How will the life sciences sector cope in an era of deglobalisation?
A potent tonic of trade wars, protectionist barriers and populist actors has led to the retreat of globalisation. This could have significant ramifications for the life sciences sector, Dods Monitoring's Nabil Rastani writes.
A study conducted by Global Alert has inferred that the world is entering an era of ‘deglobalisation’. For the first time since the collapse of the Berlin Wall, the integration of the global economy and political system is being rolled back. There is a real danger that this could impact the production of new and innovative medicines.
The UK has a rich tradition of internationalism, helping to shape the embryonic globalist movement by becoming an essential actor on the international stage through institutions such as the UN, WTO and until recently the European Union.
According to the Rule of Law index, the UK has consistently ranked as one of the most open governments in the world. Indeed, the UK’s commitment to free trade and a system underpinned by the rule of law has helped cement it as an economic powerhouse, with specialised industries such as the life sciences sector being able to trade seamlessly with a plethora of actors globally.
However, the inexorable march of populism and the wider backlash towards globalisation means that the life sciences sector must rethink how it engages with policymakers in this increasingly fragmented world order.
A crucial impact of de-globalisation is the gradual unravelling of nascent intergovernmental institutions which helped consolidate a global system of governing medicine standards and intellectual property rights.
Indeed, promising agencies such as World Trade Organisation and the International Medical Device Regulators Forum have facilitated a growing consensus towards building an integrated and harmonised global medicines regime. This development has spurred greater efforts towards tackling international issues such as Antimicrobial Resistance. Moreover, it has also seamlessly supported regional collaboration programmes such as the Horizon 2020 scheme, accelerating the production of innovative new medicines.
The decay of these collaborative agencies could have detrimental implications on the cross-border flow of medicines. As states erect hefty protectionist barriers, populist actors will increasingly weaponise domestically produced drugs in order to consolidate their isolationist agenda, reducing the efficiency by which medicines are developed.
Traditionally populist discourses which may have traditionally been viewed as belonging to the periphery of accepted narratives are increasingly becoming embedded in mainstream party policies. Evidenced by the Labour Party’s ‘Medicines for the Many’ programme. Historically, industry has relied on open markets led by technocratic driven governments. But as the traditional rules of governance are being written in Western democracies, a corporate exodus by pharmaceuticals towards more prosperous markets is a potential prospect in the near future.
The Chinese Dream
This is exemplified by China’s efforts to attract pharmaceutical firms to its lucrative and rapidly growing markets. This determination has culminated in the Communist government’s ‘Healthy China 2030’ programme. The programme has placed a conscious emphasis on the role of foreign investment in the future of China’s healthcare system. Pfizer and AstraZeneca both recorded massive year-on-year sales growth of 24% in the second quarter of 2018 -further spurring the sectors optimism around investing in China.
High confidence in Chinese markets has also been bolstered by conscious efforts from Beijing to improve the uptake of medicines, including the introduction of a Priority Review pathway for drugs that meet urgent demands. Efforts have also been made to streamline and modernise China’s... TO READ MORE AND DOWNLOAD THE FULL ARTICLE CLICK HERE