Brexit and the pharmaceutical industry

Having lived with Brexit now for two years, and most of the nation is bored yet fascinated (and somewhat fearful), the impact of a no deal or an extended negotiation is a real and present issue. With Brexit in seeming turmoil at this point (late 2018) a robust solution to maintain the availability of medicines and medical devices for patients is not yet clear and we see our pharma clients using valuable time and resources to predict and circumvent an unknown outcome.

A series of House of Commons reports has explored the impact of a no deal for the pharmaceutical industry as well as the impact of non-tariff barriers and tariff barriers. It recognises the vital impact the pharmaceutical industry has on the UK contributing 8.2% of exported goods, with a turnover of more than £40 billion. The Government and Industry state that a no-deal arrangement brings the risk of diminished access to the EU markets affecting many millions of patients but also a risk of delays to pharmaceutical imports affecting access for UK patients to medicines they rely on. As a result, industry is being asked to stockpile medicines to ensure uninterrupted supply for a minimum of 6 weeks to ensure a smooth transition through the Spring and early Summer until the path forward is clear.

Commercially, the impact of Brexit regardless of deal or no-deal on the industry is that from 30 March next year the UK will no longer be a co-rapporteur in the centralised drug approval system. As a result, any regulatory procedures expected to complete after this time will need to undergo centralised approval through countries other than the UK. Financially, this means the UK will need to pay a full 100% of costs to review any new medication, rather than a smaller proportion as would happen if we remained in the EU. Mainland Europe will clearly become more attractive points of entry to new medicines approvals, the consequence to patients and Global or European arms of pharmaceutical companies currently based in the UK is as yet unknown.

The European Medicines Agency (EMA) will relocate from London to Amsterdam before March 29 2019, with a permanent home to be settled by the end of 2020. The EMA outlined in October that their activities will need to be scaled back until end of June 2019 due to staffing levels and knowledge transfer. In September 2018, the EMA declared that the UK and the UK’s regulatory body, the Medicines and Healthcare Regulatory Agency (MHRA) would be excluded from all current and future contracts for the assessment of new drugs. The MHRA conducted 20-30% of all drug assessments in Europe earning the UK an estimated £14 million a year. A close relationship with the EMA is vital to ensure the UK is not in the back seat when it comes to access to life-saving medications for cancer, diabetes and neurological diseases such as dementia.

The combined uncertainty of a deal/no-deal scenario and the possible challenges to be faced with a newly emerging EMA in The Netherlands indicate that the next 6-12 months will be an unchartered challenge for the sector. What might this mean for the medical communications/education sector? Certainly, it may mean recruiting the most talented communication professionals will be more challenging, but perhaps it offers us the chance to consider recruitment outside of the EU as the rules will be the same. For those of us UK based agencies with clients based in the EU, especially Global HQ operations, we may find they prefer to use agencies based in the EU family for sheer ease. Of course, agency choice is based on a wider range of reasons than just ease, or indeed cost, and involve expertise, workability and innovation. Articles, from EU agencies are appearing with a sense of hubris that they will ‘mop up’ our clients with their access to borderless trade, seamless financial transactions and trade. In the short-term that may be true, but as long as a deal can be agreed, it seems likely that, in the long-term, trade with Europe can be as robust as it was, and the obstacles, once we’re all used to them, not unsurmountable.

Is it all gloom? The Brexit withdrawal agreement outlines that the UK will explore the possibility of a relationship with the European Medicines Agency (EMA) going forward, but the detail of this relationship is not scoped out in the 599 pages of the document. Similarly, the deal as released in November suggests that the absence of tariffs or quotas should ensure the free and easy movement of medicines and medical devices out of the UK to Europe and vice versa, so I guess it’s just a case of watch this space. These assurances should give us hope in the event of a deal. We live in a globalised society, and the next 6-12 months will undoubtedly hurt, if just because of uncertainty, but a flexible, pragmatic approach will ultimately win through. No-deal? Of course if that happens, then we sail in completely uncharted waters.

For further reading see:
Agreement on the withdrawal of the United Kingdom of Great Britain and Northern Ireland from the European Union and the European Atomic Energy Community, as endorsed by leaders at a special meeting of the European Council on 25 November 2018
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/759019/25_November_Agreement_on_the_withdrawal_of_the_United_Kingdom_of_Great_Britain_and_Northern_Ireland_from_the_European_Union_and_the_European_Atomic_Energy_Community.pdf

The impact of Brexit on the pharmaceutical industry https://publications.parliament.uk/pa/cm201719/cmselect/cmbeis/382/382.pdf

The future relationship between the United Kingdom and the European Union https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/725288/The_future_relationship_between_the_United_Kingdom_and_the_European_Union.pdf