Brexit spells upheaval for EU and UK drug regulation

LONDON (Reuters) - Britain’s vote to leave the European Union spells regulatory uncertainty for drug companies, with the London-based European Medicines Agency (EMA), which approves treatments for all EU countries, expected to have to relocate.

The GlaxoSmithKline building is pictured in Hounslow, west London, Britain, June 18, 2013. REUTERS/Luke MacGregor/File Photo

The association of Germany’s pharmaceuticals industry said on Friday that Europe’s equivalent of the U.S. Food and Drug Administration would need to move to a city within the EU, bringing administrative headaches for companies.

Britain’s biggest drugmaker, GlaxoSmithKline, said the exit vote “creates uncertainty and potentially complexity for us in the future”, though the impact on its global business would be small, while the UK pharma trade association warned of challenges to future investment, research and jobs.

Industry executives fear upheaval at the EMA could snarl the EU’s drug approval process and Britain may have to develop its own domestic regulatory system, leading to further confusion.

Although Britain could continue to take part in the EMA system if it remains in the European Economic Area, like Norway, many of those supporting its exit from the EU oppose that option.

As a result, British patients could move to the back of the queue for new medicines as companies prioritize the larger EU market, and some medicines could be left in regulatory limbo.

The EMA, with a full-time staff of more than 600, is the largest EU body in Britain and has overseen pan-European drug approvals since 1995 from its headquarters tucked away among global banks in London’s Canary Wharf.

An EMA spokeswoman said it was premature to comment on its future. “It is too early to foresee the implications of this decision and at this stage we are waiting for further guidance from the European Commission,” she said.

Drug companies and healthcare officials in Sweden, Denmark, Italy and Germany have all expressed interest in hosting the EMA instead of London, since firms in these countries are keen to be located close to the region’s key regulator.


The impact on profits of Britain’s EU exit will be limited for many global drug manufacturers as the United States is by far the largest market for prescription medicines and Asia is also of growing importance.

GSK said it did not anticipate a material hit to its business -- and in the short term analysts expect it to enjoy an earnings boost from a weaker pound as overseas revenues are translated into sterling.

AstraZeneca, which reports in dollars, and Swiss rival Roche won’t enjoy such a currency lift but both said it was vital that Britain continued to support the life sciences industry in the wake of the referendum.

The pharmaceuticals industry employs more than 70,000 people in the UK and accounts for 25 percent of all business research and development spending in the country.

Many scientists are concerned that funding for academic research, which has been well supported by the EU in recent decades, will now be jeopardized, along with important UK-European research collaborations.

“Now that the direction has been set to leave the EU, it is crucial that the government develops clear plans to safeguard the future of science and research in the UK,” said Robert Lechler, president of the Academy of Medical Sciences.

Additional reporting by Ludwig Burger in Frankfurt; Editing by Keith Weir