Pharma Braces Itself for Post-Brexit Regulatory Changes

The European pharmaceutical industry is hoping that 2018 will be a year when a number of regulatory uncertainties will at least start to be resolved. The biggest of these issues are the regulatory reverberations of Brexit, in particular, the impact on the regulatory work of the London-based European Medicines Agency (EMA) having to move, as a result of the United Kingdom’s withdrawal from the European Union, to new offices in Amsterdam.

The relocation of EMA to Amsterdam

There have already been doubts about the speed of implementation of some key pieces of approved EU legislation. Now there could be further delays to the enforcement of new laws because of the possible disruption of the transfer of EMA’s headquarters. In addition, the agency, which handles the centralized approval of new drugs and variations to their authorizations while also coordinating the regulatory activities of the EU’s 28 member states, is also drawing up new guidelines for existing legislation. 

Brexit is due to take place at the end of March 2019. But its regulatory effects will start to hit companies from early 2018, particularly those based in the UK or with subsidiaries in the country. After Brexit, the UK will become a non-EU state classified as a “third country” in EU legislation with a legal position in relation to Union rules much the same as other countries outside Europe. The country is likely to assume this new legal status only after the end of a transition period of at least two years starting in April 2019. The availability of a transition period is considered by the industry to be particularly important. “[We and other industry] organizations are of the opinion that the agreement of transitional arrangements after March 2019 will be critical in ensuring there is minimal disruption to patients receiving medicines after the UK leaves the EU,” a spokesperson for the European Federation of Pharmaceutical Industries and Associations (EFPIA) told Pharmaceutical Technology Europe. 

Public health and economic consequences

The extent of Brexit’s repercussions on the pharmaceutical and related industries, both in the UK and the remaining EU member states, will depend on the final deal reached in the current UK–EU negotiations on withdrawal and whether a free trade agreement (FTA) is included. A deal is due to be achieved by October 2018 to give the European Parliament and the 27 members states time to approve it. One outcome could be that the UK and its licensing agency, the Medicines and Healthcare products Regulatory Authority (MHRA), will continue to be involved in the EU’s medicine approval and other public health activities in much the same way at present. 

Under this scenario, Brexit’s public health and economic consequences would be “minimal” for both the EU and the UK, according to a report (1) on the public health implications of Brexit, completed in November 2017 by the London-based Office of Health Economics (OHE), a consultancy partly funded by the pharmaceutical industry.

Two other scenarios described by OHE would involve the UK introducing a standalone regulatory system within the context of a UK–EU free trade agreement. In the absence of a free trade agreement, trading between the two would be conducted under the rules of the World Trade Organization (WTO). With both outcomes, there would be mutual recognition agreements (MRA) on good manufacturing practice (GMP) and other regulatory inspections but not of batch release processes. 

In the OHE’s worst-case scenario, the UK–EU negotiations would breakdown without a deal on public health cooperation or MRAs. Trade between the two would be controlled entirely by WTO rules.

Amidst a lack of legal certitude, UK-based companies and business are having to plan for the possible transfer of market authorizations to legal entities in the EU’s remaining 27 member states or for the application for new authorizations, which would be among a number of additional burdens on EMA before and after Brexit.

Pressure on EMA activities

The agency has been given 16 months to complete the move of its headquarters to Amsterdam, which was selected as the new base on 20 Nov. 2017 by the EU member states out of submissions by 19 cities across the Union (2). Pharmaceutical companies are concerned that the 16-month period will put extra pressure on EMA’s activities, which because of Brexit complications, could be disrupted well beyond 2019. 

“The real work starts now,” said Beata Stepniewska, deputy director general and head of regulatory affairs at Medicines for Europe, representing generic drugs and biosimilars producers. “Looking to the next steps in the process, we hope that the relocation plan will be comprehensive and implemented effectively, which will provide certainty for both EMA staff and for the continuity of the work of the agency,” she told Pharmaceutical Technology Europe.

Approximately 200 of EMA’s 900 staff in London have indicated they will not be staying with the agency after the transfer. Some of these staff could have expertise that may turn out to be difficult to replace. Another problem is that the agency’s new offices in Amsterdam will not be ready for full occupation until 2020. In the meantime, some of EMA’s work will have to be done from temporary premises elsewhere in the Dutch city.

