Brexit – Into the unknown for the UK, EU and patient access to pharmaceuticals?
On the 29th March 2017, the UK government triggered Article 50, which initiated the negotiations for the UK to withdraw from the European Union. The UK and EU now have two years to reach an agreement as to how the UK can exit the EU and what the terms will be for the new relationship with the EU. For the next two years, nothing is likely to change for patient access of pharmaceutical products in the UK, it does pose interesting questions for 2019 and onwards.
What we know
The UK government has stated that it is its intention to leave the EU single market, customs union and the European Court of Justice (ECJ). This implies that the UK is heading for a so called “hard Brexit”, which will involve a new trade deal being negotiated. Whether this new trade deal will result in comparable access for the UK to the EU single market remains to be seen and will only become clear as the negotiations progress.
What are the potential implications for pharmaceuticals and patient access from 2019?
This can be broken into 3 topics: The EMA and market authorisation, the UK pricing and market access process and the UK’s role within EU pharmaceutical industry
- The EMA and marketing authorisation (MA)
If the UK is no longer part of the single market nor under the jurisdiction of the ECJ, it is highly probable that it will leave the EMA. The implication is that the UK would no longer be part of the joint EU marketing authorisation process. This would require a separate marketing authorisation process for the UK, presumably managed by the MHRA. This will probably require additional cost, time and resource implications for manufacturers and will result in a delay in seeking marketing authorisation to the UK market. It is possible that an agreement could be negotiated in which the UK MA process is classed as comparable to the EU MA process (e.g. similar to Norway), but this remains to be seen.
Remap Consulting’s working assumption after 2019: The UK leaves the EMA and a separate regulatory process is required to gain marketing authorisation to the UK market
- The UK pricing and market access process
Given that pricing and reimbursement of pharmaceuticals has been clearly stated to be the responsibility of the member states by the EU, there is unlikely to be any change in the price and funding of new pharmaceuticals, unless the UK government decides to. The result is that the Department of Health will be responsible for setting the price, whilst NICE and the representative bodies in the other devolved countries will maintain their role in deciding access and funding.
Remap Consulting’s working assumption after 2019: No change to the UK’s pricing and funding processes for gaining access
- The UK’s role within EU pharmaceuticals
From a European perspective, the UK’s withdrawal from the single market could have major consequences, specifically on: Parallel trade, International reference pricing and launch sequence.
- Parallel trade.
If the UK withdraws from the single market and the UK does not adopt a comparable marketing authorisation framework, then parallel trade to and from the UK should cease. However, if the UK adopts a comparable regulatory regimen, it is likely that parallel trade will continue.
Remap Consulting’s working assumption after 2019: Parallel trade is unlikely to continue, due to the different marketing authorisation process.
- International reference pricing (IRP)
The UK is one of the most widely reference country from an IRP perspective and will continue to be in the short term, even if it leaves the EU single market. It is likely to take time for EU markets to update their IRP baskets, if they choose to do so. If there is further depreciation in Sterling, then the UK may continue to be an attractive reference country due to its relatively low prices, which will pose a challenge to manufacture’s profitability.
Remap Consulting’s working assumption after 2019: The UK will remain an important IRP market, but this is likely to pose challenges to EU and global price corridors, particularly if further depreciation in the currency occurs.
C) Launch sequence
Due to the likelihood of a separate regulatory regimen, it is likely the UK will slip down the global launch sequence, due to the resource constraints faced by most countries. As such it is likely to be on the second tier of markets, such as Switzerland and Canada.
Remap Consulting’s working assumption after 2019: The UK will move to a second wave of global launch markets, due to the differing marketing authorisation process.
As negotiations have just started between the EU and UK, nothing is certain about the process nor outcomes of the UK withdrawing from the EU and there is likely to be many more surprises alone the way. One top 15 pharma company recently told us that they are currently excluding the UK from market research, due to the huge uncertainty over launching within the market. They prefer to see the UK as a potential upside if the new products can be launched there. We will keep you abreast of the UK situation and it will be interesting to see how our accurate our working assumptions are in late 2019!