The Big Deal Behind the ‘No-Deal’ Scenario

Editor’s Note: This article was published in Pharmaceutical Technology Europe’s September 2019 print issue.

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As the pharmaceutical sector is one of the United Kingdom’s most productive industries (1), extensive investigations into the potential impact Brexit may have on the sector and significant work into contingency planning for a ‘no-deal’ scenario have been made. Contingency measures to avoid disruption to the supply of medicines, such as stockpiling of medicines, changing supply routes, duplicating drug testing, and transference of medicine licences, are underway by the pharmaceutical industry, according to the Association of the British Pharmaceutical Industry (ABPI) (2).

However, despite preparative works and planning for every potential outcome of Brexit come 31 October 2019, there are a number of factors that remain outside of the control of industry. Additionally, ‘unpicking’ the intricacies of the relationship between the UK and European Union for medicines regulation and trade, a relationship that has been forged over decades, will undoubtedly give rise to challenges for pharmaceutical companies, both in the European region and around the world.

An integrated framework and disruption of ‘no-deal’

“The pharmaceutical industry shares a regulatory framework with the EU,” explains Munira Wilson, corporate affairs director, Merck UK & Ireland. “It relies on integrated supply chains, an internationally diverse workforce, and a pan-European approach to research collaboration. All these aspects of the pharma business will be impacted by Brexit, regardless of whether the UK departs from the EU with or without a deal.”

Despite the benefits for the UK to leave the EU with a deal in place, such as the transition period that would afford the industry, regulatory bodies, ports, and governments time to prepare for the potential new relationship between the UK and EU, it is looking ever more likely that the Brexit scenario will be that of ‘no-deal’. “A no-deal Brexit could potentially lead to significant short-term disruption, particularly at ports,” asserts Wilson. 

Former Prime Minister Theresa May’s three attempts to pass a Brexit deal-that was agreed upon with the EU-in the UK parliament were to no avail and she resigned in June 2019 (3). May’s successor, Boris Johnson, is well-known to be insistent on the UK leaving the EU by 31 October 2019, be that with or without a deal (4). So, in light of the increased probability of a ‘no-deal’ scenario, preparations are becoming more important, with both the UK and EU set to experience disruptions.

“In terms of public health, an ongoing close and collaborative relationship on systems and processes is particularly important,” stressed Wilson. “For example, collaboration is paramount on EU pharmacovigilance systems and databases, the European Databank on Medical Devices (EUDAMED), EudraVigilance, and the European Centre for Disease Prevention and Control.”

Avoiding a disorderly exit and preparations

“Like all businesses, we hope that a disorderly Brexit will not happen,” continues Wilson. “However, not preparing for such an outcome would be negligent, because ensuring that patients get the medicines they need is a top priority.” A sentiment vehemently supported by industry bodies within the UK, such as the ABPI and the UK BioIndustry Association (5).

Both the pharmaceutical supply chain and regulatory environment are set to be affected as a result of Brexit, Wilson explains, although the extent to which these areas are impacted depends on the nature of the future economic partnership that is agreed upon between the UK and the EU. In terms of an area that may experience a significant amount of disruption, she states that the regulatory environment within the UK could be detrimentally affected. “This impact will probably be seen due to the fact that the rest of the EU will continue to regulate medicines through the European Medicines Agency, which has relocated to Amsterdam, whereas the UK will likely end up with ‘third country’ status,” Wilson says. “However, the pharma industry is very clear that the UK government’s stated position of seeking associate membership of the EMA is the preferred regulatory position post Brexit.” 

Many pharmaceutical companies are well underway in terms of preparing for Brexit, albeit with negative undertones in some instances where manufacturing investments have been frozen for example. However, for a lot of companies, preparations have included stockpiling and putting transportation arrangements in place. As reported by The Pharmaceutical Journal, a third of manufacturers affiliated with the British Generics Manufacturers Association have booked additional ferry capacity to ensure their medicines will be transported between the UK and EU should there be a ‘no-deal’ outcome (6).

“Like many others, Merck has built up its contingency stock and is planning for re-routing of supply if necessary, in the event of a no‑deal Brexit, which could lead to significant disruption at ports,” Wilson adds. “The Department of Health & Social Care has issued a lot of guidance on this matter and is in regular contact with most (if not all) companies.”

Respecting the referendum outcome

“Merck certainly respects the outcome of the referendum,” Wilson asserts. “However, at the same time, it is important for patients and for our business that Brexit takes place in an orderly fashion.” 

Regarding transition arrangements, Wilson explains that ideally any government plans should be put in place as soon as possible, so that sufficient time is allowed for all parties involved to prepare for whatever future partnership is subsequently negotiated. “Obviously, the number one priority for all involved should be to mitigate against any disruption of supply of medicines to patients,” she concludes.

References

1. House of Commons Business, Energy, and Industrial Strategy Committee, “The Impact of Brexit on the Pharmaceutical Sector,” Report, publications.parliament.uk, 8 May 2019.
2. ABPI, “‘No-Deal’ Brexit,” Information Page, abpi.org.uk[Accessed 16 Aug. 2019].
3. The Guardian, “Theresa May Announces She Will Resign on 7 June,” theguardian.com, 24 May 2019.
4. BBC, “Boris Johnson: What is His Brexit Plan?” bbc.co.uk, 23 July 2019.
5. PharmTech, “Industry Responds to UK Government Planning for ‘No-Deal’ Brexit,” PharmTech.com, 28 June 2019.
6. C. Wickware, “One in Three Generic Manufacturers Opt to Arrange their Own No-Deal Brexit Ferry Transport,” pharmaceutical-journal.com, 9 August 2019. 

Article Details

Pharmaceutical Technology Europe
Vol. 31, No. 9
September 2019
Pages: 46–47

Citation 

When referring to this article, please cite it as F. Thomas, “The Big Deal Behind the ‘No-Deal’ Scenario,” Pharmaceutical Technology Europe 31 (9) 2019.