The UK Pharmaceutical Industry Braces for Brexit

UK and EU negotiators have agreed that a withdrawal deal should include a post-Brexit transition period lasting until December 2020 to allow governments time to work out and implement the legislative details. But as talks have stalled in the latter half of this year, the UK government has also warned of a “no-deal” Brexit, in which Britain’s ties to the EU would be immediately dissolved, making it subject to tariffs on goods and additional border checks for its citizens. 

A ‘no-deal’ Brexit would mean the biggest disintegration of the complex regulated medicines market in Europe.

—Laura Collister, BioIndustry Association

This uncertainty is a problem for the pharmaceutical industry, where the development of drugs and other products depend heavily on the political and regulatory conditions of a country, and often require planning years in advance. “The timeframe since the UK voted to leave has been particularly challenging for our sector,” says Alan Morrison, the vice president of regulatory affairs at the American pharmaceutical giant Merck & Company (MSD), which has facilities all over the world. “Product development can take 10 to 15 years, and manufacturing schedules are also made significantly in advance.”

Life sciences firms are among the biggest contributors to the British economy. A recent report by PricewaterhouseCoopers noted that in 2015, they employed 482,000 people and contributed £30.4 billion (around $40 billion USD) to the country’s GDP. And the industry has close ties to the EU: Millions of packs of medicines travel between the UK and continental Europe on a monthly basis, and the UK has long been home to the European Medicines Agency (EMA), the body responsible for evaluating pharmaceutical products in the EU.

See “Brexit’s Effects on Science”

“A ‘no-deal’ Brexit would mean the biggest disintegration of the complex regulated medicines market in Europe in terms of regulation, cross border movement of goods, comparative pricing, and intellectual property,” Laura Collister, the Brexit Lead for the BioIndustry Association (BIA), a trade group for life sciences in the UK, writes in an email to The Scientist. 

To provide a cushion against such effects, many drugmakers have spent at least part of the last two years readying themselves for the changes Brexit may bring. “The position from the industry has been to have business continuity plans to address the whole range of potential Brexit scenarios,” Morrison says. “We really need to ensure that the supply of medicines for patients can be maintained.”

The EMA’s move from London to Amsterdam 

One of the biggest consequences of Brexit for the biomedical industry, regardless of the path Brexit takes, is the relocation of the EMA. In November of last year, the Netherlands won the bid to host the new EMA headquarters, which has been located in London since the agency’s inception in 1995. When the EMA migrates to Amsterdam next spring, it will take hundreds of its current staff, and may implement changes to rules for medicinal products developed and tested in the UK. 

“Whether you’re a small biotech with one product or you’re a massive company with hundreds of products; whether you’re a US, European, or British company, we all go through the EMA process” to market drugs in the EU, says Corinna Peachey, a senior director for corporate affairs at Eli Lilly, an American pharmaceutical firm with a strong presence in the UK. “Therefore, anything that could delay that has an equal impact on all of us.”

The extent of Brexit-induced changes to the biomedical regulatory system has yet to be decided. In a statement emailed to The Scientist, Edoardo Iannone, a press officer for the EMA, notes that “the situation with regard to medicines regulation post-Brexit is part of the negotiations between the UK and the European Union, in which EMA has no formal role.”

This lack of clarity is a source of concern for the pharmaceutical industry. “What causes me the sleepless nights is we actually don’t know how that system is going to work,” Peachey says. The best-case scenario, in her view, would be the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) staying closely aligned with the EMA, maintaining a common system for licensing, clinical trials, and drug safety monitoring, or pharmacovigilance. In the worst-case scenario, she adds, the UK would need to set up its own, separate system for these activities. This could pose a number of issues, including additional administrative hurdles for licensing, as well as delays in UK access to new medicines and drug safety updates.

Under EU law, market authorization holders—organizations granted permission to sell medical products—must be located in the European Economic Area (EEA), which includes EU countries plus Iceland, Liechtenstein, and Norway. And regulatory procedures such as quality control and pharmacovigilance must be carried out at sites on EEA soil. Unless exceptions are made under a Brexit agreement, product licenses and sites for testing and certification will be required to be moved from the UK to an EU country.

Like industry, the British government is hoping to maintain its connection with the EMA after Brexit. “The UK’s position on medicines regulation remains clear,” according to an MHRA statement emailed by the agency’s press office to The Scientist. “We want to retain a close working partnership with the EU to ensure patients continue to have timely access to safe medicines.” 

In an emailed statement to The Scientist, a spokesperson in the UK office of the Swiss pharmaceutical firm Novartis, writes that “it is vital that appropriate transitional arrangements are put in place after the UK leaves the EU in March 2019 to ensure that patients in the UK and across Europe can continue to access their medicines without disruption.” 

Meanwhile, many pharmaceutical and biotech companies are already taking action. “One of the major things we’ve been doing for the last year or so is we’ve had to transfer the centralized licenses for over 40 of our products” that were held by MSD in the UK to a new MSD marketing authorization holder in the EU, Morrison says. In addition to moving the licenses themselves, this process can also involve “considerable” downstream changes, he adds, such as the need to modify the artwork on drug packaging to meet new regulations. AstraZeneca and GlaxoSmithKline, the UK’s two largest pharmaceutical companies, have also publically announced that they are spending tens of millions of pounds making similar preparations. (Both companies declined to speak on the record for this story.) 

