Hold Me Closer, UK Pharma: 2.0

Earlier this year, The Medicine Maker looked at the submissions to the UK House of Commons Business, Energy and Industrial Strategy Committee’s inquiry into Brexit and the implications for the UK pharmaceutical industry (1). Last month, the committee published their analysis of the submissions – including additional evidence obtained through interviews with key industry figures.

The report focused on regulation and the potential impact of non-tariff barriers to trade. In the section on non-tariff barriers, the report quoted Mike Thompson, Chief Executive of the Association of the British Pharmaceutical Industry (ABPI), who told the committee, “We do absolutely everything we can to get medicines to patients; I have seen us charter planes and people work through weekends. We do whatever we need to do to get a medicine to a patient. If we legally cannot get through borders or we are delayed in getting through, there is nothing we can do about it. We have been imploring people to understand that medicines are different.”

When asked about the possibility of stockpiling medicines to deal with potential delays at the border, Thompson said, “It is not possible for us.” Because some medicines only have a shelf life of 12 to 18 months, he explained that it wouldn’t be possible to “ramp up what is required to produce the sort of stock holding that is required to be able to manage this effectively.”

The committee also explored the potential for increased manufacturing in the UK to reduce the need for cross-border working and supply chains. In Thompson’s view, this did not make economic sense. “We do not have the process capability in the UK to manufacture all medicines in the UK. We do not have the plants. These plants cost tens, sometimes hundreds, of millions of pounds to invest in. Nobody is going to build it in the UK; at current values, with the devaluation of the pound, the UK is 2.3 percent of the global market. People are not going to build manufacturing plants to supply all of the medicines for the UK.”

The section concluded that onerous customs procedures would “diminish the highly productive nature of the pharmaceutical industry, act as a disincentive for further investment for manufacturing facilities in the UK, and diminish access to medicines for patients in the UK and the EU.” It as also noted that any significant friction at the border could turn the UK into a “second tier state for pharmaceutical imports.”

Regarding regulation, the committee expressed its support for the government’s plan to continue membership of the EMA after Brexit. How this might be achieved, given that there is no provision for “third countries” (those outside the European Economic Area) to participate in EU agencies, is difficult to say. The EU Parliament said in March that not having access to the EMA would not “exclude cooperation in specific cases in a strictly regulated manner requiring compliance with all relevant rules and financial contributions” (3).

Concerns were also raised over the requirement (in the absence of specific reciprocal agreements) for Qualified Persons (QPs) and Qualified Persons for Pharmacovigilance (QPPVs) to be present and resident in the EEA – along with manufacturing and testing sites. Peter Ballard of Xiromed said, “Good QPs have been at a premium for many years, to my certain knowledge, having tried to recruit replacements when people have retired. I have worked with some decidedly superannuated QPs who have carried on, out of goodwill, into their 70s. We had one chap who was absolutely first class but we just could not replace him, so he stayed on. It is already difficult to recruit good QPs.” With a finite number of QPs and QPPVs available, increased demand and no indication of a significant increase in the number of people seeking qualification, the committee raised concerns over staff shortages in the UK as qualified staff relocate from the UK to the EU.

These changes would potentially cost a large UK-based pharmaceutical company £49.6 million in implementation and £36.4 million in annual costs, according to the Office of Healthcare Economics (2).

The report ends the section on regulation by arguing, “What little benefits there may be of regulatory divergence would be greatly overshadowed by the costs and loss of markets and influence the UK would face.” The authors encourage the government to “remain aligned with standards in the EU market” and to “prioritize a form of membership with the EMA that maintains cooperation and does not require replication of manufacturing sites, testing or roles.”

To conclude, the authors said, “Any small gains [from Brexit] would be hugely outweighed by additional costs or the loss of access to existing, successful markets,” and that no-one involved at a senior level in the sector was prepared to make a positive case for Brexit for pharmaceuticals.