong and resilient and whatever happens, the markets will need to adapt.
We are aware that there has been a significant fall in European pharmacists registering in UK with the GPhC which may be because of the uncertainty. In fact, this fell by around 83% in 2016 from 166 to just 30. Whilst there have also been many comments on the numbers of ‘homegrown’ pharmacists entering the employment market, the reduction of qualified pharmacists from overseas may result in a shortage within the sector which in turn could result in wage pressures and increased costs.
Recently there have been discussions on the stock piling of drugs in an attempt to mitigate the disruption of supply, a potential consequence following an end in free movement of trade between the UK and Europe. Some operators are even suggesting the delays could mean they run out of certain drugs entirely.
The free movement of goods within the EU allows medicines to be traded across borders, however without a suitable Brexit deal this could either be severely disrupted or end as a consequence. Similarly, the UK pharmacy sector has benefited in recent years by sourcing medicines from around Europe where prices are lower, however, without a free trade agreement this could have an impact on drug prices, resulting in price increases and reduced gross margins. Access to parallel trade may be stopped because of a bad or no deal with Europe.
Fluctuations in the Sterling will also potentially increase the cost of imports, again resulting in higher cost pressures on drug suppliers and ultimately retail pharmacies.
Ultimately, due to the overall uncertainty around Brexit, it is difficult to provide informed and decisive advice on how the sector should react. However, what we do know is that as a sector that has faced significant hurdles in the last few years including funding cuts, Category M claw backs, as well as issues surrounding generic drug pricing and shortages, in all cases the market has survived and adapted. Whilst there may be initial disruptions we are convinced that the sector will adapt and come out of Brexit stronger and more resilient.