COVID threat must inject urgency into trade talks, say UK & EU pharma bodies
The UK and EU pharmaceutical industry are today jointly asking the UK Government and the European Commission to prioritise medicines in trade talks. This is to protect the supply of medicines for 500 million patients and safeguard the significant opportunities that working together on medicines research and development brings to both economies.
Industry trade bodies ABPI and EFPIA have always been clear that, despite preparing for all outcomes, getting a comprehensive trade deal is the best outcome for the UK and EU. With time running short there is an urgent need for technical agreements now which are essential for both sides.
As health systems across Europe face a surge in coronavirus cases alongside acute winter pressures, it is essential that the negotiations do not exacerbate these challenges. Not reaching an agreement risks avoidable, short-term medicines supply delays as well as long-term economic damage to the UK and EU economies.
Pharmaceutical companies are working flat out to research and develop potential vaccines and new medicines for COVID-19. They are also putting extra resources into ensuring medicine supplies keep moving during a global pandemic – this needs to remain the focus.
But with just 15 weeks to go until the end of the Brexit transition period, and despite guidance from both sides, companies are working in the dark on some critical issues around regulation of medicines, supply and how countries will work together to identify and share medicines safety issues and alerts.
The UK and EU pharmaceutical industry is calling on the UK Government and EU Commission to prioritise:
- Negotiating a Mutual Recognition Agreement for medicines manufacturing.
- Agree to a one-year ‘phase in’ of the Northern Ireland Protocol with respect to medicines, starting from the point when there is agreement on its interpretation.
1. Negotiating a Mutual Recognition Agreement for medicines manufacturing
Impact on medicines supply
Each month 45 million packs of medicines move from the UK to the EU and 37 million go back the other way. Every medicine manufactured must be tested to make sure it conforms to strict quality and safety standards before it can leave the production line.
Without a technical agreement in the form of a Mutual Recognition Agreement, when the medicine arrives in the EU it would be then re-tested, adding cost and delay in reaching patients.
A Mutual Recognition Agreement (MRA) on Good Manufacturing Practice (GMP) including batch release and testing would see both sides accept each other’s tests and inspections – as they do now – avoiding the introduction of unnecessary duplications overnight.
Failing to agree this as soon as possible and before the end of the transition period, could mean introducing a delay of around four to six weeks to the supply of medicines as they are re-tested.
MRAs are often signed outside of trade agreements. Doing so means that, should a comprehensive trade deal not be reached, negotiators will still have a clear way forward to remove significant risk to medicines supply in January.
Impact on economy and jobs
Economic analysis1 considering the impact of ending the transition period without an MRA shows that all of Europe including the UK loses out in the medium- to long-term.
Together, the EU and the UK have built one of the premier biopharmaceutical hubs in the world, competing with the US and China through a strong international ecosystem of world-leading research, cutting-edge regulation, and interdependent supply chains.
Not agreeing an MRA would see companies forced to undertake duplicative processes such as testing operations in both the UK and the EU.
Modelling shows that a less comprehensive deal will mean that investors begin to look elsewhere to set up new medicine research and manufacturing sites. This means that the US and Asia will benefit, the more the EU and UK diverge in Europe, due to an increase in red tape and the splintering of the EU and UK’s ecosystems.
- In a deal without an MRA, EU GDP would – each year – be €1.3 billion lower than if an MRA had been agreed to. UK nominal GDP would be €5 billion lower each year.
- EU pharmaceutical exports would drop by 1.2% in the long-term if no deal is reached and by 0.9% if an MRA is agreed. An MRA would cushion this blow to an amount of €1.2 billion annually.
- For the UK, without an FTA, pharmaceutical exports would drop by 22.5% (€4.1 billion) annually. However, this fall would be nearly halved, to a 12.6% (€2.3 billion) drop in case an MRA is signed.
Failing to secure an MRA will only benefit other regions with competing life science industries as both the UK and EU become less competitive globally. Investment will instead shift to places like Switzerland, the US, Japan, and China.
An MRA will help to ensure that the life science industry can better continue to play its part as the UK and the EU look to focus on economic recovery post-COVID.
The supply and economic issues can be mitigated by agreeing a deal which includes an MRA, or by agreeing an MRA in parallel to formal trade negotiations.
2. ‘Phasing in’ to the Northern Ireland Protocol for medicines Under the Northern Ireland Protocol (NIP), medicines in NI will be governed by EU rules and regulations. However, these rules are to be enforced by the UK’s medicines regulator, the MHRA.
How the regulations will be interpreted and implemented has still not been clarified. Companies are therefore in the dark as to the rules they must follow as they try to prepare for the end of the transition period and finalise their routes of supply to Northern Ireland.
Without further guidance on new rules and regulations, medicines may not be able to be legally dispensed in NI from 1 January. It is estimated that this applies to the majority of Northern Ireland’s future medicines supply.
With just 15 weeks until the end of the transition period it is impossible for companies to implement any complex changes that might be required. Both the UK and the EU should consider the potential impact on patients in Northern Ireland.
This is why the industry is requesting a one-year phase-in process – starting from the point when the UK and EU reach agreement on its interpretation - so that they can avoid disruption to supply in Northern Ireland.
The issue of medicine rules and regulations in Northern Ireland must be at the top of the agenda for the next Joint Committee, and both sides should agree to a one-year phase in process to the application of the Protocol for medicines.
Richard Torbett, Chief Executive of the Association of the British Pharmaceutical Industry (ABPI), said:
“The coronavirus pandemic has stretched hospitals and medicine supply chains to their capacity.
“It is absolutely clear that it’s in nobody’s interest – and certainly not patients – to face the future with uncertainty around how medicines will be regulated, tested and moved throughout Europe and the UK.
“The UK Government and European Commission have an opportunity to end this uncertainty and strengthen healthcare systems with an agreement on medicines whilst negotiations continue.”
Nathalie Moll, Director General of the European Federation of Pharmaceutical Industries and Associations (EFPIA), says:
“Our industry is fully committed to fighting the COVID-19 pandemic through unparalleled R&D efforts to discover and develop new treatments and vaccines. We also want to ensure the supply of medicines to patients in Northern Ireland in the context of Brexit.
“Recognising the dual impact of the UK leaving the EU and the pandemic, it is imperative that the EU and UK negotiators facilitate these objectives by agreeing on an MRA on batch release and testing and a phase-in process to the application of the Northern Ireland Protocol for medicines.”
Notes to Editors
- The economic analysis referenced is the Impact of the EU-UK future trade relationship on the European pharmaceutical industry (EFPIA, July 2020)