Pharma and Brexit: What Happens Next?

The pharmaceutical industry is in a wait-and-see mode as the UK tries to come up with a new Brexit plan that will mend internal division in the UK while still satisfying the EU. What is the impact on supply and pharma regulation?

Brexit: where it now stands

The pharmaceutical industry, like other industries, is in a wait-and-see mode as the UK seeks to work out a plan for its withdrawal from the European Union (EU). Unable to come to a consensus on its Brexit plan within the UK and not wanting to leave the EU without a plan, the UK sought and received last month (April 2019) an extension from the European Council, composed of the heads of EU member states, for a new withdrawal date of no later than October 31, 2019.

Although the extension has provided the UK with more time and the benefit, for at least now, of being able to avoid a “no-deal,” or hard exit from the EU, the UK still has to work out internal division to come up with a plan that would gain consensus in the UK Parliament, a stumbling block after UK Prime Minister Theresa May had tried unsuccessfully on several occasions to gain approval of a Brexit plan that she had negotiated with the EU.

The extension prolongs what has now become a three-year effort by the UK for a Brexit plan following a public referendum in June 2016 in which the UK voted to exit the EU. On March 29, 2017, the UK notified the European Council of its intention to withdraw from the EU and set the target date of withdrawal for this past March, March 29, 2019. The UK and the EU came to an agreement on the two main pieces of a Brexit plan: (1) a separation agreement, which has the arrangements for the UK’s withdrawal from the EU, and (2) a plan for the UK’s future relationship with the EU in the form of a political declaration, the non-binding part of the Brexit agreement that focuses on future custom ties. The parties came to terms in late 2018, and the European Council formally adopted the agreements in mid-January 2019. That plan, however, negotiated by UK Prime Minister May, had to be approved by the UK Parliament, which did not pass that plan or other Brexit alternatives. Unable to gain a consensus within the UK Parliament for a Brexit plan, the UK sought and received the extension and now is in the midst of negotiations internally to come up with a Brexit plan that will pass the UK Parliament while meeting terms with the EU.

As of press time (May 15, 2019), UK Prime Minister May said she will bring her previously rejected withdrawal bill back before the UK Parliament’s House of Commons during the week of June 3 for a vote as an attempt to get the plan approved prior to Parliament’s recess in late July. The move sets a end time to reach a cross-party consensus for the plan. A key point of debate internally with the UK is whether the UK should be part of a customs union with the EU. Being inside a customs union would mean that there would be no internal tariffs on goods transported between the UK and other EU nations, something seen as positive for business, but it would also mean that the UK would not be able to negotiate its own trade deals on goods with other countries, which does not satisfy those in the UK seeking a clean break from the EU. Another point of contention is the resolution of the so-called Irish border backstop, referring to the part of the agreement that deals with border issues between Northern Ireland, which is part of the UK, and the Republic of Ireland, which is an independent country and a member of the EU.

To overcome the impasse, Prime Minister May, head of the Conservative Party, has involved the head of the opposition party, the Labour Party’s Jeremy Corbyn, in this new round of negotiations after the UK Parliament had voted three times to reject the Brexit deal that May had earlier negotiated with the EU. Whether a cross-party consensus within the UK can be achieved, however, is not clear with some members of the UK Parliament also calling for a confirmatory public referendum for Brexit. As of mid-May, the vote for the withdrawal plan in the House of Commons will proceed in early June whether a cross-party consensus is reached or not, casting further uncertainty over whether the June vote could be successful. If the withdrawal bill is voted down again in June, it raises the possibility that the UK would leave the EU without a deal or oblige further negotiations with Parliament to secure a deal.  If the vote is successful, it creates the possibility that the UK could leave the EU as early as the summer, a time frame that Prime Minister May is calling for before Parliament’s recess. 

As negotiations continue, the UK faces certain key deadlines. As still now a member of the EU, the UK is obligated to participate in the EU’s parliamentary elections in May. In the event that the UK has not held elections to the European Parliament in accordance with applicable EU law and has not ratified the withdrawal agreement by May 22, 2019, the extension ceases to apply on May 31, 2019, and the UK’s withdrawal would take place on June 1, 2019. This scenario is not likely as the UK government has said it will participate in the EU elections. If the UK ratifies the withdrawal agreement at any stage before October 31, 2019, the withdrawal will take place on the first day of the month following the completion of the ratification procedures, which could mean a withdrawal date of November 1, 2019 if the UK takes the full length of the extension until October 31 or now earlier, if the June Parliamentary vote is approved. As part of the extension process, the European Council will formally review progress at its meeting in June 2019.

