LONDON – As the days count down to the June 23 referendum on whether or not the U.K. should remain in the European Union (EU), the predicted impacts of either course are getting direr by the day.
In the latest intervention, the G7 group of countries meeting in Japan warned last Friday that a U.K. vote to leave the EU would seriously threaten the global economy. As if that is not enough weight on the shoulders of voters, the specter of a world war has also been raised as a possible consequence of a U.K. exit, or Brexit.
Pharma, biotech and the great and good of British science have firmly nailed their colors to the remain campaign, writing letters to national newspapers to outline in general terms how staying in the EU would be better for the health and wealth of the U.K. (See BioWorld Today, March 1, 2016.)
While there are many imponderables on both sides, one definite outcome of Brexit is that the EMA, as an EU body, would have to relocate from London. In the past week, attention has turned to the specific consequences of such a move and how the U.K.’s position as a leading hub in global pharmaceuticals regulation would be affected.
The repercussions would be felt at three levels, with the Medicines and Healthcare products Regulatory Agency (MHRA) as the lone U.K. regulator having to take on work currently carried out by the EMA; with the loss to the EMA of MHRA’s expertise in the centralized but delegated European drug approvals system; and for companies that have based themselves in London to be close to the EMA and an English-speaking gateway to Europe’s population of 500 million in a single pharmaceuticals market.
In a press briefing last week, Michael Rawlins, chair of the MHRA, said the U.K. agency would have to cope with a much bigger workload were it to become responsible for all U.K. approvals of new drugs.
At the same time, the MHRA would face a £10.3 million (US$15.1 million) per annum fall in the fee income it receives from the EMA for assessing marketing authorization applications.
“Having EMA based in London helps enormously, in that we have a lead in the greatest number of assessments,” Ian Hudson, chief executive of the MHRA, told a parliamentary committee investigating the impact of EU legislation on U.K. life sciences, last month.
With the U.K. representing 3 percent of the global market for new drugs – and paying some of the lowest prices – it is unlikely that companies would prioritize seeking separate U.K. approvals in the event of Brexit. The effect would be to slow patient access to innovative drugs.
“If we left the EU, this would mean the licensing of new medicines would have to be handled by a U.K. agency as well as a European agency,” said Mike Thompson, CEO of the Association of the British Pharmaceutical Industry (ABPI). “Our members have confirmed that the applications for U.K. licenses would come after the EU license, due to the smaller patient population in the U.K.,” he said.
In its evidence to the parliamentary committee, the Bioindustry Association (BIA) said Brexit would put the U.K. in the “paradoxical situation” of having a world-leading regulator that is only able to create regulations for 3 percent of the global market, and whose work would be driven by an EU regulatory framework it cannot influence.
From the perspective of the EMA, Brexit and a subsequent move out of London would mean loss of access to expertise in the MHRA, which is one of Europe’s larger regulatory agencies with 800 staff. Under fee for service, the MHRA currently handles 40 percent of marketing authorization applications submitted to the EMA.
The MHRA also is the largest provider of scientific expertise to the EMA pool, and two of the EMA’s five main scientific committees are chaired by MHRA staff members.
The MHRA has taken a lead in moves by the EMA to speed up drug approvals through measures such as the Adaptive Pathways pilot, where the MHRA has chaired all the “safe harbor” discussions with companies, and the recently launched Prime (priority medicines) scheme. Both the BIA and the ABPI acknowledged the contribution the MHRA is making to accelerating access, in their submissions to the parliamentary committee.
Co-location with the EMA is an important factor in the MHRA’s ability to play a leading role in such regulatory developments. “If disconnected from the European platform provided by EMA, it would be inevitable that MHRA would lose some of its ability to influence regulatory innovation,” ABPI said.
Global companies need large markets
For its part, the EMA is not commenting on the consequences of Brexit. That also is the policy of the European Commission, which has taken the stance it will not consider its approach to the – unprecedented – departure of a member state, unless there is a vote for Brexit.
Apart from the possible imperative to follow the EMA to its new home – both Denmark and Sweden have said they would like to provide a new domicile – companies will have to deal separately with the MHRA in drawing up clinical trial programs. Although it may still be possible to have a single protocol, there will be a time overhead if the U.K. is no longer part of the single EU clinical trials system.
ABPI’s Thompson argued also that Brexit will undermine the U.K.’s standing in clinical research. “An EU exit risks the breakdown of international collaboration between scientists, doctors and industry,” he said.
One of the main rallying cries of the vote to leave campaign is that Brexit would free the U.K. from red tape formulated by the European Commission in Brussels. It is ironic then, that as the most heavily regulated sector, U.K. life sciences companies say one of the key benefits of membership of the EU is the harmonized regulatory framework for clinical research.
In the event of Brexit, the U.K. would either have to put in place mirror regulations or else accept EU regulations, in order to remain a serious player. “In either scenario, the U.K. would have to follow a system that it cannot influence,” the BIA said.
Campaigners in favor of leaving the EU say the U.K. will be able to create its own less onerous system of regulation, which would help domestic companies and attract inward investment. But George Freeman, life sciences minister, told the parliamentary committee that global companies need large markets to justify investments, not just a benign regulatory system.
“Even if the U.K. was making the pace on its own, it would not be as attractive as the EU going at half the speed,” Freeman said.