Brexit: it ain’t all bad

By Richard North - October 28, 2020

Updated, as of yesterday, is the government guidance medicine and healthcare organisations on the post-transition period.

Like aviation, the sector is highly regulated and, prior to the end of the transition period, has been bound by an extensive network of EU law, under the aegis of the European Medicines Agency (EMA) – now relocated from London to Amsterdam.

The UK replacement for the EMA is the Medicines and Healthcare products Regulatory Agency ((MHRA for short), working with a gov.uk website, presumably pending the development of its own corporate website and branding.

Helpfully, the key changes to deal with Transend are summarised in an article in the pharmaletter, sufficient for a quick overview without having to fillet the official website, which sets out the new rules for January 2021.

One of the key points is that, for two years from 1 January, once the transition period after Brexit has come to an end, the UK will adopt decisions taken by the European Commission on the approval of new medicines in the community marketing authorisation procedure.

Something similar has been arranged for aviation, with EASA certification being recognised for the two years after Brexit. This carry-over device buys time for the UK regulatory agencies to get their acts together, and take over the roles formerly undertaken by EU agencies.

As for medicines and healthcare products, the guidelines announce that there are to be new routes for assessment, which will include an accelerated procedure and rolling review, with the UK promising to prioritise access to new medicines. The MHRA says that it is working with partner organizations in the UK to develop approaches to reduce the time to patient access for new products. Further details are promised by December.

On 1 January, the MHRA will introduce an accelerated procedure and will reach its opinion on approvability of marketing authorisation applications within 150 days of submission of a valid application. Meanwhile, the “rolling review” will be a new route for marketing authorisation applications, intended to enhance development of new medicines.

It is said that the latter mechanism will offer ongoing regulatory input and feedback, enabling applicants to get it “right first time” and ensure that applications can be approved as efficiently as possible.

This development is by no means bad news. Development of new drugs is expensive and slow, with a recent study estimating an average cost of €1.3 billion (US data). Anything that can cut costs and speed up the process (while maintaining safety levels) must be welcome.

Although direct regulatory costs – as approval agency fees – are relatively small part of the total, testing and trials mandated by regulators is usually a significant cost, and streamlining approval processes may trim substantial sums from overall development, and bring life-saving drugs into use quicker.

Here, the UK does have a very specific advantage, as the NHS provides an identifiable and coherent market, spending around £16 billion a year on pharmaceuticals, of which about £9 billion arises from GP prescribing and £7 billion from hospital treatment.

UK approval, therefore – even when separated from the broader European system – will still give access to a lucrative market, sufficient to incentivise drug companies to develop products for the UK market.

With the UK also adopting EMA decisions for two years, it will also have the power to take into account marketing authorisation decisions of EU Member States, accepting products which have been approved via the decentralised procedure, without waiting for the full approval process.

In some ways, therefore, this will improve the UK system of drugs approval, giving more flexible options for manufacturers to bring their products into circulation.

Much will depend, though, on the EU’s attitude to the UK system, as it develops. If the EMA is instructed to ignore or otherwise discount UK approvals, treating applications for additional EU authorisation as blank sheet applications, then pharmaceutical companies may be wary of picking the UK as a development customer.

If, however, the UK and EU can reach some degree of agreement on equivalence (mutual recognition is out of the question), then a short-form procedure may be acceptable for a UK-approved drug to be cleared for use in EU Member States.

We hear nothing of this in the context of the current EU-UK trade talks and the EU notice to stakeholders is not particularly helpful. It tells us that, during the transition period, the EU and the UK will negotiate an agreement on a new partnership, providing notably for a free trade area.

However, the Commission says, it is not certain whether such an agreement will be concluded and will enter into force at the end of the transition period. In any event, it then adds, such an agreement would create a relationship which in terms of market access conditions will be very different from the United Kingdom’s participation in the internal market.

As it stands, marketing authorisation holders currently established in the UK will have to transfer their marketing authorisations to holders established in the EU.

This means that the addressee of the marketing authorisation decision changes to the new addressee. The transfer of the marketing authorisation must be fully completed and implemented by the marketing authorisation holder before the end of the transition period.

For new products, developed in the UK after 1 January, much the same procedure will apply, unless there is provision for agreement on medicines within any trade agreement. We would expect (and need) some sort of reciprocal agreement, where the UK continues to accept EMA market authorisations, in return for EU recognition of UK certifications.

Here, that very specific advantage of the NHS kicks in. European manufacturers will doubtless want continued access to that market, so there is much sense in the EU and the UK coming to an agreement. The big question is on what terms any agreement will be based.

However, there is a further issue for the UK. As well as EU recognition, if the equivalent recognition for the US FDA system can also be brokered, the UK could build itself a lucrative niche as a regulatory hub serving US and EU markets.

Thus, if handled correctly – and that is a very big if – the UK could create a promising environment for the pharmaceutical industry, improving on its current status in the Single Market.

In that sense, Brexit for once may actually prove to be advantageous – depending on how successful our negotiators are in brokering a deal. And that, we are told hangs in the balance, having hit “their most difficult stage”.

One thing for sure, though – a no-deal would be troublesome for the UK pharmaceutical industry and would substantially add to costs, if regulatory approvals had to be duplicated here and in the EU. There is everything to gain from a deal, and we must hope that the current negotiations – even though limited – meet with success.