All or Nothing at All: Brexit Update for Life Sciences Companies

A lot of ink has been spilled in projecting what Brexit (the UK’s withdrawal from the European Union) might look like, including in this space by this author. The simple fact is that we don’t know what Brexit will actually look like–especially after last week’s UK elections. However, we’re aware of some areas of concern that should be monitored by US life sciences companies.

Clinical Trials

The EU Clinical Trials Regulation (No 536/2014) is expected to be in force by October 2018 and will enable a single application for clinical trials across the EU via a single portal with an associated EU-wide clinical trials database. The expected effective date of the Regulation is prior to the UK’s expected date of exit from the EU, but it is not known if the EU-UK relationship post-Brexit would have the UK remain within the system created by this Regulation. If the UK is not within this system, US life sciences companies would face extra administrative burdens and costs associated with multi-center clinical trials in the EU and the UK.

Quality Assurance

Quality assurance in the EU is managed at the national level; each EU member state develops laws and regulations that, in turn, are based on EU Directives which set out EU-wide principles of good manufacturing practice (GMP). Medicines regulatory authorities in each EU member state carry out periodic checks on manufacturing authorization holders to ensure compliance with GMP. The UK is not expected to abandon its current GMP standard, as derived from EU Directives, and even in the event of a ‘hard Brexit,’ UK-based pharma manufacturers (including UK affiliates of US life sciences companies) would be able to continue exporting medicines to the EU and vice versa so long as the UK and EU GMP frameworks remain equivalent. To the extent these frameworks begin to diverge over time, the cost of pharmaceutical imports into the EU from the UK could increase if additional import or quality checks are required in the EU on the import of non-EU pharmaceutical products.

Marketing Authorizations

Life sciences companies situated in the European Economic Area (EEA) may obtain an EEA-wide marketing authorization through a single application submitted to the European Medicines Agency (EMA). Alternatively, those life sciences companies could obtain marketing authorization on a country-by-country basis. If, after Brexit, the UK is outside the EEA, then UK-based life sciences companies (or the UK affiliate of a US life sciences company) would not benefit from the EMA’s single application process. In that case, a separate national marketing authorization would need to be obtained for the UK, an increased administrative burden of separate applications in the EU and UK.

AGG Observations

• The exact form of the (i) UK’s withdrawal from the EU; and (ii) UK’s trading relationship after withdrawal from the EU is unknown, and can take many forms. 
• Given this uncertainty, predicting what Brexit will look like is a Sisyphean task. 
• Nonetheless, at the current time, it appears that there will be a ‘hard’ Brexit (or a Brexit that is closer to the ‘hard’ end of the spectrum), raising the possibility that the UK will be left outside certain key EU life sciences regulatory systems. Being outside of these regulatory systems would increase the cost and regulatory burden for UK life sciences companies, including the UK affiliates of US life sciences companies. 
• US life sciences companies should keep close track of such Brexit developments so they have time to adjust, if needed, their UK and EU presence, distribution channels, and supply chains.