No political question has captivated businesses in the same way as the British referendum on European Union membership (aka Brexit). In this deck, two Ogilvy politicos to dive into the referendum, implications of a potential #brexit, and to advise on communicating around the outcome. Mathew Shearman, Senior Account Manager at Ogilvy Healthworld London and James Stewart, Associate Director at Ogilvy Public Relations London cover: 
- Perspectives on the challenges facing clients - Recommend Brexit priorities for businesses and Leaders - Deep-dive on implications for the pharmaceutical industry

1. Brexit? And the future of business
Mathew Shearman, Senior Account Manager at Ogilvy Healthworld
James Stewart, Associate Director at Ogilvy Public Relations
THE EU REFERENDUM
Thursday 16th June 2016

2. Associate Director
Ogilvy Public Relations
James StewartMathew Shearman
Senior Account Manager
Ogilvy Healthworld

3. WHAT IS THE UK ACTUALLY VOTING ON?
ECONOMIC UNION
Single market, not the Euro
POLITICAL UNION
28 member states
SOCIAL CHAPTER
Worker conditions

4. Council of EU:
28 relevant ministers
– 1 from each country
Also review law
EU Commission:
28 members 1 appointed
by each country
They initiate law
They debate together
EU Parliament:
751 elected MEPs
– the UK has 73
Scrutinise and debate law
Debate again
No law
Law is passed
AGREE?
AGREE? AGREE?
no
yes
yes
no
no
yes
yes
THE MAKING OF LAW IN THE EUROPEAN UNION

5. STATE OF THE CAMPAIGN
KEY CAMPAIGN ISSUES:
• Immigration
• Economy
CAMPAIGNS TRENDS:
• Conservative Party division
• Labour are (relatively) united, but are Labour
voters?
• Young people want to remain, but will they vote?

6. A TURBULENT UK/EU RELATIONSHIP
1st Jan 1973 2004
1975
1989
2013
23rd June 2016
1992

7. 7 DAYS TO GO
Graph: http://whatukthinks.org/eu/opinion-polls/poll-of-polls/ (accessed 15/06/16)
48% 52%

8. A GENERATIONAL DIVIDE
60 years + 18-24 years
Graph: http://www.economist.com/blogs/graphicdetail/2016/05/britain-s-eu-referendum (accessed 15/06/16)

9. THE BREXIT PROCESS
ARTICLE 50
24th June - Autumn
2016(?)
RENEGOTIATION
2016-2018
Specific trade deals
Contribution to EU budget
NEW RELATIONSHIP
??

10. BREXIT ON BUSINESS

11. SINGLE MARKET
The impact on the UK economy will depend on changes to access
to the single market or new free trade deals.
• The single market removes barriers to trade and investment within
the European Union
• The European market is declining and trade deals such with
India may be more quickly formed
• Different assumptions:
• Anticipated drop in £, economic growth between 3% and 6% lower
• Boost from regulatory burden – 1.6% GDP?
• Maintain the single market with legal harmonisation and EU budget
contribution?

12. CURRENT TRADE RELATIONS

13. FOCUS ON LIFE SCIENCES
A UK priority area

15. A BASE FOR BRANDS IN LIFE SCIENCES

16. A LIFE SCIENCES PERSPECTIVE
EFPIA says that as part of the EU, UK pharmaceutical
companies can continue to benefit from:
EU Marketplace Pan-European
R&D collaboration
EU advocacy on
global trade issues
Harmonised
regulatory
environment

17. LIFE SCIENCES IN THE UK
The UK is a high exporter & importer of pharmaceuticals:
$34.5 billion
$34.7 billion
EUUK

18. 400
0
-400
-800
-1,200
-1,600
-2,000
2
0
-2
-4
-6
-8
-10
DRUG SPENDING DECLINE FORECASTED
Following a projected dip in GDP, pharmaceutical sales
to the NHS would decline:
Figure 2: Change in forecast pharmaceutical sales, UK
Change in pharma sales, Brexit scenario
compared to baseline (£m); left scale
% change vs non Brexit
scenario; right scale
Source: The Economist Intelligence Unit forecasts
2015 2016 2017 2018 2019 2020
259
-1,223
-1,707 -1,664
-398
2016
Pharmaceutical
sales: £18.7 bn

19. THE SINGLE MARKETING AUTHORISATION
The UK currently has a role on the Committee for Medicinal
Products for Human Use (CHMP)
For medical devices, the CE mark gives access to the UK market
Pricing of treatments is a national responsibility – NICE plays a
role on the European Network for HTA (EUnetHTA)
Potential impact on domestic drug access and
launch sequencing.
HARMONISED
REGULATORY
ENVIRONMENT

20. CLINICAL TRIALS: FROM INVESTMENT TO ACCESS
The UK is currently the top country for phase 1 trials, 2nd for
phase 2 trials.
The UK receives the second highest financial contribution from
Horizon 2020 – EU research funding.
EU public/private partnerships, such as the Innovative
Medicines Initiative (IMI), ensure collaboration across borders
Regulatory burden shift for companies with UK-specific
protocol?
PAN-EUROPEAN
R&D COLLABORATION

21. WHAT WILL HAPPEN AFTER THE REFERENDUM?
And how should business respond?

22. What will happen after brexit?
NOBODY KNOWS

23. BUT… WE CAN ASSUME
There will be a period of turbulence while the political and business environment come
to terms with the result
• The British financial markets will drop and the pound will fall in value
• David Cameron will resign – Boris Johnson would be favourite to replace him
• Significant pressure will grow for Scottish independence
Britain will be forced to renegotiate its relationship with the EU
• Will the UK join the single market? Will the EU let the UK join?
• How will the EU react to Britain negotiating trade deals having left?
The British government will have to establish how it replaces role the EU plays in the UK
e.g. research fund like the Horizon 2020
There will be changes to travel and working rights for EU citizens in the UK

24. HOW SHOULD BUSINESS RESPOND?
Businesses will be under pressure to assess the impact of Brexit and make business
decisions on this information:
• Vital to monitor the political environment immediately after the result
Likely to be a spate of companies announcing changes to British operations:
• Many listed companies will announce plans in Q2 reports
• Narrative likely to develop about businesses / investment drying up
Risk that companies seen to rush out will be subject to customer / governmental impact
Opportunities for corporates to influence government agenda / Brexit negotiations if
done carefully
Don’t only worry about your British business – the EU will be facing its biggest crisis yet

25. BUT EVEN WITH A REMAIN VOTE THERE WILL STILL BE CHANGES
The political dynamics in the UK will have changed:
• Conservative Party divisions
• UKIP increasingly able to attract former Labour voters
Britain will resist further EU centralisation and may veto new members joining
Likely to be a referendum on any further EU treaties

26. THANK YOU
For further information, please contact:
Mathew Shearman
Mathew.shearman@ogilvy.com
James Stewart
James.stewart@ogilvy.com