Although Brexit negotiations continue to be in flux, there remains one constant: the importance of maintaining cooperation and regulatory alignment with the EU, particularly in the life sciences sector. This sentiment has been emphasised on numerous occasions by the UK government including in its report on the impact on the sector published earlier this year; and earlier this month by the Secretary of State for Exiting the European Union who demonstrated that the pharmaceutical industry is one of the top five industry sectors dependent on exports and imports between member states.
The prospect of no-deal exacerbates the plethora of Brexit-related issues facing the industry. Imposition of border tariffs and additional customs barriers could significantly affect the supply of medicines, impacting patient care and access to treatments. Exit from the EU is precariously close and with trade terms still unfinalised, medicine stockpiling and alternative transportation and routes for drugs have become a stark reality.
Barriers to future manufacturing investment with life sciences companies facing additional regulatory, administrative and financial hurdles to market their products in the UK. Leaving aside the additional cost of border tariffs, companies are now faced with the costs of complying with the requirement to have new UK-based representatives for multiple duties: to deal with UK market authorisation applications (required to place drugs on the UK market), to take overall responsibility for clinical trials, and to manage pharmacovigilance (drug safety). Additionally, the current streamlined centralised process for European market authorisations will no longer be available; companies now have to apply for market authorisations in both the UK and the EU.
However, investment in Scotland currently appears buoyant, with landmark projects being announced such as the £56 million Medicines Manufacturing Innovation Centre (MMIC) planned for Renfrewshire, which aims to assist pharmaceutical companies to develop and adopt new techniques into their own manufacturing processes.
Access to European initiatives and collaborative projects, funding and workforce is in jeopardy. The UK research community currently benefits from access to funding from European initiatives (such as Horizon 2020), collaboration on European projects (such as the Innovative Medicines Initiative), access to skilled workers across the EU, mutual cooperation between EU institutions in respect of conducting clinical trials and automatic sharing of pharmacovigilance and post-market safety data.
Loss of these benefits could result in skills shortages and a reduction in research projects undertaken in the UK. However, if Scottish projects continue to be funded by a combination of the pharmaceutical industry, Scottish Enterprise and UK Research and Innovation (such as for the MMIC) and innovation centres such as the Industrial Biotechnology Innovation Centre and Stratified Medicine Scotland, and other public sector bodies such as the Edinburgh BioQuarter, then this will help mitigate the loss of access to European funds.
Contingency planning is in progress to try to sustain European connectivity and cooperation within the sector in the event of a no-deal Brexit (as outlined in various technical notices issued by the UK government in August and September), including the following measures: – conversion of current EU rules into UK law on exit through the EU Withdrawal Act (adapted as necessary) and continued recognition of EU standards and processes where possible; – increasing the work scope of the Medicines and Healthcare products Regulatory Agency (MHRA) to adopt the EMA’s functions (eg. submission of pharmacovigilance data, requirements for paediatric and orphan medicines) and to act as a stand-alone medicines and medical devices regulator; – implementing temporary measures to ensure the continued parallel import of goods (including pharmaceuticals) from the EU/EEA; and – “grandfathering” to ensure all marketing authorisations granted centrally by the EMA are automatically converted into UK marketing authorisations.
Efforts need to be stepped up to ensure continued connectivity to the European regulatory network and to realise the Life Sciences Scotland 2025 vision to increase jobs and double sector turnover to £8 billion. Businesses need to be alive to legislative changes and how these will impact business models, commercialisation strategies, supply chains and fulfilment of existing contracts.
As the clock ticks towards 29 March 2019, greater certainty will reassure the public that the UK’s healthcare system will survive Brexit uncompromised.
This article reflects the position as at 23 October 2018.
Caroline Scott is a senior associate solicitor with DLA Piper LLP