Brexit Shmexit — Let's Keep Calm And Carry On

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

The “Keep Calm And Carry On” saying (so popular of late) has been revised in countless varieties and is showing up on everything from coffee mugs to emojis. And while you might think wearing a Keep Calm T-shirt makes you trendy, let’s remember the context of where and when the phrase had its origins (i.e., a 1939 British government slogan prior to WWII). It seems especially important during these days of Chicken-Little type reaction to the UK’s referendum to “Brexit” the EU. Not surprisingly, on the day Brexit was first announced (Friday, June 24), the markets responded with the Dow Jones industrial average (DJIA) and the NASDAQ composite index losing 609 and 200 points respectively. Considering such a negative market reaction, one might expect the converse when it was first announced that the House of Commons had approved the UK’s membership to join the European Economic Community (EEC) on Thursday, October 28, 1971. However, the move was not met with market jubilation, but more of a yawn, with the DJIA closing up from the day previous by only 1.24 points. Maybe we should keep calm and breathe easy on Brexit. After all, the process of the UK exodus will take years, and will first require a parliamentary vote approving the move. And for those worried about the process of disentangling the UK from the EU, from a life science perspective, it should be somewhat easier. Because though the EMA (the drug regulatory agency for EU members) was founded in London in 1995, the UK, like every other EU member, continued to operate its own regulatory agency (i.e., Medicines & Healthcare products Regulatory Agency).

Not long ago, a colleague asked if we should be doing more to cover Brexit. They believed this to be a “massive anti-globalization event” that could have dramatic implications for the life sciences industry. I agree this could be a significant worldwide event, but I also feel there are plenty of folks rushing to analogize Brexit as a “time bomb” that will leave most of European pharma outside of the EU. For example, one article listed which European pharmaceutical companies will be domiciled outside the EU following Brexit. Looking at the list, I found it interesting that Switzerland is where the top two — Novartis and Roche — reside. A country sitting at the geographic center of Europe, Switzerland, is not a member of the EU, and yet, according to a report published by the World Economic Forum (WEF), ranks first of the 10 most competitive European economies. Further, Switzerland has been sitting atop WEF’s global competitive index (GCI) for seven years in a row, beating out Singapore (2) and the United States (3). Not being a member of the EU doesn’t seem to have hurt the Swiss. As such, perhaps an argument can be made that there is more to be gained by the UK opting to go it alone. For though the majority of the GCI top 10 come from EU member countries (i.e., Germany [4]; the Netherlands [5]; Finland [8]; Sweden [9]; and the UK [10]), I wonder if they may have fared better had they not been burdened with carrying several of their less productive EU counterparts (e.g., Greece). Sure, untangling the UK from the EU — should it actually happen — will present challenges. But instead of expecting the Brexit sky to fall, perhaps we can keep calm, for within adversity there always resides opportunity.