Brexit: No-deal outcome would put UK medicine supply at risk, German pharma industry warns

'Disorderly Brexit would create such a complex situation that it is impossible for companies to prepare for all eventualities,' said Utz Tillmann, managing director of VCI

Theresa May’s government must avoid a hard Brexit in order to safeguard the supply of medicines to the UK, German chemical and pharmaceutical firms have warned.

The UK was one of the largest buyers of German medicines last year but trade in pharmaceuticals between the two nations collapsed 10 per cent to €16bn from €17.7bn in 2017, according to VCI, the industry body for German drug manufacturers.

After Ms May’s Brexit deal was emphatically rejected on Tuesday in the worst Commons defeat ever suffered by a UK prime minister, VCI warned transitional arrangements were needed to avoid the worst consequences for drug supplies.

“A disorderly Brexit would create such a complex situation that it is impossible for companies to prepare for all eventualities,” said Utz Tillmann, managing director of VCI.

In a statement, VCI said Mr Tillmann “deplores the rejection of the Brexit agreement by the British Parliament”.

He added: "A collapse of supply chains would cause damage far beyond our industry. Therefore, specific transitional solutions are essential to at least somewhat ease the most detrimental impacts.

"In particular, this is about supplies of medicines in the UK.”

Uncertainty around regulation after Brexit was the primary reason that UK-Germany trade in medicines and chemicals dropped in recent months, VCI said.

The drop-off in trade has occurred in both directions. German pharmaceutical companies may have imported fewer UK drugs and instead signed contracts with other suppliers in Europe to replace British products in preparation for Brexit, according to VCI.

The cost of customs alone is estimated to be €200m per year and VCI expects even greater burdens in the event that UK and EU rules begin to diverge.

A no-deal Brexit would also have significant consequences for the UK’s chemicals industry, according to the trade body.

“In the event of a disorderly Brexit, chemical substances that were registered in the UK for distribution in the EU could be no longer simply sold in the European Union – with significant consequences for the supply chains,” Mr Tillmann said.

He called on the EU Commission to prevent this by temporarily recognising registrations by companies headquartered in the UK.

The warning is the latest to underline the far-reaching consequences of a disorderly Brexit beyond Britain’s borders.

On Tuesday, research from the Organisation for Economic Co-operation and Development (OECD) predicted that Danish food imports including bacon and butter could drop by almost a quarter if the UK crashes out of the EU.

That would cut Danish GDP by as much as 1.3 per cent, the OECD said.