On 31 January 2020, the United Kingdom (UK) withdrew from the European Union (EU). Alongside a number of repercussions, the most impactful to the drug discovery sector arguably relates to regulatory affairs on account of adjusting from the European Medicines Agency (EMA) to the Medicines and Healthcare products Regulatory Agency (MHRA). DDW’s Megan Thomas evaluates the current impact of Brexit on the UK drug discovery sector in two parts. Read Part 2 here.
Leaving the EMA
The impact of Brexit on the pharmaceutical sector1, a report written of 2017-19 of the House of Commons’ Business, Energy, and Industrial Strategy Committee, states: “Were the UK to diverge from the regulatory requirements of the EMA, there was scant evidence of any potential benefits to the sector. Companies and industry groups identified that there may be the chance for increased flexibility on the amount of time it takes for new products to be approved; but accepted that this would be offset by the need for separate EU and UK approvals for market access.” This was reported through a combination of oral evidence, and written evidence from AstraZeneca1.
In her Mansion House speech in May 2018, the former Prime Minister Theresa May set out the government’s approach to engagement with the EMA as negotiations continue. She said: “The UK will need to make a strong commitment that its regulatory standards will remain as high as the EU’s. That commitment, in practice, will mean that UK and EU regulatory standards will remain substantially similar in the future.”1
With the above-mentioned in mind, let’s take a look at what the UK government has done in order to keep the sector afloat from a regulatory perspective.
In March 2023, the UK’s HM Treasury awarded £10 million to the MHRA to help bring innovative new medicines and medical technologies to UK patients more quickly2. The UK government stated that the funding will be used to accelerate routes for bringing innovative medical products developed in the UK onto the market, as well as those made and approved by other trusted regulatory partners globally. Dr June Raine, MHRA Chief Executive, said: “This cash injection will ensure that we have access to the best resources, talent, and infrastructure to deliver this ambitious vision for patients across the UK.”
Steve Barclay, Secretary of State for Health and Social Care, said: “This new funding will accelerate the delivery of cutting-edge treatments like cancer vaccines and new artificial intelligence technology that will make therapy more accessible to those who suffer from mental health conditions.
“It will also fast-track access to medical products that have been approved in other countries by trusted regulatory partners, ensuring we continue to provide the best, most innovative and safest treatments in the UK.”
Chancellor of the Exchequer Jeremy Hunt said in his Spring budget speech in March 2023 that from 2024, the MHRA would put in place the “quickest, simplest regulatory approval in the world for companies seeking rapid market access.”
As part of the UK’s separation from the EU, UK researchers lost access to Horizon Europe. Horizon Europe is the EU’s key funding programme for research and innovation with an annual budget of €95.5 billion3. In her initial remarks on the deal, European Commission President, Ursula von der Leyen indicated that UK scientists could regain access to the programme4. The UK is now ‘on the brink’ of re-entering, according to The Guardian5.
David Dowling, Counsel at Ropes & Gray LLP, commented in March 20234: “Any readmission to Horizon Europe will likely be seen as a boost for the government, at a time in which it is seeking to realign Whitehall to focus more on science and innovation in a bid to become a ‘science superpower’. […] However, readmission is unlikely to be an overnight process. Much of the UK’s success in the area of research and development has been due to its cluster of universities (particularly in the Golden Triangle). While they wait for re-entry to Horizon and its benefits to be felt, many in the life sciences sector are still calling for more Government support, including through R&D tax credits.”
Confirmed by the European Commission, all aspects of the UK association to Horizon Europe were agreed on 24 December 2020 in the Trade and Cooperation Agreement between the EU and the UK (TCA)6. The association entered into force through the formal adoption of a protocol that was already agreed in principle and no additional negotiations are foreseen. On 21 June 2023, in a Q&A on the UK’s participation in Horizon Europe, the following boundaries were set out6:
- UK entities including universities, research centres, scientists, innovative businesses, industry, etc. can participate in the first calls for proposals of Horizon Europe as soon as they are published on the European Commission’s website. In duly justified exceptional cases, restrictions may apply and these will be clearly specified in the calls for proposals.
- The UK is associating to the full Horizon Europe programme with the only exception of the EIC Fund (which is the loan/equity instrument of the EIC).
- The UK is expected to become associated to the Euratom Research and Training Programme, as well as fusion-related activities carried out by the European Joint Undertaking for ITER and the Development of Fusion Energy (F4E) under the ITER Agreement, and the Broader Approach Agreement.
- The UK will not participate in the European Defence Fund, which has a different legal basis and is not covered by the Trade and Cooperation Agreement.
