Brexit: The India angle

With the recent UK Elections having played out as it did, Brexit seems like a foregone conclusion.

For my part, since quite a few leading pharma and biopharma companies (incl. my current clients) have a presence in UK (with concomitant, heavy cross-talk with EU on crucial areas like R&D and Policy), I have been following the evolution of Brexit for some time now.

While Brexit has global implications, I thought of sharing a topline rundown on how I see it affecting India:

1. Currency Valuation: The GBP would probably see a phase of unsteadiness (and potential depreciation) until the post-Brexit UK attains economic stability. IMO, this would affect the inter-currency conversion rates (for INR-GBP), potentially improving the INR's exchange prospects.

More directly, this would improve the purchase Reach for the INR, making hitherto expensive aspects of the pre-Brexit UK more affordable (or less expensive, at the very least). This is likely to translate in an uptick for both tourism and real estate purchases

2. Business Partnerships: As the EU-UK status quo adapts (and changes) to align with Brexit, there is a marginal possibility for India to see benefit if engagements that had a UK-EU partnering need revisiting - won't be the first time that India's stepped up to synergize with one of the partners (by replacing or augmenting the other party that is scaling down/back).

Also, since post-Brexit UK will take a while to stabilize, incoming businesses are likely to be welcomed, easing access for Indians keen on setting up/expanding footprint there

3. Gateway for Skilled Migrants: Professionals (esp. Healthcare, IT, and High Skilled Migrants) would see a gate or two open - moreso for clinicians and related skilled workers since the ageing population and a workforce shortfall plagues most first world countries, incl. UK.

While this is good news (esp.for care givers of the elderly), it is actually driven by a potentially large unmet need for specialized skills with long incubation periods. As a result, I do not anticipate this 'gate opening' to spillover too widely since the original premise of Brexit is to restore Economic surety and Employability to own citizens (and not outsiders) - too many open gates would be counterproductive, IMO

5. R&D Partnerships: Here, I believe that Pharma and Healthcare would see both EU and UK recalibrating, offering India with select opportunities.

Exactly how the recalibration benefits India is a bit of a 'wait and watch' but then with India becoming a global provider of generics and steadily gaining ground in Clinical Trials, Biosimilars and most things Analytics, it is likely to be good news in the medium-long term.

My limited view of the landscape leads me to believe that more India-based CROs, CMOs and Research outfits would approach (and receive entry into) post-Brexit UK.

Given the domestic pharma climate (ridden with sluggish growth well into 2020), this might be a welcome window of opportunity for desi pharmacos. However all interested parties should account for a lag phase before celebratory returns can accrue - post-Brexit UK will take time to stabilize and march upwards to economic success. For Pharma, I have usually observed this to mean a window of 18 -24 operational months (at the very least).

IMO, when Indian Pharmacos do expand their footprint into post-Brexit UK, it would be relatively easier for them to access a world class talent pool, besides identifying clear opportunities to do better R&D and find deeper channels into EU markets, especially as multinational pharma companies with EU-centric R&D hubs based out of sites like Cambridge now rethink staff outlay and headcounts!

Caveat: Please note that this is just my opinion basis my understanding of the evolution of Brexit and the existing Policy and Enforcement Climate (sic) prevalent in the UK.

I also realize that with the timeline assigned for post-Brexit recalibration (until Dec. 2020), there is ample scope for new policies, new rules and new situations to emerge and change the game.

As always, comments and inputs are welcome.

Thank you for reading...... :-)

[P.S. I am happy for Northern Ireland though. It retains its soft border with Ireland as well as its membership of the EU market - albeit with dual tarrifs. That doesn't seem such a bad square to stand on. While new policies and rules could change that, I doubt the likelihood.]

{P.P.S. IMO, in regards to Pharmaceuticals R&D, the EU would be affected a little adversely (as Brexit occurs). That's because in quite a few areas, esp. clinical trials, new drug approvals and GCP/GMP, the UK (esp. NHS and NICE) has been an unequivocal guiding light so much so that in some cases, the EMA (thanks to the UK) was more prescient in withdrawing/denying toll gate passage to a drug/therapy even though the USFDA allowed it.

In some of those cases of prescient judgment (including "Me too" drugs), the USFDA had to reconsider the earlier approval!}

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