The strong support from both the Australian and British prime ministers for a new trade agreement between their two countries should be welcome news for the life sciences industries.
Both governments have been pushing for such a deal for economic and political reasons. The British Government is keen to demonstrate that it has a positive agenda for the country after it leaves the European Union in 2020 and an early trade deal with a friend like Australia is a quick win. It will also be a relatively safe environment to brush up Whitehall’s trade negotiation skills after decades of relying on officials in Brussels to negotiate on its behalf. For Australia, a new trade deal with the UK would provide new trade and investment opportunities in a variety of industries and support the Australian government’s desire to build new innovative Australian science, industries and businesses.
So far both countries have informally discussed what issues could be covered if negotiations on such an agreement formally commenced. The British and Australian governments have had a joint working group looking at the issue for some time, the UK Government has made submissions to an ongoing Australian parliamentary inquiry into Australia’s trade relations with the UK, and ministers on both sides from Prime Ministers down have talked about the desirability of a new trade and investment agreement between the two countries. Areas flagged for negotiation include agriculture, education, energy, finance and banking, green technologies, healthcare, infrastructure, mining, pharmaceuticals and tourism. While there have been no formal ‘negotiations’ on an agreement as such due to Britain still being a member of the EU, there’s been an awful lot of informal dialogue already about what could be in it.
For the life sciences sectors in both countries, such an agreement could be a real opportunity. With a bit of creative thinking and positive engagement, the pharmaceutical and biotech industries in the UK and Australia could contribute to a positive trade and investment agreement that supports both countries’ economic, industrial and social agendas.
From the days of Alexander Fleming and Howard Florey discovering penicillin onwards, the two countries have had a unique scientific, economic and social partnership that could compliment a new joint investment strategy for life sciences and healthcare. Over the last decade pharmaceutical trade between the two countries has averaged around £570 million, or AUS$1 billion, a year. British companies like GSK and AstraZeneca have substantial investments in manufacturing, research and clinical trials in Australia, and Australian companies like Seqirus have significant manufacturing and research investments in the UK. British and Australian companies supply medicines and vaccines to patients in both countries through government reimbursement schemes. The Australian biotech sector is already benefiting from investments by British companies, such as AstraZeneca’s investment in Australian biotech company Starpharma, and Australian companies are investing in British biotech, such as Australian investment fund Hostplus investing in Oxford Nanopore. There are many areas where life sciences could feature in a future trade and investment agreement between the two countries that builds on this existing relationship.
Regulatory reform and harmonisation in areas such as medicines approvals and clinical trial regulations could feature. It is not inconceivable that Britain’s MHRA, newly engendered as Britain leaves the EU, could partner with Australia’s TGA to the point where there is sharing of best practices and even mutual recognition of their respective regulatory approvals. Australia has already done much work on this in similar discussions with New Zealand without finalising the deal. While the scope of what’s possible is complicated by the lack of clarity on the MHRA’s status in the European EMEA, there is lots of potential here. Clinical trials regulatory reform in both countries could reduce the costs of approving and conducting clinical trials of new medicines. Initiatives to promote joint investment, R&D projects, drug development and clinical trials between the two countries could be explored.
Building on a positive investment climate is an important opportunity. Facilitating venture capital investment between the two countries in emerging biotech companies could open new scientific opportunities and capital markets. Both countries in their industrial strategies have also talked about the importance of building links and collaboration between the public research and business sectors. Why not have both countries working together to strengthen collaboration in science, medicine and drug development?
Agreement on the need for competitive and predictable intellectual property and tax policies could provide greater investment certainty in both countries. As high-income industrialised economies, both countries can probably agree on solid intellectual property provisions although, again, Australia may need to re-examine its data exclusivity provisions. There is also scope for the countries to ensure best practice scale and scope of R&D tax incentives for things like clinical trials and drug development.
Both Australia and the UK could agree to campaign at the World Trade Organization and Commonwealth level for the abolition of all tariffs and taxes on medicines, thus promoting free trade and helping some of the poorest patients in the world get access to cheaper medicines.
Given both countries also have national, publicly-funded systems of universal health coverage and medicines reimbursement systems, albeit with important differences, there is also scope for constructive engagement with the private sector in implementing universal health coverage. Both countries already have the pharmaceutical and biotech industries as key pillars of their national medicines policies, so positive dialogue between industry and government in Australia and the UK on best practices could help deliver more effective health and medicines policy in both countries.
Having the life sciences sector feature in a UK-Australian trade agreement could ultimately be good news for the countries’ economies, industries and patients.
Brendan Shaw is principal of Shawview Consulting, based in London. He was previously chief executive of Medicines Australia in Canberra and was also assistant director general at the International Federation of Pharmaceutical Manufacturers and Associations in Geneva.