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Impact of Brexit on the Regulation of Medicines and the Pharma Industry?

We have a unified Medicines regulatory system in the European Union and Economic Areas. The UK regulator is a significant player in respect of European regulatory procedures and is recognised as a source of considerable scientific and regulatory expertise.

Now we have Brexit and a schism which will eventually arise as the UK leaves the European Union. The UK government has indicated it will initiate this process, possibly next year, after which we will have 2 years to work out the details. How will this impact on Medicines Regulation and the Pharma Industry in Europe? In short nobody knows yet.

The MHRA in a recent blog, 19 July 2016, have indicated business as usual with all services and functions fully active. The blog strap line states “Following the EU referendum, the MHRA continues to play a full active role in European regulatory procedures”. At present this is true, nothing has really changed yet but, what will happen after the UK leaves the EU? This is the question which will only be truly answered by the process of negotiation between the UK and the EU and what deals may be struck and what shape the final relationship between the UK and the EU will take. There are three main options:

1. Membership of the European Economic Area (EEA, often called Norway model)

This would be of least impact to regulation and the industry markets as the UK would adopt most EU legislation however the requirement for free movement of EU citizens may be difficult for some in the UK to accept and cause difficulties in accepting this model.

2. Membership of the European Free Trade Association (EFTA, Switzerland)

The UK could join Switzerland and negotiate bilateral agreements with the EU and EEA. This would mean looking at trade agreements on a case by case basis but would allow more control of borders for the UK.

3. Complete independence

Bilateral trade deals based on the World Trade Organisation (WTO) models and all requiring to be negotiated with the EU and possible tariffs may be an issue. There will also be decreased leverage on a smaller UK market compared to the size of the EU market.

Whatever the outcome of negotiation the principal danger would be that the UK regulator ceases to have an active role in the development of EU regulations and policies and may simply become an observer, required to implement legislation adopted by the EU. The biggest impact would be felt on the marketing Authorisation of medicines and the integrity of the GMP Supply chain which are all now highly regulated and inspected. There is clearly a lot of work to be done in the coming months and years and no small degree of uncertainty. Nature abhors a vacuum, the markets abhor uncertainty.

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