Regulation, research and access: what would be the real impact of Brexit on the pharmaceutical sector?

March 2, 2016

“Europe has gone from 27 (sic) fragmented, independent, not-talking-to-each-other regulatory authorities in the healthcare space to one. That’s a big deal.”
Andrew Witty, CEO of GSK

Until relatively recently, the pharmaceutical sector has been more or less absent from the Brexit debate. Finally, the silence was broken by the likes of Merck, Eli Lilly and GSK, proving that the lack of noise throughout 2015 should never have been mistaken for a lack of interest by pharma or lack of concern on the issue. In fact, pharma has every reason to be worried about this. In Europe, the pharmaceutical sector will be negatively impacted by a Britain outside of the EU to the detriment of both the business and its patients.

Pharmaceuticals is one of the most highly regulated industries, and quite rightly so. We only have to look at the severity of the consequences of the misuse of medication (loss of trust in healthcare systems, drug resistance and even premature death) to understand why. Without the EU, this ‘regulation’ looks like 28 separate countries creating their own separate rules and consequently differing standards – making authorisation of and patient access to drugs a difficult process. Luckily, thanks to the EU, these 28 separate systems have been pulled under one ‘European Medicines Agency’ umbrella, meaning an authorisation of a drug in Germany, means relatively easy authorisation of a drug in the UK, for example. As a consequence, quicker access to the drug for patients.

Of course, if the UK leaves the EU (which puts into question its membership of the EMA); it is still going to be subject to the EU’s rules and regulations on pharmaceutical products. UK producers will have to abide by these rules to ensure that their products are authorised to be marketed and sold within the EU. Moving forward, not only will we most likely have to continue to abide by these rules, if we chose the EEA option for example after a vote ‘No’, but we will also lose our seat at the table in discussions on the development of further regulation. If we look at countries like Norway and Iceland, as part of the EEA, they’ve had to implement things such as the Falsified Medicines Directive, for better or for worse, without any say in its development. This has included things such as the implementation of electronically authenticating medicines. If the UK were to totally remove itself from the single market, and follow a Swiss model for example, then the UK will of course have to implement its own regulation, so that’s double regulatory burden for pharma companies to deal with and likely a host of complex bilateral deals with other member states. None of this is sounding ideal.

‘Brexit would be “challenging” for Merck’s scientists, who have “benefited from a world where they receive grants from the European Union.”’
Roger Perlmutter, Head of R&D at Merck & Co.

Let’s move away from regulation, the pharmaceutical sector lives or dies by its ability to research and develop new drugs and therapies. Scientists working at huge R&D sites in the UK will likely lose access to cross-European scientific research programmes, such as Horizon 2020 and the Innovative Medicines Initiative (IMI). These programmes are working on some of the world’s most significant health threats such as AMR and oncology. In January 2016, the European Investment Fund made a £24.8m commitment to help commercialise innovations at the University College London, with a specific focus on new medicines, further highlighting how the EU benefits British science. On the topic, just last week, more than 50 biotech and pharmaceuticals chief executives signed a letter putting across the business case for remaining in the EU.

Equally, the free movement of people contributes to the strength of Europe’s knowledge economy. The best researchers are able to travel freely from one member state to the next and collaborate with each other. What will happen to UK research institutions when this movement is restricted or becomes so burdensome it prevents us from hosting Europe’s scientific talents?

If the UK is to leave the EU, it’s going to have to think very carefully about whether or not it deviates away from current EU standards in pharmaceuticals. If it is, then I’d really like to know the rationale as to why. The EU (and the US) is recognised as having the highest standards in pharmaceuticals. If it’s not, it’s going to be subject to the same rules and regulations that it already is, without a seat at the table, potentially complex bilateral deals and perhaps even the burden of double regulation. All meaning one thing – it’s going to take longer for patients inside of the UK to get access to drugs launched in the EU, and vice versa. Furthermore, the UK, which is currently seen as a hub of excellence in scientific research, will likely suffer from a cut in funding and loss of some of its most talented scientists, stifling research and innovation. The impact of Brexit on the pharma sector doesn’t just impact the pharmaceutical business, its impact is likely to be most felt by the patient at the end of the supply chain.

Emma Cracknell, Healthcare Practice.

Filed under: Fleishman-Hillard,health,politics,Uncategorized

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A blog on politics, policy, public affairs and communications in Brussels and the European Union. The blog is written by the team at Fleishman-Hillard in Brussels. Views expressed are personal and do not reflect those of the company or its clients.

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