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Survey: UK life sciences face post-Brexit apocalypse; but expert sees more shades of grey

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EU Commission President Jean-Claude Juncker and UK Prime Minister Theresa May during a meeting at the EU headquarters in Brussels, Nov. 21, 2018

Less than one-fifth of UK healthcare professionals think the UK will be an attractive destination for healthcare research and manufacturing following its withdrawal from the European Union, according to a new survey.

The survey, released Friday by London- and New York-based research and consulting form GlobalData, found that while 48 percent of surveyed professionals in the first quarter of 2018 said the country would be an attractive destination for healthcare companies to conduct research and manufacturing after Brexit, that figure has now dropped to 17 percent. Among professionals across the UK, EU and US, it’s still only 23 percent.

A GlobalData analyst attributed the precipitous drop in sentiment to negative press about Brexit’s effect on the UK’s healthcare sector over the last three months, such as stories about the National Health Service requiring stockpiling of drugs to guard against disruptions in the market. The survey was fielded to 135 GlobalData Pharma clients between Oct. 3 and Oct. 19.

The result nevertheless came as a surprise to Lincoln Tsang, a former UK drug industry regulator and now partner at London law firm Arnold & Porter. “There’s no doubt that there’s a lot of speculation and people concerned about it because nobody knows,” he said in a phone interview. “No single country with a size like the UK – which is one of the three major member states of the European Union – has decided to leave the union; it’s unprecedented.”

However, Tsang emphasized that the country still has a strong infrastructure in basic science, translational research and clinical development. “It’s unlikely that will be taken away, irrespective of whether the UK is part of the EU,” he said. The bigger question, he said, is whether the UK government will be able to replace the EU research funding to which the country’s researchers currently have access. In the end, he said, the government will have to “do the right thing,” which is replacing EU money with UK money, meaning that British taxpayers will have to foot the bill.

A related and equally important question is how drugs will be regulated and what that will do to the importance of the UK market for drugmakers.

Brexit is set to take place on March 29, 2019, and the European Medicines Agency – the equivalent of the Food and Drug Administration for the 28-nation bloc plus the three European Economic Area nations of Norway, Iceland and Liechtenstein – is moving its headquarters from its current home in London’s Canary Wharf to Amsterdam. However, under a deal between the UK and EU, there will be a “transition period” lasting through the end of 2020, during which the country will remain under EU regulations – including those of the EMA – despite no longer being a member. The UK and EU sealed the deal on Sunday, but it faces a bigger fight in the UK’s House of Commons.

What also remains uncertain is how drugs will be regulated in the UK after the transition period. Multiple scenarios are possible: The UK could remain under the EMA’s authority despite not being an EU member; its local agency, the Medicines and Healthcare products Regulatory Agency, or MHRA, could become fully independent, like Switzerland’s Swissmedic; or, Tsang said, the MHRA could form a coalition with other international regulatory authorities.

Neither of the latter two options would be easy. The coalition route would be ambitious, but it would also be highly complex and would take a long time to implement, requiring close cooperation with other agencies around the world. However, it would still be more attractive than having the country go it alone.

The go-it-alone option would have the most adverse effects. Drug companies, Tsang said, tend to go for the biggest markets first, with the US and Europe forming the first tier, followed by other developed nations. If the UK chooses the Swiss model, it will join the second or third tier because despite being the world’s fifth-largest economy – with a population of 66 million – it is not a big drug market on a global scale. “If the [MHRA] is going to be a standalone agency with an increasingly challenging market access environment, then the UK will become less attractive as a first-tier country for the initial launch,” Tsang said. Yet, even Swissmedic has provisions that allow for a lighter-touch approach to approving drugs if they’re already approved by authorities in countries with established regulatory structures, like the FDA, EMA or Health Canada.

“One would have to recognize it is a small country and small market, but in terms of economic strength is the fifth-largest economy, so I don’t think [Brexit] will destroy the UK life sciences sector,” Tsang said. “How Brexit will impact the future attractiveness of the country in basic research and clinical research, time will tell.”

Photo: JOHN THYS, Getty Images

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