Brexit Watch: Irish Pharma Risks Already Dissipating as Supply Chains Adapt — Panjiva
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Brexit Watch: Irish Pharma Risks Already Dissipating as Supply Chains Adapt

Brexit 68 European Union 407 Health Care 108 Ireland 3 Trade Deals 703 U.S. 3310 United Kingdom 194

Healthcare supply chains in Ireland could be put at risk in the event of a “no deal” Brexit, British Health Minister Matt Hancock has said, according to Bloomberg, stating that “Ireland’s drugs come through the same route as they come to the U.K.” While corporations are increasingly concerned about their post-Brexit supply chains, as outlined in Panjiva research of Feb. 26, the potential for a delay in the process at the least seems likely.

While the minister’s statement may be correct from a logistics perspective it isn’t from a fundamental trade perspective. Bilateral trade (exports plus imports) in healthcare products reached £3.14 billion ($4.13 billion) in 2018, Panjiva analysis of government data shows.

Yet, Britain’s imports from Ireland accounted for 2.0x the level of exports to Ireland. A 24.1% decline in bilateral trade, including a 22.4% drop in British exports to Ireland would indicate supply chains may already be adapting.

BRITAIN MORE RELIANT ON IRELAND THAN VICE VERSA

Chart segments U.K. trade in pharmaceuticals and other medical products with Ireland by direction on a monthly and 12-month average basis. Calculations include Office for National Statistics data.   Source: Panjiva

That adaptation can already be seen in Ireland’s total pharmaceutical imports which climbed 26.4% year over year to reach 11.47 billion euros ($12.95 billion), Panjiva analysis of official figures shows. Imports from the U.K. fell 21.0% while those from the rest of the European Union climbed 121.5% and accounted for 61.1% of the total.

A useful source of diversification could come from increased imports from the U.S., which only represented 24.6% of the total in 2018, as a result of EU-U.S. trade negotiations.

IRELAND ACCELERATED DRUG IMPORTS FROM EU IN 2018, NOW SLOWING

Chart segments Irish imports of pharmaceuticals by origin on a monthly and 12-month average basis. Calculations based on Eurostat data.   Source: Panjiva

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