The pharmaceutical sector is the third-largest industry in the UK. This sector adds £13.8 billion to the British economy per year (gross value added) on average. Pharmaceutical companies today try to figure out how to unravel decades of EU integration. Brexit will cause waves in procedures from now on. This may give additional costs for companies in this sector, but not just that, it will give concerns over patients’ access to healthcare. Brexit happened on Jan. 1, 2021, and UK companies in every industry sector were preparing for the changes. Since leaving the European Union, the global pandemic made its impact on the industry also.
What are the key implications?
Regulation will need careful management since it sets various factors like authorization, pricing, investment, and how R&D (research and development) is rewarded.
Marketing authorization is very essential. The law requires a product license. The Medicines and Healthcare products Regulatory Agency (MHRA) is the UK regulator. However, the MHRA license is not recognised in the EU today after Brexit. So this means, UK medicines may not be valid for the EU.
From a business perspective, the UK government must pledge that all medicines approved under EU law will have their status.
The potential issue with the marketing authorization is coming from having two distinct marketing authorization procedures. It may take longer for medicines to reach the UK.
When we talk about the legislation, the UK could enact further EU equivalent rules into UK law. On September 1, 2020, the MHRA laid out the future UK requirements for registering clinical trials, legal representation, and importing Investigational Medicinal Products (IMPs).
The UK can refine its national clinical trials regulation because it is not governed by the EU Clinical Trials Directive anymore. So new rules and regulations around clinical trials and the approval of new medicines can boost the competitiveness and productivity of pharmaceutical companies!
There is now new friction at the UK-EU border – when sourcing raw ingredients and commodities, like primary packaging and single-use production line components. So when pharma companies and their suppliers put measures in place there are steps to take:
- The on the shoring of production of APIs, raw materials, and commodities, such as packaging and line components.
- The diversification of supply chains to reduce reliance on European and UK-only suppliers, as around 80% of pharma’s raw materials are sourced from the UK or EU.
- The stockpiling of raw ingredients, primary packaging, and SU components to mitigate against the impact of the new friction at the UK-EU border on established just-in-time (JIT) supply chains.
When sourcing from overseas, many suppliers based in the UK now hold six weeks of inventory on-site. Suppliers stockpiling materials to produce their finished components, too.
The EU pharmaceutical market is known for the integrated supply chains that span multiple member states and utilize ingredients from third countries. More than 2,600 medical products in the EU are partly manufactured in the UK and 80% of pharmaceutical ingredients come from outside of Europe, mostly India and China.
The EEA medicine manufacturers and importers from non-EEA countries require national authorization. This is issued by the Medicines and Healthcare Products Regulatory Agency (MHRA). The authorization is subject to several conditions. The importer must have an expert at its disposal to conduct batch testing.
Boosting UK pharma
UK government officials work on a strategy to boost the competitiveness of its pharmaceuticals sector. One of the means is to ensure that the country’s regulatory system and drug evaluation procedures provide relatively rapid pathways to the market.
Even before Brexit, the UK demonstrated success when it surged ahead of its European rivals in the roll-out of the COVID-19 vaccines – Phizer and AstraZeneca.
With Brexit, the UK is living in a time of great shift, change, and uncertainty. The risks ahead and the potential opportunities to streamline regulation and reform legislation will most likely have a positive impact on the pharma industry. Time will show if this industry can thrive post-Brexit. However, there are very good indicators that pharma companies will build stockpiles of essential ingredients, packaging, and SU components to succeed in this race.