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Brexit – has the music stopped?

As we fast approach October, when supposedly the UK Government is to finalise and agree with the EU its Brexit strategy, we seem no closer to an actual answer as to what will happen post 30th March 2019.

On the one hand, we have the MHRA recently stating that an implementation period that takes us to December 2020 is a done deal. This implementation period allows for companies to release and certify products in the UK, which will be recognised by the EU27 and vice versa. This will also cover UK QPPV activities, GMP and GDP certificates, which will remain valid during the implementation period. It has also stated that UK-based companies can still apply for MAs via the DCP or CP routes. However, the MHRA will have lost its voting rights on all EMA and EU committees. Furthermore, there has been no official communication from the EMA backing up this statement from the MHRA, and the EU politicians are baying for a hard Brexit.

Such is the confusion and uncertainty surrounding the situation there has been several knock-on effects. Firstly, the EMA has raised alarms that it will be hit by a lower than expected staff retention once it transitions to its new offices and, as such, it will implement the next phase of its business continuity plan by October 2018. In essence, it will be scaling back on what it has defined as non-core activities during 2019, such as international collaboration and development or revision of non-urgent guidelines. However, the real impact on the effectiveness of the agency will not be seen until the first quarter after relocation.

On the other side, many major players – such as Sanofi, Merck and AZ – have been putting contingency plans in place which include staff relocation so as to ensure that there is a balanced spread of expertise, stock building of core products (some up to 6 months), preparation for alternative supply chain routes and contingencies for delays in distribution. These are some of the measures being undertaken. The actual cost impact of Brexit on companies is yet to be fully evaluated but the fact that some major players are investing circa £40M shows the urgency of the situation.

The challenge lies for the SMEs and generics companies who have more complex supply chains and models as well as tighter margins. Many of these companies are still playing the waiting game, hoping that some reasonable common sense prevails. But as we have seen thus far in the political rhetoric, common sense has taken a vacation and it is very much a war of attrition. As ever, here at ELC Group we remain on the leading edge of Brexit developments and planning, and we will continue to provide updates to all interested parties as the situation develops.

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