More than 900 days have passed since the U.K. voted to leave the European Union. Over that period, the legislative and regulatory machinery in the EU and, in particular, U.K. has slowed down to enable the debate and negotiation of Brexit. Despite that, the outlook today is more uncertain than on any of the preceding 900 days. Looking forward to 2019, it is very unclear how Brexit will affect biopharma.
This time last year, I predicted 2018 would end with “a fudged agreement that buys both sides time.” In some ways, that prediction has proven to be accurate but it implies a level of stability that the U.K. government has failed to deliver.
The U.K. and EU struck agreements detailing the terms of the divorce and sketching out their ongoing relationship earlier this year. Given the agreements left key questions such as the future of the U.K.’s relationship with the European Medicines Agency (EMA) unanswered, they could be seen as fudging the details to buy time. However, that plan came unstuck when it encountered the U.K.’s parliament.
Politicians were due to vote on whether to accept the agreements on Dec. 11. With more than 100 politicians in her own party expected to vote down the deal, Prime Minister Theresa May looked set to suffer a heavy defeat that would have thrown the fate of the agreements and Brexit itself into doubt. Instead, May postponed the vote the day before it was due to take place and vowed to return to the EU in search of a revised agreement that allays the concerns of politicians and the public. The EU has consistently said the current deal is the only possible deal.
The upshot is further uncertainty. In theory, May, who recently survived a vote of no confidence, can wait until March 28 to hold the vote. In practice, the prospect of not knowing the terms of how the U.K. will leave the EU until months, weeks or even days before it happens will force the biopharma industry to step up its already advanced preparations for a no-deal exit.
Trade group EFPIA indicated as much when, on the day of May’s postponement, it sent a letter to the European Commission and member states about what needs to happen to protect patients in the event the U.K. leaves without a deal.
The prospect of the 82 million packs of medicine that cross the U.K.-EU border every month being held up at customs and not reaching patients is perhaps the worst-case scenario. This problem will also affect shipments of clinical trial materials. Recognizing that, EFPIA wants the EU and U.K. to temporarily exempt medicines and clinical trial materials from new customs checks in the event of a no-deal Brexit.
These preparations, the hundreds of millions of pounds companies have spent to relocate facilities to the EU and a host of other actions could be rendered unnecessary by the passage of a deal or the postponement or abandonment of Brexit itself. However, the inability of the British government to provide clarity and certainty means businesses need to plan for the most disruptive form of Brexit.
The EMA has advised companies to prepare as if the U.K. will leave the EU without a deal in 2019 from the first days of its work to mitigate the impact of Brexit. This work has entailed major changes for the agency, which has wound down many noncore activities to ensure it can continue functioning while dealing with the job losses and disruption associated with its move to Amsterdam.
Despite that, the EMA’s move to Amsterdam is going more smoothly than the U.K.’s exit from the EU. As of the start of the October, all of the EMA’s relocation activities were on track, although the financial, legal and governance side of the move was a little behind schedule. The progress means the EMA’s temporary home is set to be fully operational at the start of next year.
Beyond that, EMA expects to finalize the relocation of its staff by the end of March and have its new permanent home fully operational by mid-November. What happens in the U.K. next year is anyone’s guess, with everything from a no-deal Brexit to a second referendum that could keep the country in the EU on the table.