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Brexit – Patient Impact and Regulatory Disruption

There are three potential ultimate outcomes to the final months of Brexit negotiations. Each of these outcomes would have a notable impact on regulatory affairs.

November 2018

Brexit – Patient Impact and Regulatory Disruption

Britain and the European Union are entering the final stages of their divorce proceedings. A draft withdrawal agreement has now been published, with a special EU summit scheduled to ratify this on 25th November. At first glance, this should provide some much-needed certainty and reassurance for the Life Sciences industry either side of the English Channel.

However, Prime Minister Theresa May now has the unenviable task of persuading Members of the UK Parliament (MPs) to agree to the deal. Several of Mrs May’s ministers have resigned in reaction to the deal’s publication, and most political pundits are sceptical that Parliament will support the proposal.

Nevertheless, we can now discuss with greater levels of clarity and detail the likely impacts of Brexit on Life Sciences, especially in the realm of regulatory affairs. Any small change in the regulatory arrangement of medicines can of course cause disruption to supply across Europe. As we enter what may well be another harsh winter, the pressure to avoid drug shortages in the UK could scarcely be higher.

As things stand, there are three potential ultimate outcomes to the final months of Brexit negotiations. Each of these outcomes would have a notable impact on regulatory affairs.

 

1. ‘Deal.’

The current Brexit deal is ratified. This would lead to a transition period lasting from 29th March 2019 to 31st December 2020. This would allow the UK to negotiate a new trading relationship with the EU to safeguard medicinal supply in the long term.

Throughout the transition period, the UK would share the “marketing authorisation dossier of a medicinal product” of the MHRS with the EMA. This relationship would of course work both ways.

Note that the withdrawal agreement declares: “A medicinal product authorised in the United Kingdom in respect of Northern Ireland shall not be considered as a reference medicinal product in the Union.”

The passage of the deal would require UK and EU negotiators agreeing to formalising the draft deal at their November 25th meeting. Following this, Mrs May would need a majority of MPs (320) to vote through the deal in Parliament.

However, the prospect of the current deal passing looks unlikely, with a large number of Conservative MPs set to vote against it, either because they view it as a betrayal of Brexit, or because they are ‘Remainers’ who think the deal is worse than staying in the EU.

 

Because the Conservatives do not have a majority in the House of Commons, they depend on the support of the Northern Irish Democratic Unionist Party (DUP) to win votes. The DUP have said that they will not support the deal as its imposition of different customs arrangements for Northern Ireland and the rest of the UK risks breaking up the United Kingdom.

 

Mrs May might therefore need to depend on Labour MPs willing to vote against their own party’s opposition to the deal. Such MPs may conclude that breaking the party whip is preferable to a ‘No Deal’ scenario.

Any small change in the regulatory arrangement of medicines can of course cause disruption to supply across Europe. As we enter what may well be another harsh winter, the pressure to avoid drug shortages in the UK could scarcely be higher.

 

 

2. ‘New Deal.

If the deal is either withdrawn by negotiators or rejected by the UK Parliament, then Mrs May may have to resign. Whether she does so or not, the Government would undoubtedly try to negotiate a new deal with the EU. 

However, at this late stage, it is unlikely that major changes would be made to the deal. The EU believes it has given as much ground as it can. Perhaps the only notable change to the deal as far as Life Sciences is concerned might involve Northern Ireland. The current deal would see the UK agree to “to avoid diversion into the European Union of certain key medicines.” A renegotiated settlement on the Northern Irish question might alter this.

 

3. ‘No Deal.’

The political dynamics currently at play in Westminster make this scenario entirely plausible, although this is still not the likeliest outcome. Should this happen, industries like pharma will face a renewed period of uncertainty and there may be a genuine threat to medicinal supply.

The UK Government has already asked pharmaceutical companies in the UK to stockpile medicines, but there is no guarantee that this would be enough to safeguard supply. Of all the nightmare scenarios for the Government in the event of ‘No Deal’, the risk of UK citizens dying as a result of negotiations failing is perhaps the worst. This is no longer an inconceivable outcome.

 

In summary…

We should know by Christmas this year whether Mrs May’s deal with the EU will go ahead. Should Parliament reject the deal on offer, then either she or a new Prime Minister will have to go back to the EU to try and negotiate better terms.

With so little time left to secure a deal, it remains to be seen whether a majority of MPs in the House of Commons will really want to plunge the UK into ‘No Deal’ territory. This still seems unlikely, but for now we have gridlock. The ultimate impact on the UK Life Sciences sector? Watch this space!