Pharmaceuticals industry braces itself for Brexit regulation changes
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Regulatory changes are the pharma industry’s greatest Brexit concern

29 Jun 2018 (Last Updated June 29th, 2018 16:49)

With the date of Brexit less than a year away, the pharmaceuticals industry is increasingly focused on understanding how healthcare regulations will look in the UK once it has departed the EU. In fact, recent primary market research by GlobalData found that regulatory issues are overwhelmingly the greatest concern of professionals in the healthcare industry, with over 40% of survey respondents indicating that it would be the most significant factor to affect the industry as a result of the UK leaving the EU.

Regulatory changes are the pharma industry’s greatest Brexit concern
There are multiple ways in which drugs can be approved in the EU, which complicates any future arrangement the UK may seek. Credit: AstraZeneca.

With the date of Brexit less than a year away, the pharmaceuticals industry is increasingly focused on understanding how healthcare regulations will look in the UK once it has departed the EU. In fact, recent primary market research by GlobalData found that regulatory issues are overwhelmingly the greatest concern of professionals in the healthcare industry, with over 40% of survey respondents indicating that it would be the most significant factor to affect the industry as a result of the UK leaving the EU.

The UK is currently a major player in the European drug approval process and is the home of the European Medicines Agency (EMA), which is considered to be a major draw for pharmaceutical companies looking to conduct business in Europe. With Brexit looming, pharmaceuticals executives with significant UK-based operations have voiced concerns over a need for clarity regarding Britain’s future role in European pharmaceutical regulations.

Centralised and decentralised procedures for drug development

Unlike in the US, where the FDA provides a centralised regulatory pathway for new drugs, there are multiple ways in which drugs can be approved in the EU, which complicates any future arrangement the UK may seek. Overall, there are four different approval pathways: the centralised procedure, decentralised procedure, national procedure, and mutual recognition pathway. UK Prime Minister Theresa May has indicated that she intends to seek full EMA membership post-Brexit in order to retain access to each regulatory pathway; however, the EU has rejected this proposal, and the final arrangement is likely to be more complex.

Given Theresa May’s position during the Brexit negotiations, the UK’s preferred scenario would likely be full access to the European centralised procedure. Most novel drug applications go through the centralised procedure, which allows pharmaceutical companies to apply for market access across the whole EU through a single application with the EMA, making it the most comparable to the FDA’s process. Although the UK has indicated it would like to continue using this procedure, in March 2018, the EU rejected any possibility of the UK remaining a member of the EMA post-Brexit, and guidelines for Brexit published by the EMA state that they are working on the basis of the UK not having access to the centralised procedure after March 30, 2019. This makes it unlikely that the UK will be part of the centralised procedure in the future.

One outcome of Brexit, which could be more likely, is that the UK retains access to the decentralised procedure in some way. This is generally the preferred regulatory pathway for generics, and because of this, it is more commonly used than the centralised procedure. The decentralised procedure allows for the simultaneous marketing application for a drug across several EU countries through the national drug authorisation body in each market. In the UK for example, this process is handled by the Medicines and Healthcare products Regulatory Agency (MHRA).

Unlike the centralised procedure, the EMA Brexit guidelines do not specifically state that the UK will not have access to this regulatory pathway after Brexit, allowing for the possibility that the EU may be holding it as a potential bargaining chip during the withdrawal negotiations. Although arguably less important than the centralized procedure, retaining access to the decentralized procedure could ensure that generic products are available on the National Health Service (NHS) in a timely fashion.

Moving outside EU drug regulations

The alternative scenario to retaining access to some European drug regulatory pathways would be for the UK to operate entirely outside the EU’s drug regulatory process. This could result in slower access to novel and generic drugs by several years, since drug companies will likely prioritise application for marketing authorisation in the significantly larger US and EU markets before turning to the UK.

However, in certain cases, the UK may benefit from the freedom of being able to dictate the criteria for approval of new drugs separately from the EU. For example, physicians from France and Italy have historically been relatively reluctant to support certain attention deficit hyperactivity disorder (ADHD) medications, and so being separate from the EMA could allow faster approval of these drugs. Although there could be certain benefits, this scenario is unlikely to be the preferred option for the UK government because the availability of most drugs would be hampered.

Overall, the likely scenarios for post-Brexit are positioned to result in slower marketing approval of drugs in the UK. The UK government is most likely to push to retain an arrangement as close as possible to the current situation for drug approvals; however, the EU has indicated that it would not accept such an arrangement. With the uncertainty over the final arrangement, as well as the likelihood of a final agreement that is inferior to the current situation, it is unsurprising that regulatory issues are the major concern of healthcare professionals with regards to Brexit.

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