What Now After Brexit Delay? UK BioIndustry Association Asks
Executive Summary
Steve Bates, CEO of the UK BioIndustry Association, tries to untangle the increasingly chaotic Brexit process and establish how the various scenarios might pan out for the life sciences industry.
Amid frantic conjecture over whether the UK will leave the EU without a deal, the UK BioIndustry Association is trying to ascertain whether the government’s expectations of life science companies have changed following the EU’s decision to postpone the Brexit date.
“They haven’t told us anything yet,” BIA CEO Steve Bates said, noting that the association was seeking “quick and clear communications” from the government and expected something to materialize this week.
“We hope we will get clarity from the government” on what the delay means for the sector in practical terms, specifically in areas like medicines stockpiling and contingency planning in the event of a no-deal Brexit, Bates said during a Brexit webinar on March 22. “In lieu of being told what to do, I am keeping going on the basis that we need to work towards all contingencies with simply a different date.”
The March 29 Brexit date was changed by the EU last week after the Speaker of the House of Commons told prime minister Theresa May that she could not hold a third “meaningful vote” on her withdrawal deal unless it was substantially changed. If the deal is eventually passed by parliament, Brexit will happen on May 22, and if it is not, the date will be April 12.
In an unprecedented move, parliament on March 25 was expected to attempt to wrest control of the Brexit process from the government by holding a series of cross-party “indicative votes” on what direction should be taken should the deal not be passed.
“Will that happen? Who knows?” Bates said. It could result in a number of outcomes, such as the UK becoming “something like Norway” (not an EU member but in the single market and paying money into the EU budget). That might lead to a call for a longer delay or revocation of the Article 50 process, Bates said. “Could the prime minister continue in that scenario?” he asked.
There may be a third meaningful vote this week, provided the prime minister is sure there is a majority in favor of it, but this is far from certain. Bates said “there may be an impact on the prime minister if she loses that vote like she has with the last two. I can’t give you any more clarity on this, it is about as far as the crystal ball goes.”
On the other hand, if MPs backed Theresa May’s deal – which some have suggested they might do if she agreed in return to step down as prime minister – that “gets the numbers in parliament,” he said. However, that would “lead rapidly to a Conservative party leadership contest where perhaps some of the positions we have seen outlined by leading members of the Cabinet would become more important and this could lead to a further dynamic for our sector that we would need to watch.”
In A No-Deal Scenario
If no deal was agreed, there could be a “cliff edge” exit on April 12 with no transition period, although Bates suggested there might be “some last-minute bits and bobs agreed around a ‘managed no-deal’ exit, a couple of deals to keep the lights on.”
In such an event, the life sciences industry does at least have some idea of how to continue operating, thanks to guidance from the European Medicines Agency and technical notes and guidelines from the government and the UK Medicines and Healthcare products Regulatory Agency. Bates also noted that “Operation Yellowhammer” – a program of no-deal civil contingency measures – had been due to kick in on March 25, but “we don’t know whether that has been delayed. My guess is it will come into effect a week before Brexit.”
If A Deal Is Done
If a deal were to be agreed, the UK would leave the EU on May 22, with a transition period to at least the end of 2020, during which time companies would continue to be regulated as at present. Discussions would immediately begin on the future relationship between the UK and the EU, which Bates noted would decide the future operating environment for the sector.
In this event, the future relationship discussions “could happen quite speedily across the summer” and “we would advocate for our issues to be first in the queue, and for our positions to be adopted,” Bates said.
The BIA would also want to “turn the words in the political declaration into reality,” and get an “early win,” he said (the political declaration is a short outline of what the UK and the EU want to see in their future relationship if a deal is agreed). The association would focus in particular on cooperating with EU agencies like the EMA, taking part in EU science and innovation programs, and possibly having a relationship with the European Investment Bank.
Further Delay, Or No Brexit?
There are other options on the table too, such as a further delay in Brexit beyond April 12 or May 22 to allow some other solution to be sought (for example, whatever emerged from the indicative vote process). However, this would cause yet more problems because the UK would remain an EU member state and would probably have to put forward candidates for the European Parliament elections in late May.
In this case, the BIA would expect communications from the government on what this meant for medicines supply and the contingency and planning program, and this would depend on the length of the delay, Bates observed. “In this scenario we would continue to keep people informed.”
Another possibility is that the UK could unilaterally revoke its Article 50 notification and stop Brexit altogether. This has hitherto not been seriously discussed at the political level, but the idea could be gaining some traction after an online petition to parliament garnered a record five million-plus votes supporting such a move if a no-deal exit looked like becoming a reality.
Regulatory Details
On the regulatory front, the BIA’s Brexit lead, Laura Collister, noted that two of the many no-deal statutory instruments (SIs) that the UK has produced – those on medicines and clinical trials – have now been approved. (Also see "Pharma Uncertainty Remains As UK Votes To Delay Brexit " - Pink Sheet, 15 Mar, 2019.)
In addition, the MHRA has published about 30 of the promised 80-plus documents and guidances on what would happen in a no-deal situation. “They are not perfect, but given the timing a lot of regulatory people are just concentrating on understanding and implementing those documents, and we expect that in a no-deal Brexit we would pick up these issues and work closely with the MHRA.”
The government’s Office for Life Sciences has been providing regular updates on regulatory developments and has set up a landing page for industry that contains all the relevant guidance. In a no-deal situation “the OLS will be our route into government” and “they will seek to bring information from across government to life science companies as they need it,” Collister declared.
She also noted that the government had provided some additional information through its no-deal medicines supply contingency program, and she encouraged companies to engage with the program. The ferry booking system for companies to use to help avoid blockages at UK ports has now gone live, and companies that have registered with it should have received some information on that.
The government, through that program, has also written to companies to say: “Please continue the work you are undertaking to prepare your organisation for leaving the EU without a deal and do not wind down your contingency plans at this stage.”
From the editors of Scrip Regulatory Affairs.