Brexit Result Creates Huge Uncertainty for EMA, Drug Developers


Applied Clinical Trials

Britain's unprecedented vote to leave the European Union will have major ramifications for the biopharma industry, including in areas such as drug regulation, R&D, IP rights, and market access.

The European Medicines Agency (EMA) faces an uncertain future, following the decision by the majority of the U.K. electorate (51.8%) to leave the European Union and the victory of Brexit, or "British exit." Paris or Amsterdam already are being talked about as the EMA’s new home.

“It seems certain that the EMA would move its headquarters out of London to an EU country. Some in the pharma world argue that this will in itself reduce the importance of this country (U.K.) in the eyes

of the global drug companies,” noted BBC health editor Hugh Pym in an article posted just before the voting took place yesterday.

If the U.K. decides to negotiate to stay in the European Economic Area (EEA), there would not in practice be much difference to regulation, but if the U.K. stays out of the EEA, bioharma companies would need to go through a separate process with U.K. regulators for new products because the centralized European route would not be applicable to the U.K., he added.

“It could take years rather than months for the implications to become clear,” Pym wrote.

The race to house the EMA will now begin in earnest, according to a report posted today by the Politico website. There will be a two-year period before any relocation decision for EMA is taken, but representatives in Italy, Sweden, and Denmark have all expressed interest in taking over as the host country, the article stated.

“Austere times may not have been on the EMA’s mind when it signed a long lease in 2014 on its newly built office in the financial district, at an annual cost of €19.4 million," noted the Politico report. "It houses as many as 840 of the world’s most respected regulatory and scientific experts, including those working full and part-time. But only 7% of the workforce comes from the U.K.”

A French medicines evaluation official reportedly said that given the high volume of committee meetings requiring experts’ input from throughout the EU, it is vital to choose a city with excellent inter-EU connections, such as Paris and Amsterdam, whereas Berlin is surprisingly poorly connected.

According to David Shaw, GlobalData’s chief operating officer, Brexit would have significant consequences for the pharmaceutical and medical device industries in five key areas: regulatory impacts, R&D, access to talent, intellectual property rights, and market access. For manufacturers, the most immediate impact would be on the area of drug and device regulation, as a Brexit vote would be followed by a series of negotiations lasting two years.

“Given the time scales that life sciences operate, to suddenly enter a two-year negotiation process doesn’t sound like a long time, and that uncertainty makes the monetizing of investments appear more risky,” Shaw said in a release by the healthcare business information provider.

There also may be immediate disruption of the regulation of existing medicines, let alone drugs in development.

“If the U.K. exits the EU, pharma companies could even exclude the U.K. when assessing commercial potential of drugs due to the much higher access hurdle," noted Sean Hu, GlobalData’s senior VP and head of consulting. "Instead, they might choose to focus more on the remaining EU, and treat the U.K. as an isolated country.” 

Despite the possible drawbacks of a Brexit vote, Shaw and Hu believe the biopharma industry could still thrive, but the U.K. would need to follow a different path from the likes of Switzerland, Canada, and Israel, and establish a uniquely British solution.

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