Japan to U.K.: Keep EMA post-Brexit, or our drugmakers may move R&D to mainland Europe

Japan has warned the United Kingdom that its drugmakers may refocus their R&D activities on mainland Europe following Brexit. In a 15-page letter, Japanese officials told their U.K. counterparts that if the European Medicines Agency (EMA) leaves London, the R&D budgets of biopharma companies may follow the regulator.

The warning is the clearest, most official indication yet of how foreign drug developers may respond to the redrawing of the lines between the U.K. and the European Union. As it stands, U.K. politicians in charge of making Brexit happen have only spoken in very vague terms about how they foresee the relationship changing. But the task force set up by the Japanese government following the Brexit vote has already made specific requests--and threats--on behalf of its biopharma industry.

“If the EMA were to transfer to other EU Member States, the appeal of London as an environment for the development of pharmaceuticals would be lost, which could possibly lead to a shift in the flow of R&D funds and personnel to Continental Europe,” the task force wrote. “This could force Japanese companies to reconsider their business activities.”

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The task force wants the U.K. and EU to agree to keep the EMA headquarters in London, but, while most aspects of post-Brexit Britain are still undefined, it is unlikely the wish of Japan’s task force will be granted. Multiple European countries are actively lobbying to become the new home of the EMA post-Brexit. And there is no sign the U.K. or EU see it as possible--or desirable--to keep the regulator in London. Unless attempts to derail Brexit succeed, the EMA looks set to leave London.

Whether drugmakers from Japan and other countries follow the EMA depends, in part, on the U.K. government’s ability to persuade them it can create a favorable R&D and commercial environment outside of the EU. Part of the historic appeal of the U.K., for biopharma and other industries, is its suitability as a gateway to the rest of Europe. The unsaid assumption in Japan’s warning is that if the U.K. loses its status as a gateway, it will have little to differentiate it as a location for drug developers.

On one level, the Japanese warning is a footnote to the Brexit situation. When the U.K. government tallied up the country’s biggest investors in biopharma R&D in 2010, Eisai was the only Japanese drugmaker near the top of the pile. But, if the task force’s views are shared by drugmakers in other countries--something that is feasible given the industry’s widespread opposition to Brexit--the warning could indicate the U.K. risks losing what is left of its non-native biopharma R&D sector.

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