Will A Brexit Transition Period Meet The Needs Of UK Industry?
Executive Summary
As negotiators prepare to discuss a Brexit “transition period,” the UK and European parliaments have again been debating options for addressing the potential impact on the pharmaceutical supply chain.
A post-Brexit transition period such as that outlined in the EU’s newly adopted negotiating directives would, if agreed, seem at least in the short term to allay some of the concerns expressed by the life science sector over the need to preserve the current arrangements on medicines regulation and trade so as to minimize any disruption to supply chains after the UK leaves the EU.
The EU’s stance, announced by the European Commission’s chief negotiator Michel Barnier on Jan. 29, is that from the end of March 2019 to the end of 2020, all the current EU acquis – i.e., all legislative, regulatory, legal and budgetary structures, including the competence of the Court of Justice of the EU – would continue to apply to the UK. In addition, the UK would not be allowed to take part in the EU institutions or decision-making processes.
The UK would also continue to participate in the customs union and the EU single market, so it would have to comply with EU trade policy and customs duties and checks, and would not be able to “become bound” by any new international agreements “unless authorized to do so by the EU.” The “four freedoms” – of movement of goods, people, services and capital – would continue to apply.
Seeking a Brexit transition period “is a welcome next step as the UK negotiates a new relationship with the EU” – ABPI
This would presumably leave current EU drug regulatory arrangements intact during the transition period. Asked about the EU’s position, the Association of the British Pharmaceutical Industry told the Pink Sheet that “this week’s confirmation from the Commission that the EU’s negotiating directives will include seeking a transition period in Brexit negotiations is a welcome next step as the UK negotiates a new relationship with the European Union.”
The ABPI said such a period was “essential to allow companies enough time to make the necessary changes to marketing authorisations and to their supply chains and ensure UK and EU patients experience no disruption to their access to medicines.” In the interest of 500 million patients in Europe, it said, “resolving customs issues and securing continued UK/EU regulatory alignment on medicines must be a priority in the next phase of the negotiations.”
The question is whether the UK government will agree to the terms proposed by the EU, given the likely backlash from strong Leave supporters who have said such arrangements would represent “Brexit in name only” during the transition period.
UK Health Committee On “No-Deal” Brexit
The transition period and the potential effects of Brexit on the life science sector were discussed at two more parliamentary meetings last week.
In its latest hearing as part of its Brexit inquiry, the UK House of Commons health select committee examined what might happen to the supply chain in the event of a disruptive “no-deal” Brexit.
Lord O’Shaughnessy, parliamentary under-secretary of state at the department of health and social care, said it was important to ensure that patients were not disadvantaged in their access to medicines and medical devices, and that there were “no additional burdens and barriers to industry, so that they are happy to bring their products to the UK.”
Ernst & Young “will be speaking to companies to get the information and their insights about what their concerns are” – Lord O’Shaughnessy
He said there was “work going on with our agencies across government to work out what that looks like, but I am not at a point where that is something that we are able to share.” In something of an understatement, he said the government wanted to “give that transparency as soon as we can, because there is a degree of uncertainty – particularly felt by industry, but not just industry – about what that will look like.”
Lord O’Shaughnessy added that the DH had commissioned an analysis of medicines supply chain issues from consultancy Ernst & Young, which “will be speaking to companies to get the information and their insights about what their concerns are. We are undertaking that work as we speak, or, indeed, it is about to start,” he declared.
This “very detailed piece of work” would collect “commercially confidential information, so you will understand that publication of that would be restricted, but it may be that we are able to provide [the committee with] a summary of that,” he said.
The European Medicines Agency is conducting its own survey aimed at gauging industry’s preparedness for Brexit and is urging companies to respond. The agency says it will use the feedback to formulate recommendations on how it should deal with additional regulatory burdens as a result of Brexit and how to identify any centrally authorized products that might be at risk of shortages. (Also see "Industry Response To Brexit Survey Key For Future Planning, Says EMA" - Pink Sheet, 29 Jan, 2018.)
In the meantime, life science companies are still unclear as to whether or when they will need to begin putting contingency plans in place to deal with the possible consequences of a “no-deal” Brexit. Asked when the committee might be given further details of exactly what is being put in place, Lord O’Shaughnessy said he was “not able to give a date, I am afraid, at this point.”
Health and social care secretary Jeremy Hunt told the hearing that “all companies have to prepare for all eventualities. There may be eventualities where having a small European office helps them secure rapid approval for the European market, but when you talk about patients, I think we are really talking about British patients, who are our primary responsibility, so we need to make sure that there is continuity for supply chains.
As for the transition period, Hunt said “I am very confident that we are going to have that transition deal, and, as I say, there are a few final stages. But, as far as the UK is concerned, we have made it very clear that we want to agree to specify how that transition deal will work as quickly as possible, because the value of a transition deal shrinks the closer you get to March 2019.”
“What Does UK Want?”
Addressing a meeting of the European Parliament’s environment and public health committee (ENVI) last week, the president of the parliament, Guy Verhofstadt, said it was preparing a resolution on how it sees the future UK/EU relationship in areas including medicines supply. “In my opinion there are five key questions to answer in our March resolution,” Verhofstadt said, including “how to ensure rapid access to safe medicines in the UK and the EU27 in future once the UK is out of the EU. How do we secure this?” he asked.
Verhofstadt said the resolution would be presented at the parliament’s plenary session in March, and it was “absolutely key” that the ENVI provided parliament with input on “everything regarding public health, environmental standards, food safety etc.”
“The pharmaceutical industry have been in this parliament in their droves trying to stress to us their need to stay within the current regime” – MEP Mairead McGuinness
Some MEPs at the meeting expressed frustration with the lack of a clear UK government position on the future relationship, with Irish MEP Mairead McGuinness asking what Brexit would mean for “integrated trade” in medicines. “What does the UK want?” she asked. “The more I speak to UK colleagues, the more I hear they want to stay as close as possible – but how that will be achieved, that is the question.”
McGuinness said there were “real patient safety issues if there is any divergence from the current system, and I mean any divergence. The pharmaceutical industry have been in this parliament in their droves trying to stress to us their need to stay within the current regime,” including the EMA, she said. “The problem is we are trying to negotiate in a vacuum, we have no idea what the UK really wants.”
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From the editors of Scrip Regulatory Affairs.