Uncertainty regarding post-Brexit drug regulations has already halted at least one clinical trial.

Nevertheless, an EMA survey of 180 market authorization holders suggests that some drugmakers are not fully prepared for Brexit. The analysis, published in September, reveals that while the majority of companies were on track to implement the required changes, such as transferring licenses and ensuring drug safety and quality control procedures can be carried out at an EEA-based facility, action required for approximately 6 percent of 694 medicines—25 for human and 14 for veterinary use—might not be completed on time. “This raises major concerns that if plans are not adapted, these products may no longer be available on the EU market,” the EMA notes in its report. 

Another area of concern pertains to the EU’s new Clinical Trial Regulation (CTR), a framework meant to streamline the application and assessment process for clinical research and provide public online access to critical information, such as data regarding drugs’ efficacy and safety. Although the UK took part in developing the CTR, which is set to be implemented in 2019, its scientists may be unable to access all of its elements—such as the shared online portal—once the country has left the EU. 

UK officials have indicated that the country will sign up to the new clinical trial regulations, but “the key thing that needs to be agreed on is that the UK could have access to the EU clinical trials portal,” says Mike Thompson, CEO of the Association of the British Pharmaceutical Industry (ABPI). Without that access, UK scientists will still be able to submit clinical trial data from the UK for licenses in the EU, but “there clearly will be a level of administrative duplication,” he adds. 

The EMA has told The Scientist in an emailed statement that it “will continue to accept clinical evidence generated in the UK” as long as it meets EEA standards. Nevertheless, uncertainty regarding post-Brexit drug regulations has already halted at least one clinical trial. Last week, the BBC reported that the medical research firm Recardio had stopped all UK-based patient tests of a heart drug, dutogliptin, citing risks associated with proceeding while regulatory issues with the EMA remain unresolved. “This is the first clinical study we are aware of to be suspended in Scotland as a result of Brexit—and a very concerning sign of what could happen,” a Scottish government spokesman tells the news organization.  

Moving goods and people

Each month, approximately 82 million packs of medicine flow between the UK and the EU, according to a recent report from the Brexit Health Alliance, a coalition including the National Health Service (NHS) and various biomedical, research, patient, and public health organizations. Any post-Brexit hurdles to the free movement of goods could spell trouble for those supplies, potentially leading to temporary drug shortages. 

For example, medicinal insulin, used by millions of diabetes patients—including UK prime minister Theresa May—is not manufactured in the UK, nor is it easily stored, as it requires temperature-controlled conditions. The medicine is partly produced and packaged in the EU, and a disruption to the supply chain due to a no-deal Brexit “is one of the ways that patients could be severely disadvantaged,” Michael Rawlins, chair of the MHRA, told The Pharmaceutical Journal in July. “It could be a reality if we don’t get our act together. We can’t suddenly start manufacturing insulin—it’s got to be sorted, no question.”

A no-deal Brexit could disrupt the supply of insulin to the UK.

© ISTOCK.COM, BUSRACAVUS  

To minimize the risk of drug shortages in the case of a no-deal Brexit, the British government asked pharmaceutical companies in August to add a minimum of six weeks’ worth of additional backup supply of medicines to their usual buffer stocks by the exit date, and to ensure that contingency plans were in place for drugs with short shelf lives. Over the last few months, many UK-based drugmakers have confirmed that they are making such preparations. “The first thing we are doing is making sure there is continuity of supply, and making sure that medicines are available to patients,” Eli Lilly’s Peachey says. (Lilly manufactures a significant proportion of the UK’s insulin at facilities in France and Italy.)  

See “Novartis and Sanofi Stockpile Meds in Preparation for Brexit”

But it’s not just the movement of medicines that’s at risk. As the possibility of stricter rules regarding the flow of people between the UK and the EU looms, pharmaceutical firms are concerned about their ability to attract talent from outside Britain in the future. “[I]t is vital that [companies] will still be able to access the best talent from around the world and that brain circulation continues in and out of the UK as science relies on collaboration and cooperation,” BIA’s Collister writes. 

Although Eli Lilly has not yet seen any significant changes to the proportion of non-UK applicants, the company is monitoring the situation closely, Peachey says. She notes that because Lilly does not continuously hire large volumes of employees, it is likely such a change would only be visible after a number of years. 

ABPI’s Thompson says that while his association has not seen a significant number of industry employees moving back to Europe, it has noticed “a reduction in people from the EU applying for jobs in the UK”—an effect that’s been reported in the academic science sector, too. “I think that’s inevitable with this level of uncertainty.” 

Of course, the full extent of the consequences of Brexit—for the pharmaceutical industry and beyond—will remain unclear at least until the UK’s departure, and may not be completely realized for several years afterward. However Brexit proceeds, “we hope that Europe will also see that it’s in the best interest of patients and public health to continue to work in collaboration with the UK,” Thompson tells The Scientist. “That’s the outcome that we’re looking for.”

Update (October 16): The original version of this story referred to an EMA survey published in July showing that regulatory preparations for 16 percent of medicines might not be completed in time for Brexit. The story has been updated with the results from a more-recent survey, in which that number has dropped to 6 percent. 

Correction (December 10): An illustration accompanying this article inaccurately implied that Belarus is a member state of the European Union. The illustration has been removed. The Scientist regrets the error.