- Once the Associated Country status is in force, UK participants will have the same rights as EU participants, with the very limited aforementioned exceptions.
- UK entities will be eligible for funding at the same rates and under the same conditions as any other participant. They will be able to lead project consortia and will count towards the minimum number of countries in calls for transnational projects.
While imminent re-entry is a positive outcome for the UK, the impact has been felt. As we pass the midway point of the third year of the seven-year programme, the Commission has disbursed €11.83 billion, or around 12.4% of the budget. Science Business wrote earlier this year7: “What is most startling about the data, is the impact of Brexit and the country’s subsequent non-association, on the level of UK participation, and in particular on its five leading universities. Despite a national safety net that replicates EU funding, participation by UK companies, universities and individuals has fallen by half.”
The Windsor Framework and Northern Ireland
As reported by DDW, the EU and the UK government reached a political agreement earlier this year that they hope will address the challenges faced by citizens and businesses in Northern Ireland (NI) following Brexit. The Northern Ireland Protocol was established on 1 January 2021 to set out Northern Ireland’s post-Brexit relationship with both the EU and Great Britain in relation to Northern Ireland remaining within the EU’s single market, customs union and animal health and food safety regimes. According to a report by HM Government, the Northern Ireland Protocol ‘has been the source of acute political, economic and societal difficulties in the two years since it has been operating.’8
However, on 27 February 2023, UK Prime Minister Rishi Sunak and the President of the European Commission, Ursula von der Leyen, announced that a new agreement had been reached to change the way the Northern Ireland Protocol operates. This agreement is called the Windsor Framework. As reported by the BMJ, Sunak, introducing the Windsor framework at a press conference on 27 February, said, “From now on, drugs approved for use by the UK’s medicines regulator will be automatically available in every pharmacy and hospital in Northern Ireland.”9
Alan Stout, Chair of the Northern Ireland BMA’s General Practitioners Committee, called the agreement a ‘massive relief’. The BMJ reported that in January, Stout and other experts gave evidence to the House of Lords Ireland/Northern Ireland sub-committee regarding the pharmaceutical problems created by the protocol9. The solutions proposed in the Windsor Framework are ‘almost exactly’ what he and others had suggested, according to Stout.
International trade deals
Switzerland is not an EU member state and as such, the fallout from Brexit does not have a direct link. However, Switzerland is one of the wealthiest countries in the world and the UK’s tenth largest trading partner and as such, post-Brexit negotiations will play a key role in the UK pharma and life science industry’s future10. In May 2023, UK Business and Trade Secretary, Kemi Badenoch, began negotiations for a modern, updated free trade agreement with Switzerland11.
Executive Director of International Policy, Association of the British Pharmaceutical Industry (ABPI), Claire Machin, said12: “For life sciences, the opportunities are clear. Firstly, bolstering the innovation that is the bedrock of our sector with provisions that support robust intellectual property frameworks in both countries can ensure the UK continues to be an attractive destination for investment, and can collaborate to develop products of the future.
“Together with a dedicated Innovation Chapter in the agreement, both sides can send a signal to the global biopharmaceutical industry that they are serious about supporting growth sectors of the future, like life sciences.
“In terms of pharmaceutical regulation, this agreement can cement a strong partnership between the two counties which includes provisions that see both sides cooperate on the development of future streamlined standards, while minimising barriers in cross-border trade from duplicative regulatory requirements at present.”
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
CPTPP is a free trade agreement (FTA) between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore and Vietnam. As of July 2023, the UK is now a member. UK Prime Minister Rishi Sunak said: “As part of CPTPP, the UK is now in a prime position in the global economy to seize opportunities for new jobs, growth and innovation”.
According to the BMJ, this new deal will make it harder for the UK to regulate tobacco and alcohol, or ban products like those containing harmful pesticides, and therefore poses a ‘major threat to UK public health’13.
On the other hand, Juliette White, VP Global SHE and Operations Sustainability, AstraZeneca, said14: “The economic engines of growth in the 21st century are overwhelmingly concentrated in emerging markets, many of which are located in Asia. The potential for CPTPP accession to enhance the UK’s trade links with these growth markets could pave the way for new enduring economic and regulatory partnerships, in turn making it easier to bring our life-changing medicines to patients.”
Once more, the ABPI’s Claire Machin weighed in, stating14: “The government has rightly made sure that the UK joined the CPTPP in a way that supports innovation and is consistent with our existing international obligations such as the European Patent Convention. Intellectual property underpins everything the life sciences does and it’s vital that the UK continues to pursue Free Trade Agreements that further reinforce strategically important sectors like ours.”
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