Brexit: Impact on Pharmaceutical Industry
The summary below has been collated from various commentaries on the subject of Brexit and the potential implications for the pharmaceutical industry. References to the original articles are captured in the Reference Section.
On 23rd June 2016, United Kingdom (UK) citizens will vote to stay in or leave the European Union (EU). Current opinion polls suggest the public is fairly evenly split on the matter. The Financial Times Brexit Poll Tracker (FT Poll of Polls) from 08 May 2016 indicates:
- 46% of those polled are in favour of staying in the EU
- 43 % are in favour of leaving the EU
- 1% being undecided
The British pharmaceutical industry is overwhelmingly against exiting the EU. More than 50 industry leaders have warned of the regulatory and business upheaval that could result from the UK leaving, published in an open letter to the Financial Times. The executives argue leaving the EU would result in “significant regulatory burdens” and diminish the status of UK medicine institutions within the region.
“Over a generation, regulators and legislators have built up an integrated European regulatory framework for clinical research and development of new, innovative medicines. It is cornerstoned in the UK, and has significant UK input.” the executives wrote. “If the UK were to leave the EU it would risk unpicking all of that successful work. It would affect regulatory frameworks, the leadership role of the UK’s Medicines Healthcare Products Regulatory Agency (MHRA) and the National Institute for Health and Care Excellence (NICE) in the EU… and most importantly patient access to medicines.”
They warned the EMA would have to leave London because EU institutions’ agencies cannot be located outside the Union’s borders. And they signed off with a plea to voters to keep Britain in Europe and let the industry continue to flourish in its present state. “We are ambitious for the UK’s future in Europe.”
They are not alone in articulating their concerns. The European Federation of Pharmaceutical Industries and Associations (EFPIA) which has grown over many years into a vital component in the complex structure of the research-based pharmaceutical sector declared: “Britain’s departure from the EU would threaten scientific research and jeopardize the 28-nation bloc’s system of drug regulation.” They acknowledge, “The decision to leave or remain within the EU is a decision for UK citizens” but add, “however, EFPIA firmly believes that the UK’s continued membership of the EU is in the best interests of a strong life sciences sector in the UK and Europe”.
Details of how the UK’s regulatory system will interact with the rest of Europe in the event the UK leaves the union are yet to be established, resulting in significant levels of uncertainty. Norway, which is outside the EU but in the European Economic Area, is covered by the centralized authorization procedure. Switzerland, another non-EU country, has mutual recognition and sharing agreements with Europe.
A variation on these types of relationships could await the UK if it leaves the EU, although its situation is complicated by the fact that it is has spent decades forging ever-tighter bonds with its neighbours. If the form that Brexit takes removes the UK from direct effect of EU legislation in this area, this will add significantly to the administrative overhead for pharmaceutical companies, since regulatory procedures (e.g. marketing authorisation applications, clinical trial authorisations, etc.) which are currently undertaken in a harmonised EU environment, may need to be duplicated in the UK.
More specifically, Britain could face increased complexity in terms of the manufacture, testing, and release of drug product into the market and to clinical trials outside of the UK, health authority inspections, the patents ecosystem, and product licencing.
Brexit has the potential to create barriers for both the UK and the EU which could adversely impact the movement of pharmaceutical products. The UK may become a “3rd” country like the US and drug products manufactured in the UK may have to be imported into the EU with all the attendant import testing and QA/QP checks. Conversely, drug products manufactured in the EU may have to undergo a similar process to gain entry into the UK.
Health authority inspections carried out by the UK MHRA might no longer be seen as valid by the EU member states and they could insist on the inspection of UK facilities that export drug product to the EU. Conversely, the UK might not consider the inspections of the health authorities of EU member states valid to allow the import of drug products into the UK, forcing the UK MHRA inspection of EU sites. This would increase the overall inspection burden to both health authorities and pharmaceutical companies.
How about products that are centrally licenced in the EU? Would those have to be re-licenced? Would EU approved products be considered unauthorised Investigational Medicinal Products/Auxiliary Medicinal Products when used in clinical studies? These questions remain unanswered.
Negotiation of a Mutual Recognition Agreement (MRA) with the EU would alleviate some of the above, but this will take time to put in place and relies on the EU member states willingness to support. If however, a Norwegian type agreement were to be negotiated the UK will still have to sign up to all the relevant EU Directives and Regulations to gain EU access, but will no longer have the leverage to influence them, as a member of the EU, that it currently has.
All of these outcomes have the potential to impact jobs within the life sciences sector however it’s difficult to estimate the extent of this impact without knowing what form Brexit will take.
Finally, Britain can withdraw from the EU two years after telling the European Council it wants to go. However as noted, there are likely to be lengthy negotiations on the UK’s relationship with Europe and it’s the trade agreements. At the end of two years, anything the UK hasn’t concluded negotiations on has to be extended by unanimity of an EU vote, of which the UK would not be a part of.
Pharmaceutical companies across Europe face considerable uncertainty at the prospect of the UK leaving the EU but some consequences can be anticipated namely, years of negotiation and increased complexity.
By: Kirsteen Magee, Director, Clinical Supply Operations, Mylan Global Respiratory Group, Mylan Pharma UK Ltd.
1. Financial Times Brexit Poll Tracker https://ig.ft.com/sites/brexit-polling/
2. RAPS. “Industry Leaders Warn Brexit Would Lead to Significant Regulatory Burdens” by Nick Paul Taylor: http://www.raps.org/Regulatory-Focus/News/2016/02/25/24406/European-Regulatory-Roundup-Brexit-Could-Lead-to-New-Regulatory-Burdens-25-February-2016/#sthash.swuqsPCr.dpuf
3. Thepharmaletter. “Brexit could send shockwaves through EU pharma industry” http://www.thepharmaletter.com/article/brexit-could-send-shockwaves-through-eu-pharma-industry
4. EFPIA Statement on Brexit http://www.efpia.eu/mediaroom/323/43/EFPIA-Statement-on-Brexit