Brexit and the pharmaceutical industry: supply issues

Throughout the Brexit process, the pharmaceutical industry has urged for a negotiated agreement on Brexit, which would include cooperation between the EU and the UK on the regulation and trade of medicines, and has continued working in preparation for Brexit and the ensuing scenarios that may arise. With the uncertainty cast by the latest round of Brexit negotiations, the pharmaceutical industry continues a plan to stockpile medicines, a plan that first began in September 2018 when the UK was negotiating with the EU and the possibility of a “no deal” in Brexit arose. Around three quarters of the registered medicines and over half the clinical consumables the UK uses come from (or via) the EU, according to the UK’s Department of Health and Social Care (DHSC). In its updated contingency plan released in late February 2019, the DHSC identified approximately 7,000 prescription-only and pharmacy medicines that have an EU or European Economic Area “touchpoint.” At that time, the DHSC said it was working with suppliers to ensure they increase their buffer stocks to hold at least an additional six weeks of stock (over and above usual buffer stock) in the UK before March 29, 2019, the original Brexit withdrawal date. It said that the vast majority of companies had confirmed stockpiling plans were in place. For those medicines that cannot be stockpiled because, for example, they have short shelf-lives, the DHSC asked suppliers to make alternative routes using airfreight, which some suppliers already do now. Since the granting of the extension to October 31, 2019, the DHSC said it is reviewing its contingency planning. 

Mike Thompson, Chief Executive of the Association of the British Pharmaceutical Industry (ABPI), which represents innovator pharmaceutical companies in the UK said: “Companies are doing everything they can to protect the supply of medicines whatever the Brexit outcome,” in an April 11, 2019 statement following the announcement by the EU that the UK had been granted an extension to October 2019 to withdraw from the EU. “As part of this, they have increased stocks of medicines in line with Government guidance. With the extension of Article 50, we will work with Government to consider how best to prepare and review whether current plans for a no-deal Brexit are still appropriate.”

The UK’s pharmaceutical regulatory authority, the Medicines and Healthcare products Regulatory Agency (MHRA), also continues to call for “a deal” for Brexit, but in the event that a “no-deal” occurs, it updated in early April (2019) a list of guidances relating to marketing authorization and imports and exports of pharmaceutical products and active pharmaceutical ingredients.

The issue of managing supply and avoiding supply disruptions extends not only to Brexit-related activities but is part of larger policy focus by the European Medicines Agency (EMA), the EU pharmaceutical regulatory agency. Last November (November 2018), the EMA and the heads of the national medicine agencies (HMA) in the EU held a joint workshop to gather perspectives from different stakeholders on how to better address potential problems with the supply of medicines. The meeting was part of the work of the HMA-EMA Task Force on the Availability of Authorized Medicines for Human and Veterinary Use that was formed in 2018. In September 2018, the task force adopted a two-year work program, which lists actions for regulators and pharmaceutical companies on how to prevent supply issues. The stakeholder meeting held in November 2018 sought to include input into the task force’s deliverables. Key elements of that two-year program are highlighted below:

  • looking at ways to minimize supply disruptions and avoid shortages by facilitating approval and marketing of medicines using the existing regulatory framework, for example, by work-sharing and reduced timetables when possible;
  • developing strategies to improve prevention and management of shortages caused by disruptions in the supply chain, for example, for developing guidance or companies on reporting of shortages;
  • encouraging best practices within the pharmaceutical industry to minimize the risk of shortages;
  • improving sharing of information and best practices among EU regulatory authorities to better coordinate actions across the EU; and
  • fostering collaboration with stakeholders and enhancing communication on supply problems to EU citizens.

Brexit and the pharma industry: EMA and regulation

The UK remains a member state of the EU for the duration of the extension, and the EMA has called on all pharmaceutical companies in the EU to continue their preparedness for the UK’s withdrawal. For its part, the EMA relocated its headquarters, formerly based in London, to Amsterdam, effective March 1, 2019. Now in temporary headquarters, the EMA plans to be located in its permanent headquarters in Amsterdam by November (2019). The EU 27 member states took the decision to relocate the EMA to Amsterdam in November 2017, and the new EMA headquarters building was commissioned and began construction in May 2018. The EMA’s temporary headquarters, provided by the Dutch government, opened in January 2019 to allow EMA staff to move in before finalizing the EMA’s move into Amsterdam by the end of March 2019 to ensure EMA’s business continuity in Amsterdam until its new permanent building is ready.

Brexit, however, has not come without changes in staffing, resource allocation, and policy priorities for the EMA. In 2018, the EMA implemented a Brexit Preparedness Business Continuity Plan to ensure sufficient resources remained available for the evaluation and supervision of medicines activities as it dealt with the EMA’s relocation and resources needed to support that relocation. The EMA said in its recently released annual report for 2018 that 82 staff members were allocated to work full-time on Brexit and relocation preparation.

 EMA Rasi

Guido Rasi, MD
Executive Director
European Medicines Agency

”With the plan, we were able to protect all activities directly related to the evaluation and supervision of medicines as well as our core public health activities,” said EMA’s Executive Director Guido Rasi, in the agency’s 2018 report, which was released May 2, 2019. “However, we had to make cuts elsewhere. And while these cuts have focused mainly on suspending or postponing activities that will not have an immediate impact on public health, we cannot rule out a longer-term impact on this Agency unless the commitment is made to invest the necessary resources again in future.”

