The U.K. government is working to ensure adequate quantities of medications and medical devices are on hand for the transition period that will follow any form of Brexit. As for the life sciences and biotech industries – it’s become increasingly clear they face acute disruption as a result of this period of uncertainty.
The October 31 deadline for a U.K. exit from the European Union (EU) is rapidly approaching without a deal in sight. The current political situation is unsettled; PM Johnson suspended Parliament – a move that resulted in a related ruling by the U. K. Supreme Court. Ongoing efforts to craft an acceptable alternative to a hard border in Ireland are so far unsuccessful. Most recently, French President Macron and others called for PM Johnson to revise his current Brexit plan by the end of the week.
A “No-Deal Brexit” will impact all aspects of life in the U.K. Of particular concerns are the nearly inevitable shortage and significant price increase for some foods, and the potential for a scarcity of drugs and medical devices. The U.K. government is working to ensure adequate quantities of medications and medical devices are on hand for the transition period that will follow any form of Brexit. As for the life sciences and biotech industries – it’s become increasingly clear they face acute disruption as a result of this period of uncertainty, whether or not a satisfactory deal is ultimately reached.
European Medicines Agency Move to Amsterdam
One Brexit-related change that has already occurred is the March 2019 European Medicines Agency (EMA) move from London to Amsterdam. The EMA, which regulates the quality and safety of medicine for the EU, moved its headquarters it must be located in an EU country. At the time of its closing in January 2019, The Guardian reported that “Simon Fraser, the vice chair of Chatham House and the former permanent secretary at the Foreign Office, wrote: “Losing the European Medicines Agency HQ is a significant loss for London and for the UK.” In that same report, The Guardian wrote that “In September it emerged that Britain’s leading role in evaluating new medicines for sale to patients across the EU had collapsed with no more work coming from Europe because of Brexit.”
Potential for Back-Ups at the Dover Crossing
One benefit of membership in the EU has been the lack of internal customs checks between the 28 member states. Unless a deal is reached that will continue this ease of travel, any freight coming in the U.K. at the Dover crossing will be subject to a customs check. This is extremely problematic since the Dover crossing was not designed to facilitate anything beyond the arrival of RORO (Roll On – Roll Off) freight onboard ferries. It is not possible to provide adequate space for customs checks of trucks traveling in and out of the port. Since Dover is the port of choice for more freight than the other crossing combined, a backup at this port will result in increased traffic at more distant points of entry. The combination of these factors will lengthen the time it takes to receive goods to and from the U.K. – especially problematic for firms using JIT (Just In Time Inventory) strategies in their manufacturing processes. For pharma and biotech companies, this includes the materials they require for their products
Potential Tariffs, Drug Permissions, etc.
Goods traveling within the EU are not subject to tariffs. Unless the U.K. reaches a satisfactory agreement before it leaves the EU, all manner of products – including drugs and medical devices – will be subject to possible tariffs resulting in higher prices for drugs and devices from the U.K. Also in question is the status of the regulations that make it possible for the U.K. to freely export its pharma products to members of the EU. Germany is of particular concern because its aging population has a need for these products and the money for their purchase. Barriers to trade with this market will have a significant effect on the U.K. pharma market. Patents, intellectual rights, and other aspects related to the production of drugs and medical devices also have the potential to become more complicated – and thereby more expensive.
Ability to Work and Information Sharing
Under the current EU agreements, researchers can easily work in the U.K. and vice versa. At the moment, there is great uncertainty about the future for these workers. If there is a no-deal Brexit, it is not at all clear what that will do to the status of researchers. The uncertainty is already causing difficulties as pharma companies are advised that they are not able to give firm commitments or certain answers to those concerned about the outcome of a no-deal Brexit. The impact on the ability to share patient data across borders is similarly a matter of concern since many clinical trials are in process within the EU. Once the U.K. is outside the EU, the sharing of patient data will become a critical concern. Especially in the area of rare disease research, where the number of patients involved in trials is definitionally small, the necessity of sharing any data leaves researchers concerned for their work.
Government and Industry Response to Uncertainty
The U.K. government has a site for Brexit Readiness that contains the best information available, as well as steps to take to prepare for Brexit. The U.K Bioindustry Association (BIA) for life sciences in the U.K. has a Brexit Portal, and is holding a series of webinars and talks (YouTube) leading up to October 31. BBC has an “Explainer” that addresses the components of Brexit.
Next Steps
In addition to the events taking place in the U.K. in the coming weeks, there will be a European Council Summer on October 17-18. The purpose of this summit is for the U.K. to secure a deal with EU leaders. Possible outcomes from this summit are a deal, a delay, or a no-deal exit. The U.K. pharma industry has a lot riding on the outcome.
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- Please click here for more information on our contributing writer, Gina Hagler