Brexit – Where is the UK going?

The U.K. has been an uneasy member of the European Union for many years and it came as no total surprise when on June 23, 2016, the U.K. population voted to step out of the EU and Brexit was born.

Many false and confusing rumors have followed including a typical ministerial statement made by a “Brexiteer MP” (Member of Parliament) that the U.K. “will keep the European Medicines Agency (EMA) in London.” This has since been clarified as an impossibility by the EMA itself. The Agency is clearly working under the assumption that the U.K. will become a “third country” as of the March 30, 2019 and that it will have to leave London and relocate to another EU country.

Brexit: The War for the EMA

Initially, some 21 countries submitted their interest to become the next home of the EMA with Italy, Denmark, Ireland, France and Sweden being among the front runners. Ultimately, that honor was bestowed to the Netherlands.

The Agency currently has 830 people in the workforce of whom only 7 percent are actually from the U.K.  However, the loss of the Agency staff, along with the associated revenues from other factors as hotels, estimated as some 40,000 bed nights for visiting experts, will be a considerable loss to the economy of East London. The EMA estimates that the move will cost some 520 million GBP, which the Agency is looking to the British Government to pay.

The government has released press updates emphasizing that following the referendum, the Medicines & Healthcare products Regulatory Agency (MHRA) is working closely with the government to analyze the best options and opportunities available for the safe and effective regulation of medicines and medical devices in the U.K.

Lord O`Shaughnessy gave a speech in London in July 2017, where he optimistically said Brexit is a once in a lifetime opportunity to build on the U.K.’s existing strengths, and indicated the U.K. should look on this challenge with optimism and hope. He did go onto announce that some 86 million GBP would be provided by the government to support U.K. innovators. The timing of these funds being available was not described and the amount, while welcome, is relatively small in comparison to the real costs of international clinical research and product development. This is all geared to tell the U.K. clinical R&D community that it needs to “Keep Calm and Carry On.”

UK Gateway to RoW about to close?

The U.K. has long been seen as a gateway to Europe by the U.S., Japan and other non-EU countries. It has built up research units in the form of early phase units, contract research organizations, drug importation and distribution facilities, and considerable pharmacovigilance expertise.

This, linked withthe greater use of the Health Research Authority (HRA) and greater government commitment to support actions has made the U.K. an attractive location for clinical trials, and has in recent years been moderately successful. However now, post-Brexit vote, the sad reality is that the attractiveness of the U.K. as a venue for clinical researchand development for international companies is in the process of receding.

At a recent meeting of biotechs and SMEs in San Diego, CA, it was clearly stated that for now the U.K. is best avoided until there is clarity on its relationship with itsneighbors. The time for clarity is clearly now as if this is not attained soon, more and more of the U.K.’s business will simply be placed with the EU 27, who are, verily, queuing up to take this work and functions.

Brexit Committees

Many companies across the U.S.and EU have set-up “Brexit committees” to look clearly at the various Brexit scenarios to develop plans and strategies for how to deal with the inevitable changes.  As the hopes of a “soft Brexit” appear to recede,these committees are focusing on the EMA Questions and Answers documents that have been issued. This document highlights what will transpire in the event of a hard Brexit with the associated consequences.

Key topics that must be considered:

• Marketing authorization holder: According to Article 2 of Regulation (EC) No 726/2004 the marketing authorization holder must be established in the Union or European Economic Area (EEA)
• Designated orphan medicinal products – the holder will need to be established in the Union (EEA)
• Minor Use Minor Species/limited market status: If the sponsor/applicant is established in the U.K., the MUMS incentives would no longer be applicable with effect from the date of the U.K.’s withdrawal from the Union, as a sponsor/applicant established within a third country cannot seek and receive MUMS/limited market classification in the Union (EEA)
• Qualified Person for Pharmacovigilance (QPPV): the qualified person responsible for pharmacovigilance must reside and carry out his/her tasks in the Member State of the Union (EEA)
• Pharmacovigilance System Master File: According to Commission Implementing Regulation (EU) No 520/2012, the PSMF must be located within the Union (EEA)
• Manufacturing site of the active substance is located in the U.K.: As of the date of the withdrawal of the U.K. from the Union, active substances manufactured in the U.K. will be considered imported active substances. The same applies for the finished product
• Batch release site: In accordance with Article 51(1) of Directive 2001/83/EC and Article 55(1) of Directive 2001/82/EC, the qualified person of the manufacturing and importation authorization holder is responsible to certify that each batch of medicinal product intended to be placed on the EEA market was manufactured in accordance with EU GMP requirements and the marketing authorization.  For centrally authorized medicinal products, the marketing authorization holder will therefore need to transfer its current U.K. based site of batch release to a location established in the Union (EEA) and submit the corresponding variation
• QP: QP for IMP and manufactured/finished product must be located in the EEA
• Legal Sponsor: must be established in the EEA

UK Industry needs to Seize the Initiative

The best we can hope for is a Norway-like agreement that will allow the U.K. to become part of the EEA – this will open up an avenue to solve many of the issues listed above. This, of course, runs contrary to the “control the borders” or “we need to take our country back” mantra that we have heard over the last months.

However, in reality the U.K. R&D industry needs talented and educated people from not only the EU but the RoW to maintain the country’s business integrity and annual revenues, thus maintaining a GDP that will support the system. So maybe some sort of membership of the EEA is the better and indeed only option.

Simply put, whether you are a pharmaceutical or medical device R&D company based in the U.K., U.S., Europe, Japan or, indeed anywhere in the RoW, then now is the time to plan. Whatever the result of talks between the EU and U.K., things will change. Hoping it will turn out for the best is just not going to be enough!

 

John Shillingford

 

References:

1. Julia Robinson, The Pharmaceutical Journal (U.K.) 17^th May 2017
2. European Medicines Agency – Statement issued 31^st May 2017
3. Clinical Trial Regulation. (European Medicines Agency). http://www.ema.europa.eu/ema/index.jsp?curl=pages/regulation/general/general_content_000629.jsp Accessed July 22, 2017.
4. Questions and Answers related to the United Kingdom’s withdrawal from the European Union with regard to the medicinal products for human and veterinary use within the framework of the Centralized Procedure. (European Medicines Agency). http://www.ema.europa.eu/docs/en_GB/document_library/Other/2017/05/WC500228739.pdf Accessed July 22, 2017.