The impact across the EMA stemming from a shift in resources to Brexit-related activities can be seen across several areas, such as guideline development, interaction with stakeholders, communication, transparency initiatives, and staffing. “Overall staff annual turnover is still comparable to what we have seen in previous years, but the number of resignations in that figure is now greater than before,” said EMA Deputy Executive Director Noel Wathion, who has led EMA’s operational and relocation preparedness activities for Brexit since the outcome of the UK referendum in June 2016, in the EMA’s recent report. “However, the biggest staff losses will be seen in the first half of 2019. We remain optimistic, though, that we will be able to fill any vacancies quickly as recent recruitment efforts have shown that a lot of qualified people are interested in coming to Amsterdam and working for EMA.”

The EMA said that it had to put on hold a total of 119 guidelines and other guidance documents due to Brexit-related priorities. This included a guideline on the comparability for advanced therapy medicinal products (i.e., cell and gene therapies) relating to manufacturing changes during product development. Progress in implementing EMA’s policy on clinical data publication was halted in August 2018. Pending applications were completed and the publication of clinical data from new applications was suspended thereafter. In 2018, due to resource constraints, the EMA began work on only one of the six actions contained in its action plan to improve medicines product information: the electronic product information for medicines across the EU. The EMA said that work on the other areas, aimed at improving content and user-testing, will begin once resources are made available.

Brexit notwithstanding, the EMA is also moving forward with a larger agency plan to advance regulatory science in the agency as a means to keep pace with product innovation and technology in the industry. In December 2018, the EMA put forth for public input its strategic priorities on regulatory science for the agency to 2025. Regulatory science includes all scientific disciplines that are necessary to assess the quality, safety and efficacy of medicines and to inform regulatory decision-making throughout the lifespan of a medicine. The strategy provides a plan for advancing regulatory science over the next five to ten years, covering both human and veterinary medicines. It seeks to offer informed guidance on modern medicines development and facilitate the optimization of regulatory activities and the assessment of the benefits and risks of innovative therapies and diagnostics. The EMA’s plan, which included input from stakeholders through two workshops, will become part of the European Regulatory Network Strategy to 2025, which will be developed together with the EU member states and the European Commission. Brexit impacted the resource allocation that the EMA could apply to this project. The plan factors in the staffing impact that Brexit-related activities has had in terms of turnover of existing expertise, consequent replacement opportunities, and the new expertise needed, including training. “Brexit has meant that the Agency needed to focus its efforts on providing training that will ensure transfer of knowledge to deal with staff losses. However, other courses had to be suspended, limiting the Agency’s ability to keep its staff at the cutting edge of science,” said the EMA in its report.

The EMA also said that its Brexit-related activities has impacted its communication with stakeholders and transparency initiatives. In 2018, the agency reduced the levels at which it implemented its frameworks for interaction with stakeholders, reduced the number of stakeholder meetings, temporarily suspended annual bilateral meetings with industry stakeholders, put on hold on an industry survey it had planned, eliminated an annual training session for patients and healthcare professionals involved with the EMA, and reduced external stakeholder events. In addition, collaboration at an international level was also scaled back in 2018, with activities cancelled or postponed in order to focus primarily on product-related requests and supply-chain integrity. Also, in other areas, such as international harmonization of technical requirements and collaboration between regulatory authorities, the EMA said it had to switch from an active or leadership role to a more reactive position.

The EMA has also had to adjust for the loss of the UK’s MHRA as part of the European medicines regulatory network, a partnership between the EMA, the European Commission, and 50 medicine regulatory authorities in the EU and the European Economic Area. In April 2018, in preparation for the UK’s withdrawal from the EU, the EU 27 member states and the EMA completed the reallocation of the medicines for which the UK’s MHRA and Veterinary Medicines Directorate were rapporteur or co-rapporteur. Over 370 centrally authorized products were transferred to new rapporteurs and co-rapporteurs from the EU 27 member states plus Iceland and Norway.

Brexit-related work also impacted several information technology (IT) initiatives. Resources normally used for innovative IT projects and change were channeled toward a number of critical projects related to the EMA’s move to Amsterdam, including relocation of the EMA data center to outside the UK and the introduction of a new offshore IT application maintenance model. Many IT upgrades were also postponed due to resource reallocation into Brexit-related projects.

Leave a Reply

Your email address will not be published. Required fields are marked *

Recent Feature Articles

The CDMO/CMO & Suppliers’ Report: The Rising Strength of Tides

Double-digit growth is projected for the markets for peptide and oligonucleotide synthesis, creating opportunities for CDMOs/CMOs.

The Financial Squeeze on Emerging Pharma and Early-Stage Innovation

Access to public or private funding remains an existential challenge to fuel early-stage innovation as the biotech industry seeks to recover from a constrained financial & deal-making environment.

Small-Molecule Drugs: Top 10 Market, Sourcing, and Supply-Chain Trends

What are key trends and issues that are on the industry’s radar for small-molecule drugs? DCAT Value Chain Insights examines market share, growth rates, product innovation, and API supply chains.

FDA’s Draft Guidance on Platform Technology Designation: The Mfg Impact

The FDA has issued much-awaited draft guidance that details how it plans to implement its new platform technology designation program. What does it mean for manufacturing overall and in specific sectors—biologics and advanced therapies?