The aftermath from the Brexit vote in the United Kingdom is only first being digested the world over. As with so many other sectors, there are implications for the pharmaceutical industry. Some 70,000 people in the UK work for drug makers, including AstraZeneca and GlaxoSmithKline, which are based there. Will companies want to shift substantial portions of their operations elsewhere? The European Medicines Agency, which oversees product approvals, is also headquartered in London, raising questions about the ability of the UK’s own regulator, the Medicines and Healthcare products Regulatory Agency, to fill that role. Then there is concern about government support for basic research. We spoke with Michael Thompson, who heads the Association of the British Pharmaceutical Industry, the large trade group, about these unknowns. This is an edited version of our conversation.
Pharmalot: What’s your primary concern right now?
Thompson: Well, it’s important to keep in mind this is going to take two years to unwind. The referendum is advisory, not binding. The UK is going through a changing government, and a new government will then start a process of negotiations. It’s clear that even the people who want to leave don’t want to create some sort of island with a drawbridge drawn up. They still want some relationship with the European Union, such as an “associate membership.” There’s a lot to work through with the pharma sector. But it’s likely some people will think twice about investment in the UK, if that investment is intended to have a broader reach.
Pharmalot: Can you be more specific? What are you referring to?
Thompson: For instance, if it’s a manufacturing investment where the intent is to supply more than UK — in other words, supplying Europe — people will pause to understand potential trade barriers or tariffs. It’s a rational decision for them to make.
Pharmalot: It may be early days, but what are you telling the government that industry needs?
Thompson: I think the government understands life sciences is a jewel in the crown and will look at everything necessary to offer incentives for pharma companies to remain here and work here and bring medicines to market here. We would clearly want for a new government to say some of the things they want to achieve in life sciences.
But we’ll work together to put together a task force so when a new government is appointed, probably in October, we’ll have a series of recommendations for them to adopt quickly. There’s going to have to be a balance in this. There are some areas where we clearly want to retain close work with Europe, but there may be some regulations that we don’t adopt and may have to be more agile.
Pharmalot: What if this “associate membership” does not come to pass or the UK does not remain in the European Economic Area, which may be an option for allowing free movement of people and goods?
Thompson: It’s all up for discussion. There a loose association we want to have and will have to negotiate. Nobody thinks will it be an easy thing to do. … The EEA membership is a slightly more integrated model than EU “associate membership.” The difference is essentially around if an EEA member needs to implement a lot of European law, which may be quite challenging. … The freedom of movement principle is clearly very challenging.
However, we believe the life sciences sector would be a top of priority in terms of arguing for particular global skill sets. … Even under a Brexit scenario, we should be able to get a majority of global skills and talents we need.
Pharmalot: What are the implications for a move by the EMA?
Thompson: The EMA essentially outsources work to national agencies. … Through the MHRA, the UK currently undertakes about 30 percent of the work for new [marketing] licenses. Those decisions come back to the EMA and a committee, where every country has one vote on those proposals. But the EMA is not where the bulk of the work is done.
We need to remember that disease does not recognize borders, so it’s clearly in the interest of UK residents that we continue to work closely with our nearest neighbors. In the regulatory sphere, we’d fill part of a centralized process as an “associate member.” … There’s a huge amount of expertise in London, and that’s currently benefiting all of Europe, as well. I believe one of their major concerns is not to lose that capability. It can be a win-win, but we need some time to work through it.
But if we ended up with a regulatory system that is not a centralized process and everything has to go through the MHRA [for approval in the UK], I think it would be a rational decision for global companies to seek a [marketing] license in Europe before they were to do so in the UK. There are 500 million patients in the EU versus 60 million patients in the UK. That would clearly mean that Britain would be second in the queue, and we wouldn’t like that. It starts to have all sorts of implications about where you do clinical trials and research priorities. There’s no doubt there’s a potentially negative story here.