Brexit, pharmaceutical market access and UK

Brexit, pharmaceutical market access and the UK. Where are we now?


With just over eight months left before the UK leaves the EU in March 2019, it was hoped that a clear strategy and exit plan would be in place for pharmaceutical manufacturers to deal with the implications of Brexit. Unfortunately, this has not happened and our article from April 2017 is still surprisingly relevant as there is significant uncertainty and risk as to what the post-Brexit future looks like.

The UK government has also recently published official guidance for manufacturers in the event of a no deal Brexit scenario. The key points are that manufacturers should ensure they have a minimum of six weeks additional supply beyond their normal buffer stock. Furthermore, for products with a short shelf life, the UK government has asked that air freight options be put in place, in case there are any issues with border delays for road haulage. The government has also asked that manufacturers respond to their request to give details of their contingency plans for a no deal scenario. However, the Department of Health and Social care has asked that NHS trusts and pharmacies do not stockpile any drugs or medicines, as this would distort the supply chain.

Given the lack of clear and approved strategies and processes, most manufacturers have implemented their “no deal” scenario and are actively transferring marketing authorisations and in some cases making arrangements to increase stockpiles of medicines to ensure supply.

What is the UK position on the EMA?

In the short term, the UK is seeking a transition deal (or implementation period) from 29 March 2019 to 31 December 2020 to effectively maintain the status quo, with the one important caveat that the UK would no longer have a vote in EU matters. This would be welcome by most manufacturers as it would allow pharmaceutical market access to continue as normal. However, whilst the transition agreement has almost been negotiated, there remain significant issues still to be resolved. Until everything is fully negotiated, the deal cannot be implemented. With 8 months left, the no deal scenario is coming ever closer.

The key challenge for pharmaceutical manufacturers is understanding what the future trading relationship with the EU will resemble. Whilst details around access to the EU single market and UK are still in discussion, some aspects are clearer.

European Medicines Agency (EMA)

The UK has stated that it wants to remain part of the EMA, potentially via an “associate membership”. This would mean the UK would still have full access to the European centralised procedure and be expected to contribute financially to the running of the EMA. How global and European clinical trials would be regulated remains unclear.

A subsequent binding vote in parliament has made it a negotiating objective for the UK government to seek the UK’s participation in the European Medicines Agency. How this will fit with the UK’s other objectives of being free from the European Court of Justice remit (which govern the EMA) remains to be determined.

What is the EU position?

The EU has been relatively straightforward in saying that its core beliefs of free movement of goods, people and services are to be maintained and that it does not believe in “cherry picking” different parts of the EU single market.

The EU has been very cool on the idea of “associate membership” of the EMA, as this is viewed as exactly the type of “cherry picking” that the EU does not want. There is also no basis for “associate membership” in any of the EU laws, so this would need to be created especially for Britain. There appears to be limited desire to undertake these complex legal negotiations.

Remap Consulting’s assumptions on pharmaceutical pricing and market access after Brexit

Given 18 months have passed since our last assumptions on Brexit, we wanted to revisit and update them:

  1. The EMA and marketing authorisation (MA)

March 2017 assumption: The UK leaves the EMA and a separate regulatory process is required to gain marketing authorisation to the UK market.

As discussed above, the UK government sees EMA participation as important and it must seek access to it as part of the trade negotiations.  However, it remains to be seen if the EU will allow participation. In reality, a political fudge is likely, but it is likely to only become transparent at the last minute.

August 2018 assumption: The UK leaves the EMA and a separate regulatory process is required to gain marketing authorisation to the UK market.

  1. The UK pricing and market access process

March 2017 assumption: No change to the UK’s pricing and funding processes for gaining access.

Whilst there have been no official announcements on the pricing and reimbursement processes within the UK, as these are the remit of the UK government, it is unlikely there are to be any changes. The UK will remain a health economic and cost effectiveness driven market. However, the role and interaction of NICE/UK bodies in European initiatives, such as EUnetHTA and EMA’s parallel consultations remains to be determined, which could make seeking early pay advice more complex.

August 2018 assumption: No change to the UK’s pricing and funding processes for gaining access.

  1. Parallel trade

March 2017 assumption: Parallel trade is unlikely to continue, due to the different marketing authorisation process.

The current future situation is that the UK is not participating in EMA and single market access. As such, this is likely to mean that cross border trade is no longer feasible.

August 2018 assumption: Parallel trade is highly unlikely to occur, due to the lack of UK participation in the EMA or in the EU single market.

  1. International reference pricing (IRP)

March 2017 assumption: 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.

Whilst there have not been significant further currency fluctuations, the pound has continued its downward trend. This has caused challenges for many manufacturers due to international reference pricing in countries that utilise the UK price in their pricing basket. So far, no country has updated its reference basket to remove the UK due to Brexit either. With no imminent EU deal in sight, it is likely that the downwards pressure on the pound and UK international references prices will continue.

August 2018 assumption: The UK will remain an important IRP market, which is posing a challenge from IRP as further depreciation in the currency is likely.

  1. Launch sequence

March 2017 assumption: The UK will move to a second wave of global launch markets, due to the differing marketing authorisation process.

Whilst the UK government has made promising statements about the continued participation in the EMA and the importance of the life science industry to the UK, the lack of a concrete agreement with the EU and the ongoing uncertainty is making the UK a less attractive market. If the UK loses access to the EMA and the European centralised procedure, it will have an impact on the UK’s status in the global launch sequence, due to different regulatory procedures and manufacturer resource constraints.

August 2018 assumption: The UK will move to a second wave of global launch markets due to differing marketing authorisation processes.

In summary, the lack of an agreed and implemented Brexit deal or transition plan with less than 8 months to go has forced companies to implement their “no deal” scenario. The lack of agreement between the EU and the UK over critical bodies and processes governing pharma market access (e.g. EMA) is adding to the uncertainty. What the future looks like for access to pharmaceuticals for the UK post Brexit is still highly uncertain. In the short term, the UK is becoming a less appealing pharmaceutical market due to the challenges and uncertainties posed by Brexit.

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