The United Kingdom (UK) is scheduled to leave the European Union on 29 March 2019. Certain key aspects of the Brexit deal now seem to have been agreed upon, including a 21 month “transitional period” after the UK’s exit, but the full agreement has not yet been finalized and there is currently a risk of no deal being reached. The UK pharmaceuticals sector is a key industry seeking clarity, particularly on the following important areas:

  • Continued membership of the UK in the European Medicines Agency (EMA) regime. The EMA is the European Union (EU) body responsible for the regulation of medicines supplied in EU territories (currently situated in London; scheduled to relocate to Amsterdam next year). It is also responsible for the market authorization of pharmaceuticals across the EU and EEA-EFTA states. If the UK leaves the EMA regime on Brexit, the regulation and authorization process will likely become more costly and time-consuming because pharma companies may need to submit a separate application to gain approval for a product to reach the UK (as opposed to EU) market. Last month, the government voted on this issue and confirmed that the UK’s continued membership of the EMA should be a key priority in ongoing negotiations with the EU;
  • The status of the EU Clinical Trials Regulation. This Regulation is currently scheduled to be implemented from 2020 (i.e., during the UK’s transitional period). It will promote a uniform framework for the authorization of clinical trials across EU member states, with all applications and communications to be submitted via a single online portal (currently, clinical trials are authorized nationally, meaning that clinical trial sponsors must apply for authorization to conduct trials in each separate country). If the Regulation does not apply in the UK post-Brexit, pharma companies will need a separate UK authorization for trials they intend to progress in the jurisdiction. The government has confirmed its commitment to implement this Regulation into English law as far as possible post-Brexit;
  • The future of the Unitary Patent and the Unitary Patents Court. In April 2018, the UK government ratified the Unified Patent Court Agreement, an EU initiative aimed at developing a single European patent that would be enforceable across the different EU jurisdictions and subject to the jurisdiction of one EU led entity. In a white paper published last month, the government confirmed its intention to explore implementing the unitary patent system after its leaves the EU;
  • Continued rights of EU citizens to live and work in the UK. The pharmaceuticals industry is powered by its talented workforce, particularly in the research and development sphere, and research by recruiter DHR International published in January of this year suggests that senior applicants for pharmaceutical roles from outside the UK have dropped from 40 percent to 15 percent since the referendum due to uncertainty around Brexit. Life sciences companies will want to see a commitment by the government to ensure that this skilled workforce remain welcome in the UK post-Brexit.

On 23 August, the UK government also issued contingency guidance in the event of a “no deal” scenario. Notably, the government wrote to pharmaceutical companies that supply medicines to the National Health Service asking them to ensure they have a six week “buffer” of additional medical supplies in place before Brexit. It also issued six technical notices dealing with specific life sciences issues, confirming for example that new medicines and other medical products will have to go through separate national assessment before they can receive market authorzation to be sold in the UK (meaning that companies will need to seek double approval from both the UK and the EU).

As is clear from the above, the road to Brexit is by no means smooth and these issues will be thrashed out with intensity in the coming months to try and avoid the no-deal scenario.

It is also clear, however, that the government understands how important the pharmaceuticals industry is to the UK as a whole. The industry in the UK is worth circa £42 billion and employs around 113,000 people, many in the research and development sphere where the UK has a prestigious reputation. In 2016, current UK Prime Minister Theresa May even said that “it is hard to think of an industry of greater strategic importance to Britain.”

Equally, the industry itself continues to show commitment to the UK. Soon after the Brexit vote, GSK invested £275 million to expand its manufacturing sites. And in December 2017, the government announced its Life Sciences Sector Deal, which saw 25 global life sciences organizations pledge future investment in the UK to facilitate continued research and development and strengthen the environment for clinical trials.

The UK, it seems, remains an attractive prospect for the pharmaceuticals industry (inside or outside the EU) – and the UK government seems committed to ensuring that Brexit is as smooth and painless for the industry as possible, even if that means seeking a higher level of cooperation with the EU than it might do in other areas.