What does Brexit mean for life sciences companies in the EU and UK?

June 2016’s historic Brexit vote has created confusion and uncertainty in both the UK and the EU, with businesses struggling to understand the long-term impacts. Elisabethann Wright, partner, and Jane Summerfield, counsel, in Hogan Lovells’ European Life Sciences Regulatory Group, say that life sciences companies on both sides will need to grapple with a wide range of issues as they plan for a post-Brexit world. This includes potential changes to regulations in the UK, impact on business operations, and potential opportunities or barriers to continued collaboration.

One major hurdle will be how manufacturers in the UK handle the process of marketing authorisation for medicinal products post-Brexit. The European Medicines Agency (EMA), which plays an important role in the grant of marketing authorisation for centrally authorised medicinal products, seems likely to relocate its headquarters from London to a city within the EU. This may present new challenges for continued collaboration between the EMA, the European Commission and the UK’s Medicines and Healthcare products Regulatory Agency (MHRA). “How the remaining 27 member states assess medicinal products going forward may be heavily impacted (by Brexit),” says Summerfield. “Currently the UK and MHRA play quite a disproportionate role in terms of assessing medicines for the entire EU.”

But Wright says that if a medicinal product has previous authorization in the EU, there will need to be continued alignment between the two agencies, at least in the short to medium term. “If the UK is no longer part of the EU, we need to address the on-going validity of marketing authorizations previously recognized in EU member states,” she says. “We don’t yet know what the solution will be, but we know that it will be complex.”

Businesses are also concerned about Brexit’s impact on open borders, but are hesitant to make major changes without understanding how the split will impact movement between the UK and the EU. “Some of our clients are quite reluctant to make significant business decisions at this stage without a clearer picture of what the implications may be,” Summerfield says. “A large number of highly skilled workers come from the EU, and there’s certainly concern within the industry as to how that might impact research and development activities.”

Wright and Summerfield say that despite the inevitable challenges, Brexit also brings opportunities for both regions. “The potential for the UK pharmaceutical industry post-Brexit is quite interesting,” says Summerfield, who believes Brexit could actually create new excitement around emerging British companies. “The UK could start to differentiate itself, making it even more attractive to the industry as a whole,” she says. And in the EU, Brexit may actually lead to increased competition. “For the remaining 27 EU member states,” continues Wright, “the loss of the UK, which is home to many established life sciences companies, will mean one less major competitor in the region. We believe that might help encourage new competition within the EU.”

Wright says that while no one understands the full implications of Brexit on the life sciences industry, companies should proactively begin preparing for the UK’s exit. “We’re urging our clients to plan, to understand their business, and to begin anticipating changes and their potential impact,” she says. “One piece of advice would be to reach out to your legal team. They will have resources and expertise to help navigate these challenges – take full advantage of what they can offer, and remember that we are all in this together.”

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