Japanese drugmaker Shionogi plans to pack up its European headquarters in London and move it to Amsterdam, reportedly in preparation for the UK’s withdrawal from the European Union, according to a news report.
British business newspaper The Financial Times reported the news Monday, citing unnamed people briefed on the matter, though the company declined to comment. The move will involve merging Shionogi’s UK operations with a Dutch subsidiary and is not expected to create significant movements of staff, but it would involve financial dividends bypassing London, it was reported.
In preparation for Brexit, which is scheduled to take place March 29, the European Medicines Agency – the counterpart to the Food and Drug Administration for the EU and European Economic Area countries of Norway, Iceland and Liechtenstein – also relocated its headquarters from London to Amsterdam.
The FT noted that Shionogi’s move to London five years ago was praised by then-mayer Boris Johnson. Ironically, Johnson was a leading proponent of Brexit.
Despite the expectation that the withdrawal will occur on March 29, there is still no deal in place to ensure that it occurs in an orderly fashion. However, UK Prime Minister Theresa May faces significant challenges getting a deal passed in Parliament, and an attempt to do so failed in January. Another possibility is that Brexit could be delayed, but this too faces opposition from the withdrawal’s proponents. Parliament is expected to vote on a deal again Tuesday, though British lawmakers are reportedly still divided, while talks between the UK and EU are deadlocked.
An analysis last month by Fitch Solutions indicated that drugmakers are nervously anticipating a “no-deal” Brexit, whereby the country would exit the EU without any agreement with the bloc on trade or other relationships. Economists say that leaving without a deal would cause significant harm to the British economy.
For drugmakers, according to the Fitch analysis, there are fears of short-term disruptions to supply chains and longer-term regulatory problems. The regulatory issues include growing divergence in regulations between the EU and the UK, which will be governed by its own regulatory agency, the Medical and Healthcare products Regulatory Agency, or MHRA.
While Switzerland also has its own regulatory agency, Swissmedic, it includes provisions like expedited approval of drugs already approved by major regulators. By contrast, if the UK selects a go-it-alone approach with the MHRA, it risks leaving the UK less attractive as a location for product launches given the small size of its market.
In response, some have begun stockpiling drugs, including Swiss drugmakers Novartis and Roche, Danish drugmaker Novo Nordisk and US-based Merck & Co. British drugmakers are also making contingency plans – AstraZeneca said it would freeze UK investment and increase stockpiles, while GlaxoSmithKline would transfer marketing authorizations and amend packaging, leaflets and licenses, while both are duplicating testing facilities.
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