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UK Pharma Pushes for Frictionless Trade with EU Post-Brexit

on Monday, 12 February 2018.

The organisations representing big pharma and biotech in the UK (the ABPI and BIA) and various big pharma companies have called for regulatory alignment and frictionless trade with the EU post-Brexit.

They have warned against what might occur if this does not happen.

Some of the calls came in a Parliamentary enquiry held by the Business, Energy and Industrial Strategy Committee. There were also similar calls in a consulting report written by the Office of Health Economics for the ABPI and BIA.

Parliamentary Enquiry

In the Parliamentary enquiry, AstraZeneca, Johnson & Johnson, Merck and Roche emphasised their desire to have barrier-free trade between the UK and the EU. It called on regulatory alignment in the pharma sector. In addition, it said that the funding gap with the withdrawal of EU funding would need to be filled.

AZ said its ability to conduct and run clinical trials involving the UK would be undermined because of administration and delays, if the UK had to rely on World Trade Organisation rules and tariffs. AZ called for an agreement that sees the UK remain part of the EU regulatory framework for medicines research, development, manufacture and supply.

J&J warned that the UK could become less attractive for research, given the way it benefits from the EU's Horizon 2020 funding.

Merck saw a positive opportunity from Brexit, calling for a streamlining of regulatory and access for new medicines. However, it was vital to remain part of or close to the EU regulatory framework, to ensure on-going safe decision-making on new products and continued access to medicines.

For Roche, the future danger was that all goods moving between the UK and EU could be held at border checks, in warehouses or manufacturing or facing significant re-testing - all of which could severely disrupt supply chains and disruption to life-saving medicines. Frictionless trade had to be a top priority to avoid disastrous and dangerous life-threatening situations for patients, it said.

The ABPI and BIA warned that, with the UK representing just 3% of global medicine sales, the pharma industry might see the UK as a less important market if it has a standalone regulatory system, with increased costs and delays to medicines.

BIA and ABPI Report on Brexit Public Health and Economic Implications

Meanwhile, the Office of Health Economics' report commissioned by the BIA and ABPI has set out the public health and economic implications arising out of four Brexit scenarios:

Scenario 1

The UK's medicines regulator (the MHRA) remains fully involved in EU public health and the UK negotiates free trade agreements with the EU

Public health and economic consequences would be minimal due to full co-operation and free trade. The cost to pharma companies would also be negligible.

Scenario 2

The MHRA implements a standalone regulatory system and negotiates agreements with the EU that cover inspections of quality and manufacturing processes (not the releases of batches); and the UK negotiates free trade agreements with the EU

There could be a big reduction in the number of submissions or delays in submissions of marketing authorisation (MA) applications in the UK for new medicines. This was based on experience with other major countries, such as Switzerland, Canada and Australia - 45% of MA applications submitted to the EU's regulator, the EMA, in 2013-5 had not been submitted to all three of those countries by the end of 2016.

The EU could also lose access to the UK's leading expertise in detecting and management of adverse health effects.

There would be delays of up to five months in communicating emerging risks and crisis management, which would lead to slower regulatory action and an impact on managing public health risks such as influenza.

There would be major costs for pharma companies in transferring or duplicating MAs.

Testing and release of batches would not be mutually recognised, thus adding to costs in duplicate batch testing and release facilities. This would not add value; just cost.

Scenario 3

The MHRA implements a standalone regulatory system and negotiates agreements with the EU that cover inspections of quality and manufacturing processes (not the releases of batches); trade co-operation is regulated by WTO most favoured nation agreements rather than free trade agreements

This would be similar to Scenario 2, but in addition there would be shortages of medicines due to changes in trade and parallel trade rules.

The impact of no mutual recognition of batch release would be substantial on both the UK and the EU. In the EU, the UK hosts the second highest number of good manufacturing practice sites and the third highest number of sites involved in batch certification.

Customs delays could result in major changes to supply chains for medicines, leading to cost, delays and shortages. Some sites, such as those importing vaccines and human blood products are disproportionately located in the UK compared to the rest of the EU.

Scenario 4

No public health co-operation between the MHRA and EMA; and trade co-operation regulated by WTO most favoured nation agreements rather than free trade agreements

In addition to the results described in Scenario 3, the absence of a Mutual Recognition Agreement between the two regulators could complicate the certification of manufacturing, importation and distribution sites. The MHRA would have a massive upsurge in workload and there could be different findings from the different regulators.

Steve Bates, Chief Executive of the BIA, said: "With 82 million patient packs travelling between the UK and EU each month, it is vital that teams on both sides of the Channel make patient safety a priority. The complex issues surrounding medicines regulation and supply chain need to be front and centre in the second phase of talks, and industry needs a realistic transition period to ensure that the supply of lifesaving and life-extending medicines to patients in the UK and across Europe is not affected."

Comment

In summary, without regulatory co-operation and free trade agreements by the time Brexit occurs, the pharma industry is warning of extra costs, fewer available medicines, supply chain complications, delays in medicines and in reacting to public health challenges, delays in dealing with adverse events, and medicine shortages. A transitional arrangement may allow more time to plan, but the OHE report and their sponsors advocate pharma companies go through advanced planning for the worst case scenario for the change.

There is no bigger issue facing pharma in the UK at the moment than Brexit. We will be holding an event in June 2018 on how Brexit is affecting the pharma industry. If you are interested in attending the event, please contact Paul Gershlick in our Pharmaceuticals and Life Sciences team on 01923 919 320.

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