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EMIG survey finds growing Brexit concerns among life sciences companies

Concerns life sciences companies have about the potential impact of Brexit are growing, according to a recent survey carried out by an industry association.11 Jul 2018

The Ethical Medicines Industry Group (EMIG) surveyed 50 of its members in June and found that industry's Brexit concerns around higher prices for drugs, and reduced availability of, and delayed access to, medicines on the NHS, had increased since an earlier survey conducted in February this year.

Those surveyed were asked what they believe the impact of not delivering a ‘good’ deal for the UK pharmaceutical industry will have. More than 60% of respondents mentioned higher prices for medicines and medical devices; 70% said fewer medicines and medical devices available on the NHS, and; more than 90% said delayed access to medicines and medical devices through the NHS. All three statistics were up from EMIG's Brexit barometer from Q1 2018.

Brexit expert Guy Lougher of Pinsent Masons, the law firm behind Out-Law.com, said the results of the latest EMIG survey were consistent with the findings of a YouGov survey undertaken on behalf Pinsent Masons in January and February this year.

According to the YouGov survey, of 100 FTSE350 companies, 51% of board members said that their business had already triggered Brexit contingency plans drawn up for a ‘no-deal’ scenario. A further 29% of the board members surveyed said that they expected to have triggered their Brexit no-deal contingency plans by the end of September 2018.

The YouGov survey also identified "the critical role" that General Counsel, the most senior legal advisors within a company, are expected to play in relation to Brexit planning, Lougher said. General Counsel were seen as a strategic advisor on Brexit by 57% of the board members surveyed, and 25% said that they would welcome an even greater role for General Counsel. In addition, 61% of the board members surveyed saw the General Counsel’s role as being responsible for Brexit scenario planning.

The survey also found that 70% of FTSE350 board members expected their legal team to have shared a detailed legal risk assessment with them by the end of June 2018.

Lougher said: "The survey indicates that for some businesses they have already reached the point when they need to take concrete decisions about whether and how to organise themselves for a Brexit no-deal scenario. We expect that in the autumn there will be a significant increase in the number of businesses that need to take such decisions, some of which will be potentially irrevocable, even though there may not be complete certainty about the terms of a future trading relationship between the EU and the UK. It is clear that time is fast running out."

Leslie Galloway, EMIG chairman, said a lack of clarity on the future business environment post-Brexit is a major issue for life sciences companies.

"Uncertainty kills investment and, as the year has progressed, we have witnessed the almost weekly yo-yo effect of hard and soft Brexiteers swapping their dominance of the political agenda," Galloway said.

"Larger companies have been preparing for the risk of a hard Brexit for some time and that is because they have greater financial, people and skill resources. Smaller companies are wary of spending precious resources when there is a possibility that it might not have been necessary. However, we are closing in on decision time and, for some, it might just be too late if the worst type of Brexit happens," he said.

Galloway said life sciences companies want the UK government to secure post-Brexit access to the European Medicines Agency's (EMA's) regulatory environment, whereby the UK's Medicines and Healthcare products Regulatory Agency (MHRA) would work with and for the EMA.

In addition, the companies want access to the EU's single market and for the UK to remain part of the customs union, Galloway said. He said that being outside the customs union could result in "shortages of vital medicines" in the UK. Life sciences companies are also eager that Brexit does not impinge on their ability to access "people with essential skills" to fill their workforce.

"The industry is truly global and this is to the benefit of patients in the UK and the EU," he said.

Recently, the European Medicines Agency (EMA) and European Commission issued joint Brexit guidance which set out their view of the regulatory position on UK-manufactured medicines post-Brexit.

They said "medicinal products manufactured in the UK will be considered imported medicinal products" and that UK drugs companies would need to "specify an authorised importer established in the Union (EEA)" and further "specify a site of batch control in the Union (EEA) where each production batch can undergo upon importation a full qualitative analysis, a quantitative analysis of at least all the active substances and all the other tests or checks necessary to ensure the quality of medicinal products in accordance with the requirements of the marketing authorisation".

Existing UK based sites of batch release must be transferred to a location within the EEA from the point of Brexit, while only EEA-based authorities would be able to carry out batch release control activities unless the UK is "officially recognised by the EU for mutual recognition of batch release", they said.

Despite those requirements, more than 45% of the respondents to the EMIG survey said they are not establishing new batch release testing facilities.

At the time, Dublin-based Karen Gallagher of Pinsent Masons said the guidance highlighted the increasing focus being given to the "practical implications" of the UK's withdrawal from the EU for businesses in the pharmaceutical sector by both the companies themselves and regulators and that it should prompt pharmaceutical companies to "take positive steps now to prepare for a situation whereby the UK becomes a third country on 30 March 2019".

Gallagher said UK pharmaceutical companies could look to Ireland to account for the impact of Brexit. She said the Health Products Regulatory Authority (HPRA) in Ireland issued its own Brexit guidance document in January 2018.

"In recognition of the central role Ireland is likely to play for UK pharma companies requiring an EU base, the HPRA has highlighted that it is 'willing and prepared' to take over the role of reference member state for such companies, and that it is ready to work with companies who need to transfer operations to Ireland in order to access the EU market. The HPRA has also said that it plans to continue to work with the UK after Brexit to help to maintain dual labelling for products sold on both the UK and Irish markets, where possible," Gallagher said.