LONDON – While the pandemic raged, Brexit was simmering on the back burner, but now as infections wane, the industry is turning its attention back to being ready for the U.K. cutting ties with the EU at the end of December.

Dealing with COVID-19 has bitten into a large chunk of the year-long transition period that was intended to help companies ease their way out gradually, and although negotiations on the free trade agreement between the EU and the U.K. have continued despite lockdown, there have been few positive noises.

With little more than 160 days to go there is limited clarity on the shape of the future relations, and the possibility of leaving the EU without a deal remains.

What is clear is that unlike previous Brexit deadlines, it will happen this time. Despite the impact the pandemic has had on trade, U.K. Prime Minister Boris Johnson ruled out any delay on March 13, and any doubt was removed when the last possible date for requesting an extension came and went on June 30.

“We know for certain the end of transition will happen at the end of the year,” said Steve Bates, CEO of the Bioindustry Association, speaking on his first Brexit webinar since March 4.

Some elements of the landscape of the future are in place. The government has set out the details of a points-based immigration system, including plans for a “Talent Agency” to ease the issuing of visas and smooth the way for highly skilled workers to come into the country. That is intended to make up for the limit on access to skills in the EU, once workers there no longer have an automatic right to live and work in the U.K.

In addition, Bates said he expects measures put in place previously to avert problems in the event of a no-deal Brexit, to apply in January 2021. These include an agreement on giving precedence to imports of medical supplies, including emergency airfreight routes.

However, new border controls are inevitable and earlier this month the government announced a £750 million (US$942 million) investment in new infrastructure to create border posts inland where existing ports do not have capacity for processing freight through customs.

The government has recognized it cannot bring in border controls wholesale in January, and there will be phased implementation. By July 2021, all goods will be subject to customs declarations, though the relevant tariffs are still hanging on the Brexit talks on the free trade agreement.

COVID-19 has created an additional layer of complication for supply chain management for drugs companies. The National Health Service dropped all elective surgery during the pandemic and there is now reported to be a waiting list of 10 million people needing treatment.

That means demand for drugs used in elective treatment is expected to rise significantly. But, as Bates noted, that could potentially switch around again if an expected second wave of COVID-19 infections hits later in the year.

According to BIA members, some are sitting on stockpiles, while others have low supplies as a result of disruptions in manufacturing. Bates told companies to expect a letter from the Department of Health, explaining what the government’s expectations are in terms of supply, as final exit from the EU market draws near.

“This is not expected to include an explicit call to stockpile, but rather a get ready message,” Bates said. “We are now really into the countdown for January 2021.”

Questions on Northern Ireland protocol

One of the biggest gaps for the biopharmaceutical industry is that there is no agreement on mutual recognition between the EMA and the U.K. regulator, the Medicines and Healthcare products Agency (MHRA). While the U.K. government has said it will continue to accept EMA-approved drugs, the reverse is not the case.

Of particular concern in that respect is the position of Northern Ireland. In order not to create a hard land border on the island of Ireland, the province ends up with the uncertain status of being both in the EU single market and integral to the U.K. internal market.

The U.K. government is yet to issue guidance on how it sees the Northern Ireland protocol operating in practice, meaning for now companies have to rely on EU guidance, said Emma Du Four, head of international regulatory policy and intelligence at Abbvie Inc. There are “still many questions” on the “thorny issue” of how to apply the protocol, she said.

From the EU perspective, Northern Ireland will remain part of the single market, meaning the remit of the EMA continues to apply.

However, the MHRA has a role as the U.K. regulator in overseeing public health, which will leave it enforcing rules relating to drugs that it will have no part in setting.

“It’s a complicated picture, in terms of the market and regulation,” Bates said. “The question is how is this going to work?”

A prime example of the difficulties is the EU system for preventing falsification of medicines. That relies on pharmacists checking each pack as they dispense it by referring to a centralized database of bar codes uploaded by manufacturers. Pharmacists in Northern Ireland will still have access to the database, those elsewhere in the U.K. will not. It is not clear what the position will be for drugs that come into mainland U.K. and are moved into Northern Ireland.

“We have engaged with the government on this for months, asking how the Northern Ireland protocol works in our sector,” said Bates. “At what point does an imported drug enter the U.K.?

The committee scoping how the protocol will operate has a technical subgroup looking at the issue. “But we’ve heard nothing yet and it’s only 169 days to go,” said Bates.

Du Four said that in the absence of U.K. guidance, the only reference is the EU view that it will classify drugs moving from mainland U.K. to Northern Ireland as imports to the EU. “That underlines the importance of mutual recognition,” Du Four said.

While the EU sees it as part of the single market, EU activities cannot take place in Northern Ireland. That means medicines imported to Northern Ireland cannot be signed off there for export to the EU, and drugs manufactured in Northern Ireland will be classified as U.K. products.

At present, the focus is on keeping existing drugs flowing, but if the situation is not resolved Bates said there will be implications for planning for future products.

Du Four said that from an R&D and clinical trials perspective, the U.K. will still be attractive, but the fact it will be outside the EMA regulatory system is not.

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