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Post-Brexit Client Survey Report

Mathew Cutts  |  8 July 2016

The British electorate’s decision to leave the European Union may have been predicted by the polls in the run up to the referendum, but it came as a shock to many of our colleagues in the pharmaceutical industry. In our post-Brexit survey, 84% of our respondents said that they expected Britain to vote to remain in the EU, and 55% were extremely unhappy with the result.

The stock markets rose when the polls closed on Thursday evening, with traders anticipating a victory for the Remain campaign. However, the early unofficial exit polls turned out to be inaccurate, and with the announcement of the 52-48% vote in favour of Leave came falls in share prices totalling over $2 trillion across the globe, and the pound plummeting to its lowest value since 1985. In the UK, the FTSE 250 suffered its largest drop in a single day since Black Monday in 1987.

But while all around them fell, shares in pharmaceutical companies remained relatively stable. Investors usually see pharmaceutical stocks as safe bets because big pharma tends to be less affected by political events, and regardless of what else is going on in the world there will always be ill health and a demand for medicines. Pharmaceutical companies also do business all around the world and the majority of sales come from the USA, shielding them somewhat from the immediate effects of Brexit. Moreover, pharmaceuticals are one of Britain’s largest exports and a weakened pound should boost this further.


Investors usually see pharmaceutical stocks as safe bets because big pharma tends to be less affected by political events, and regardless of what else is going on in the world there will always be ill health and a demand for medicines.


In spite of this, our survey respondents gave mostly cautious or gloomy forecasts about the future of the pharmaceutical industry in the UK. Over half said that the overall effect would be negative, and some anticipated UK-based European headquarters relocating elsewhere. Our survey showed similarly bleak predictions for science and research (73%) and the NHS (48%), and respondents doubted that the Leave campaign’s figures for potential reinvestment were inaccurate.

We also asked our contacts how they thought Brexit would affect their business. Many mentioned concerns over investment in the UK and reduced growth in the mid- to long-term. Other frequent comments referred to the number of European members of staff whose future in the UK was now uncertain, and the high probability of head offices moving into continental Europe. Overall, our respondents expected detrimental effects on their business in the UK, but for international business to be protected.

As several participants pointed out, it is still very early for predicting all the effects of the UK’s departure from the EU, and we cannot expect too much accuracy from our forecasts at this time. It remains to be seen what sort of trade agreements the British government will be able to reach with the EU, or even who the prime minister will be during the negotiations. Only time will tell if we will regret invoking Article 50 – or indeed if we will ever get around to doing it.