After staging a vigorous campaign to stay in the European Union, the pharma and biotech industry in the UK is reeling at the consequences of the out vote.
“This sector spoke with one voice,” Mike Thompson, chief executive of the Association of the British Pharmaceutical Association (ABPI) told Science|Business. “The life sciences were absolutely unanimous about the benefits of staying in the EU, for economic growth and for patients,” he said. The vote to leave, “Creates immediate challenges for future investment, research and jobs in our industry in the UK.”
Thompson’s counterpart at the UK BioIndustry Association (BIA), Steve Bates gave the same reaction. “This is not the outcome that the BIA wanted,” Bates said. “Key questions about the regulation of medicine, access to the single market and talent, intellectual property and the precise nature of the relationship of the UK with Europe are now upon us.”
While devastated at the implications, both men respect the result and are rolling up their sleeves to prepare to deal with the situation. “Let’s think creatively,” Thompson said. “The danger is in assuming we absolutely have to be out of this.”
The ABPI is calling for the formation of a taskforce including representatives from the industry, to formulate a strategy for the negotiations on the UK’s future relationship with the EU, which will start once article 50 of the Lisbon Treaty is triggered and the countdown to withdrawal begins.
Similarly, Bates said, “The BIA will make its and its members’ expertise available to the government and its key agencies in the coming weeks and months as we work through these complex issues.”
Hit to inward investment
According to Thompson, the uncertainty fomented over the three months of the referendum campaign has already hit inward investment. “Some decisions on manufacturing and clinical trials did not come the UK’s way,” he said.
If the last quarter was bad, there will be up to two years of further uncertainty before the divorce is final. “From now on, there will need to be more effort to bring inward investment to the UK,” said Thompson.
The prospect of clinical development activity moving outside the UK is very real. As Thompson noted, it is entirely rational for pharma companies to design their clinical trials programs around 500 million patients in the EU, rather than 60 million in the UK.
The impact of companies steering clinical development away from the UK will be compounded by the – inevitable – removal of the European Medicines Agency (EMA) from London, taking with it 800 jobs, fracturing professional relationships and relocating one of the biggest seams of intellectual capital in drug regulation and oversight.
Of course, the UK’s loss will be another member state’s gain, with Sweden, Denmark and Italy already vying to be the EMA’s new host. But there will be a loss to European medicines regulation as a whole if the EMA were to lose access to the resources of the UK Medicines and Healthcare products Regulatory Agency (MHRA) and to the National Institute of Biological Standards and Control, which play prominent roles in the advancement of regulatory science.
“I know from talking to colleagues in Europe how highly they regard the MHRA,” Thompson said. The UK agency carries out more reviews of marketing applications for drugs than any of its counterparts and has been instrumental in the formulation of accelerated access pathways, such as the EMA’s recently launched PRIME (Priority Medicines) scheme.
Thompson would like to see the MHRA maintain its current position vis a vis its peers elsewhere in Europe and for the UK to remain within the EMA’s regulatory framework.
Contingency plan
Bates and Thompson are worried about constraints on the industry recruiting staff from Europe, and of the terms on which UK companies would take part in EU research programmes. “A key concern is about collaborations involving member companies supported on a multi-year basis,” said Bates.
A report from the House of Commons Science and Technology Committee published earlier this month called on the government to put a contingency plan in place to protect life sciences in the event of a vote to leave the EU.
Although the cost of complying with EU-wide regulation is higher than having a national system, it is worth the price, in giving the UK access to the single market, which accounts for 27 per cent of global pharmaceuticals sales, the Committee said. Over half of the UK’s annual £21 billion pharma sales go to the EU.
EU regulation relating to life sciences includes 18 pieces of legislation. But while reducing red tape emanating from Brussels was one of key points of the leave side’s campaign, representatives from the industry who gave evidence to the Science and Technology Committee stressed the need for strict regulation and oversight to ensure the safety and quality of medicines.
“Our life sciences sector would still have to follow EU regulations to sell in the single market. But Britain wouldn’t get a say in setting those rules, putting us at a competitive disadvantage,” Nicola Blackwood MP, chair of the Committee said when the report was published.
At 11am on Friday morning, Blackwood put out a statement in response to the out vote, pointing to the “significant uncertainty” it has generated and saying, “The Science and Technology Committee will want, in the coming weeks and months, to look at the consequences of this vote for British science.”
Brexit blocks the single patent
The vote for Brexit cuts the UK out of the EU/US Transatlantic Trade and Investment Partnership, which includes moves to increase cooperation between EMA and its US counterpart, FDA. Amongst other measures, there are proposals for mutual recognition of drug manufacturing facilities, so that the FDA no longer needs to send inspectors to Europe, and vice versa, and for the exchange of confidential and trade secret information to enable EMA and FDA to carry out joint assessments of marketing applications for new drugs.
Brexit also throws a big fat spanner into work in progress in launching the EU’s unified patent, currently promised to go live early in 2017. The lease has been signed on a new office in London to house the chemistry and pharmaceuticals arm of the unified patent court, but with only EU members eligible to be part of the system, the ribbon may never be cut
There was a long and hard wrangle over the siting of the court, with the Eurofudge outcome that it was divided between London, Munich and Paris. With Brexit, the UK effort is wasted.
Much has been made of the cost savings the unitary patent court will offer SMEs such as development-stage biotechs, that are heavily reliant on having robust intellectual property rights to be able to do deals and build value. The promise is that it would no longer be necessary to translate, register and carry out patent litigation on a country-by-country basis.
It will still be open for UK companies to apply for unified patents, but in the event of litigation, cases would be heard outside the UK. And they will also need separate UK patents.
For companies in mainland Europe, Brexit has created a chicken and egg complication that means the launch of the unified patent is likely to be delayed. Although a supporter of the single patent, the UK government has not ratified the agreement, and now seems unlikely to do so. But during the withdrawal negotiations, the unified patent cannot enter into force, since as long as it is a member state, UK ratification is mandatory.
No wonder then, that the industry is alarmed and exercised. EU regulation, collaboration and partnership is the backdrop against which the biotech industry has grown up over its entire history. While acknowledging the size of the problem, Bates was keen to stress the fundamentals of UK bioscience remain strong. The sector, “Is a resilient community unfazed by new challenges and staffed by great management teams used to working in a global environment,” he said.
For Thompson, “There are going to be some very tough calls to be made going forward.” The publication of a major independent review investigating how to improve access to innovative drugs in the National Health Service was postponed until after the referendum. “I’m pleased the accelerated access review was not published,” Thompsons said. “Now there is a chance it will be seen as a manifesto.”
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