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Focus on Regulation

UK Parliamentary Report Published on the Impact of Brexit on the Pharmaceutical Sector

The Business, Energy and Industrial Strategy Committee, a parliamentary select committee, has published a report on the consequences of Brexit on the UK pharmaceutical industry.

The report examines the impact of different outcomes of the UK/EU negotiations, including a “no deal” scenario, on tariff barriers, non-tariff barriers (e.g. border delays), regulatory alignment, trade opportunities, skilled workers, and research and development, as well as the proposed transitional arrangements. The key conclusions include:

  • To ensure the continued success of the UK pharmaceutical industry, the UK must seek the closest possibly regulatory cooperation and minimum border friction possible.
  • The UK should remain aligned with the regulatory standards in the EU.
  • Any potential benefits from Brexit such as quicker approval of medicines would be limited and “hugely outweighed” by the additional costs, loss of influence and loss of access to existing, successful markets and products.
  • The potential for weaker intellectual property regulation would be outweighed by the potential loss of investment in the UK and, conversely, the potential for stronger intellectual property protection would be outweighed by increased costs to the NHS and harm to the generic sector.
  • The UK is already a significant part of a global industry and there is no evidence of new trade routes that the UK could benefit from.
  • The best potential approach for the UK to grow as a world leader in the development, manufacture and regulation of pharmaceuticals is to maintain as close as possible a relationship with the EU.

The report also makes a number of recommendations that are intended to inform the Government’s negotiating position in the upcoming UK/EU trade negotiations, including that the Government should:

  • Seek regulatory alignment with the EU in relation to pharmaceuticals.
  • Prioritise a form of membership with the European Medicines Agency (EMA) that maintains cooperation and does not require replication of manufacturing sites, testing or roles.
  • Seek to retain a presence for EMA employees and facilities in the UK where beneficial to the EMA and MHRA.
  • Seek a trade agreement with the EU that includes all finished and component pharmaceutical products and at the same time work with the WTO to expand the list of pharmaceuticals and components that are currently subject to no or reduced tariffs.
  • Prioritise continued friction-free access to the EU market and the roll-over of existing free trade agreements with third countries.
  • Ensure that the UK does not diverge from current intellectual property rules.
  • Ensure continued access to workers to meet skills shortages and support personal and corporate development.
  • Ensure that UK companies can conduct clinical trials through continued cooperation with European institutions and mutual recognitions of results.
  • Take a pragmatic approach in relation to any potential continuing role of the ECJ in the pharmaceutical sector.
  • Reach a quick decision on the new relationship with the EU to minimise unnecessary contingency planning costs.

The recommendations echo previous calls from the UK health minister and business minister for close regulatory alignment between the UK and EU for medicines after Brexit and Prime Minister May’s statement that she would seek “associate membership” of the EMA. In support of this, the report cites examples of existing agreements in place between the EMA and a number of countries, including Switzerland, the US, Canada and Australia, which allow for cooperation such as sharing of confidential information, mutual recognition of good manufacturing practice (GMP) standards and batch testing.

The Committee report, published on 17 May 2018, is available here: https://publications.parliament.uk/pa/cm201719/cmselect/cmbeis/382/382.pdf