It began with a promise to UK voters to end ‘benefit tourism’ and to negotiate more flexibility in the UK’s relations with the EU. Recently it was called a ‘mistake' and openly criticised.
If in the upcoming referendum promised in the Government’s election manifesto, the people of the UK vote to leave the EU, and for “legally binding and irreversible” changes, what are the implications for the vibrant UK & EU pharma industry?
Pharma must continue to raise concerns over the potential impact of this change on itself, on patients and other stakeholders, at a time when productivity, synergies and access to treatments are key success factors. Patient groups are also engaged and are requesting information from industry over the effect of the UK cutting ties with the EU. (...)
Potential implications of a BREXIT include costs that it would be premature to speculatively estimate.
This is a brief summary of some possible implications, for which, if there is an ‘out’ referendum vote, the pharmaceutical industry must be prepared.
- -Business Investments and Inward Trade: Potential relocation of headquarters and production sites, higher labour costs, significant regulatory burdens for a new system for authorisations, potential import duties for British goods entering the new EU single market could off-set the benefits of new trade deals negotiated by an independent British negotiating team (for example, how would Britain join in TTIP talks?).
- -Isolation of Regulators & Academic Centres: The European Medicines Agency could leave London, as it must be based in a member State. There would be a weaker role in the EU for the MHRA, and NICE would no longer automatically be included within the EUNetHTA initiative and would lose access to important information about pricing and innovative pricing models in the EU. UK regulators would also lose the opportunity to be included in multilateral negotiations with FDA. Access to EU-wide databases on clinical trials, pharmacovigilance data and health and safety data could be subject to ‘access fees’. There are many open questions. Academic centres in the UK would lose the benefits of current close links with other academic units within and outside of the EU and funding that is financed by the EU.
- -IP Rights, Guidance & Regulation: Current proposals will not affect the Unitary Patent Convention (UPC) and current systems for filing, registering and challenging patents at a national level. There would be calls for the London-based UPC Court for pharmaceutical patents to relocate to Paris or Munich. To avoid legal uncertainty on ‘exclusivities’ such as data exclusivity contained in existing EU legislation, Britain would probably continue to apply existing EU laws. If it were to challenge future EU regulation, for example on data privacy, this would increase costs for businesses seeking harmonised regulation across member states.
- -Even if rulings of EU Courts were no longer binding on UK courts, they might still be ‘persuasive’. It might be more difficult to enforce UK judgments in Europe, which this would be a major issue for UK entrepreneurs. Before the exit, the industry would be consulted on transitional arrangements. There would still be high cost for business, specifically for a new system to approve medicines, report adverse events and manage interactions with multiple stakeholders for example on transparency of data and trials.
- -R&D funding, incentives & public-private initiatives: Such funding is sensitive to changes in financial flows. Comparisons with R&D funding into Switzerland over a decade shows Switzerland received less than half of R&D payments into the UK, despite pro-industry incentives and an IP-friendly environment. UK-based SMEs would be subject to a withdrawal and only a partial refund of FP7 and Horizon 2020 funds.
- -Impact on EU Budget: How would the EU find the net €11bn that Britain contributed in 2013? EU Treaties already impose a two year notice period on Member States requesting an exit. Even if this period can be extended, it is not clear how the EU would make up the shortfall and projects such as the Innovative Medicines Initiative and HTA research projects could be cut.