Brexit gets real for drugmakers as regulator moves to Amsterdam

LONDON (Reuters) - Drugmakers are racing to implement Brexit contingency plans to prepare for a jolt to their regulatory system as the European Medicines Agency is uprooted from London to Amsterdam.

FILE PHOTO: The headquarters of the European Medicines Agency (EMA), is seen in London, Britain, April 25, 2017. REUTERS/Hannah McKay/File Photo

Pharmaceutical companies, used to decade-long drug development cycles, and EMA staff face a mountain of paperwork to keep medicine supplies flowing without disruption.

Amsterdam maybe the least-worst option for staff retention, with 81 percent of EMA staff surveyed ready to move to the Dutch city, but there is still a real fear of bureaucratic logjams given the upheaval and ultra-tight schedule dictated by Brexit.

EU ministers selected Amsterdam from 19 cities as the new home of the EMA and its staff of around 900. It has been based in London since 1995, acting as a one-stop-shop for approving and monitoring the safety of medicines across Europe.

It must relocate to Amsterdam by the end of March 2019, when Britain leaves the European Union.

Choosing Amsterdam should avoid a mass staff exodus that would have torpedoed European medicines regulation. But while EMA Executive Director Guido Rasi hopes to avoid drug approval delays and said the Dutch city “ticks many of our boxes”, he said on Tuesday there could be no guarantees.

Rasi expects the organisation to lose some 200 people, adding that internal survey predictions of 19 percent staff losses were based on “optimistic” assumptions.

“If we lose people horizontally across the agency it will probably not cause delays in approvals ... However, if there is a collapse in some specific services that would disrupt things more seriously,” he told reporters at the EMA’s London offices.

Maintaining timely approvals for new drugs is crucial for pharmaceutical and biotechnology companies, which have dozens of experimental medicines due to be assessed by the EU regulator in the next couple of years.

They include new drugs for cancer, multiple sclerosis and rheumatoid arthritis from big drugmakers like Novartis NOVN.S, AstraZeneca AZN.L and AbbVie ABBV.N, as well as pioneering gene therapies for inherited diseases from smaller firms.

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What is more, the EMA faces extra work processing the market authorisations that companies need to sell prescription drugs in the EU - a task that is set to increase dramatically as firms rush to transfer UK product licences to EU-based entities to comply with post-Brexit rules.

“All the companies are working to do all the transfers at the same time, so the regulatory system is going to have a difficult time coping in the 16 months left before Brexit,” Nathalie Moll, director general of European Federation of Pharmaceutical Industries and Associations, told Reuters.

More than 2,600 drugs have some stage of manufacture in Britain and 45 million packs of drugs, such as boxes of antidepressants, are supplied from the UK to other European countries each month, while another 37 million flow in the opposite direction.

Stringent medicine regulations will also require the retesting of drugs shipped across borders, forcing manufacturers to set up additional testing centres.

“Patient safety and supplies of vital medicines are slightly different to whether BMW bumpers are stuck in Harwich port for a week or two longer,” said Steve Bates, CEO of Britain’s BioIndustry Association.

He is worried, too, about the mechanics of shipping the EMA across the North Sea and moving it into a new offices in the south of Amsterdam that are not yet built. Amsterdam says EMA staff should be able to start moving in on April 1, 2019 but temporary offices may also be needed while fitting is completed.

“I think people are under-estimating the scale of the challenge in moving the agency. The EMA took several years to move a few hundred metres in London. In fact, that took longer than the time we have left between now and Brexit,” Bates said.

And the move won’t be cheap. The absence of a break clause on the lease for the current London building will incur a cost of around 400 million euros (£354 million), according EMA deputy head Noel Wathion. Brussels wants the UK to help foot the bill.

Global drug companies, including UK-based GlaxoSmithKline GSK.L and AstraZeneca, have been vocal in calling for a system of continued co-operation between the EMA and Britain's national drug regulator, the Medicines and Healthcare products Regulatory Agency, after Brexit.

The issue is also a major concern for many Japanese drug companies that have made Britain their European base.

The British government has said it would like to work closely with the EMA to avoid the cost of taking over the job of regulating all medicines after Brexit.

But it will be up to EU governments to decide whether to offer some kind of mutual recognition system once Britain is out of the EU and no longer under the remit of the European Court of Justice, which oversees the EMA.

Asked if he expected such future cooperation, Rasi said: “It is completely unknown.”

Editing by Anna Willard