“A major concern is the uncertainty about not having a building that is ready [for full occupation],” Guido Rasi, EMA’s executive director, told a press briefing in London in November 2017 after the selection of Amsterdam for the new headquarters. “The loss of staff will not cause delays in approvals of new medicines but possibly delays in other services,” he continued. “The main challenge is not going to be the physical relocation but [assuring the continuity] of activities for the benefit of all the citizens of Europe.”

Impact on other medicines agencies in Europe

Among Europe’s medicines agencies, it will not just be EMA and the UK’s MHRA that will be working hard in 2018 to prepare for the post-Brexit regulatory changes. Agencies in the EU’s 27 remaining states and in the three non-EU countries-Norway, Iceland, and Leichtenstein-in the European Economic Area (EEA), which are also in the EU’s pharmaceuticals single market, will be taking on more regulatory, monitoring, and testing responsibilities. This will particularly be the case for regulators outside the UK if the country has to opt for a standalone regulatory status.

After being headquartered in London since its foundation in 1995, the MHRA had been taking on a disproportionate amount of rapporteur work on the assessment by EMA committees of new medicines under the centralized approval system. Now assessment tasks are being shared out more equally among specialists in the agencies of EU member states. Also, authorizations handled by the MHRA under the decentralized mutual recognition will have to be transferred to national agencies.

In addition to approximately 1000 licences granted under the EMA-based centralized system, approximately 5800 national market authorizations are held by UK-based legal entities, according to figures from EFPIA. “Where marketing authorizations holders (MAH) are based in the UK, these would need to be transferred or duplicated to an MAH in the EU27/EEA,” warns the OHE in its report (1). “The same applies for MAHs based in the EU27/EEA being transferred or duplicated in the UK.”

Supply chains and post-authorization monitoring

The UK pharmaceutical, chemical, and biotechnology sectors play a big role in intra-EU pharmaceutical supply chains in the production of starting materials and intermediates through to finished products. These supply chains are starting to be reorganized to reduce the role of UK-based producers with pharmacists in the country already reporting medicines shortages which will inevitably worsen over the next year and into 2019. The UK not only has the EU’s second highest number of GMP and other medicinal manufacturing sites but the third highest number of batch certification sites. Replacement batch release sites in the EU/EEA will have to be set up with qualified personnel. “The impact of no mutual recognition of batch release would be substantial for the EU27/EEA and the UK,” says the OHE (1).

Alterations are also likely to be needed in the monitoring of the quality, safety, and efficacy of medicines in the post-authorization stages. The UK contains the EU’s highest number of centres for conducting pharmaco-epidemiological studies. Mainly because of the centralized nature of its National Health Service, it also conducts the highest number of post-authorization safety studies (PASS), according to the OHE report (1). 

Preparing for serialization

Meanwhile, even if there was no Brexit, pharmaceutical companies would have to reorganize some of their activities in 2018 in order to prepare for the implementation of new EU legislation. A major task is ensuring compliance, by March 2019, with part of the 2011 Falsified Medicines Directive (FMD), which requires the serialization or unique identification of each medicine pack, necessitating major changes to packaging lines and distribution channels. 

“It is a very complex process including regulatory readiness to implement the safety features on packaging,” says Stepniewska. “In view of the huge amount of packages that are affected, a lot of notifications to the competent authorities are expected to be submitted already in 2018, which will create a serious challenge for the pharmaceutical regulatory system, besides Brexit.”

EMA has indicated that the implementation of the 2014 Clinical Trials Regulation, which includes new rules on the quality of investigational medicinal products, may be delayed further after being put back to the second half of 2019. Similarly, the European Commission, the EU’s Brussels-based executive, may hold back the introduction of a new strategy on Pharmaceuticals in the Environment (PIE). In a year of pre-occupation with Brexit-induced legal uncertainties, these delays may not be unwelcome among both regulators and many pharmaceutical companies.

References

1. Office of Health Economics (OHE), “Public Health and Economic Implications of the United Kingdom Exiting the EU and Single Market” (London, November 2017).

2. Council of the European Union, “European Medicines Agency to be relocated to Amsterdam, Netherlands,” Press Release 20 Nov. 2017.  

Article Details

Pharmaceutical Technology Europe
Vol. 30, No. 1
January 2018
Pages: 6–8

Citation 

When referring to this article, please cite it as S. Milmo, “Pharma Braces Itself for Post-Brexit Regulatory Changes,” Pharmaceutical Technology Europe 30 (1) 6–8 (2018).