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Pharma Warns About Uncertainty and Costs from Brexit Process

on Wednesday, 17 January 2018.

The cost to the UK of paying for medicines could rise by about £100m per year if pharmacy is not able to source cheaper medicines from other countries through parallel trade in the European Economic Area after Brexit.

Those are the warnings of the Healthcare Distribution Association, a body which represents UK pharma wholesalers.

Community pharmacists buy most of their drugs from UK wholesalers, but they sometimes source cheaper medicines from other countries within the EEA. This is under the single European market, where goods and services can be bought and sold anywhere in the EEA once they are placed onto the market there. When the UK leaves the EEA, it may not have a deal that allows this parallel trade to continue.

Whether people in the UK can continue to trade freely in medicines with other countries after Brexit is currently in doubt, without trade talks or a clear statement of how the UK and EU market and regulatory regime will work. Not having smooth arrangements or even a transitional deal on Brexit could mean that British pharmacists are no longer able to source medicines from the rest of the EEA.

The UK also currently shares the same regulations with the rest of the EEA. The HDA said that, going forward, there could be separate regulatory regimes, meaning that pharma companies could need to have separate Qualified Persons in the EU and UK to enable the safe batch release of medicines - adding cost and complexity for pharma suppliers. In addition, the loss of equivalence with European rules could adversely affect the ability of pharmaceutical manufacturers to bring products to the UK market as quickly as they currently do.

The HDA told the Health Select Committee that this could lead to supply problems and health risks. The group warned that "disruption to the cross-border flow of medicines has the potential of placing patient safety at risk". It has also warned that extra customs controls and administrative hurdles could slow the supply of medicines to patients.

Meanwhile, pharma suppliers have already started to incur costs in planning for the so-called 'cliff edge' Brexit where there is no deal between the UK and the EU on trade arrangements. GSK, the UK's biggest medicines supplier, said it will now start spending money in preparing for Brexit. This will include plans for duplicate medicine testing centres in the EU, and preparing for two separate drug licensing regimes.

Comment

There is no bigger issue facing pharma 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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