The Department of Transport has cancelled ferry contracts worth a total of £89m, put in place to ship imports, including medicines, from the EU to the UK in the case of a no-deal Brexit.
A spokesperson for the department confirmed to The Pharmaceutical Journal on 1 May 2019 that the contracts were terminated following the six-month Brexit extension, which means the UK may not leave the EU until 31 October 2019.
A “dedicated shipment channel” to enable medicines suppliers with short lead times to import medical products to the UK from the EU after Brexit was set up by the government in February 2019.
According to a report by the National Audit Office (NAO), published in February 2019, if the ferry contracts had been terminated in advance of 29 March 2019 — the original date set for the UK to leave the EU — it would cost the government an expected £56.6m in compensation to the ferry companies.
However, the Department of Transport spokesperson said that the actual cost of this compensation bill was “less… than the termination costs reported by the NAO in their own analysis of the freight capacity contracts”.
They said this settlement is lower by several million pounds.
The spokesperson said: “The government’s freight capacity contracts were a vital part of contingency measures, ensuring goods like medicines could enter the UK in the case of disruption during a no-deal Brexit.
“Following the extension, the government is reviewing all preparedness plans. The government’s freight capacity contracts for the summer period are no longer needed and have therefore been terminated.
“The government has taken this decision now as it represents the best value for money for taxpayers.”
This announcement comes after the government said it would be reviewing its position on drug stockpiles that were built up by manufacturers in case of a no-deal Brexit, after the extension to Article 50 was granted.