Last-ditch attempt to secure ‘bare minimum’ deal on medicines, MPs told

The Chief Executive of the UK’s pharmaceutical industry association has today warned MPs about the consequences of not agreeing a comprehensive post-Brexit trade deal or an urgent agreement on medicines while the trade talks continue.

Richard Torbett told the Commons EU Future Relationship Committee that negotiators must consider the impact of causing unnecessary disruption and delays for UK and EU medicines whilst in the midst of a global pandemic.

The Committee heard that companies were working in a constant state of emergency with supply chains under incredible pressure from COVID-19:

"We need the bare minimum in order to safeguard risk to the supply chain [for medicines]. If we don’t get this there will be increased complexity, duplication and cost – the last thing we need during COVID-19. The lack of clarity is frustrating."

He said that without a Mutual Recognition Agreement the industry across Europe will be wrapped in red tape, which will be damaging to both the UK and the EU.

And with 15 days until the deadline for negotiations to end there is still no clarity about how companies are meant to legally dispense the vast majority of medicines in Northern Ireland. A one-year ‘phase in’ to the Protocol is the only way to avoid disruption:

"We're still not clear whether medicine coming from the EU into the UK and then onto Northern Ireland would have to be tested again. If somebody decides at some stage they need to be tested, those facilities don't exist."

Speaking after the Committee session, Richard Torbett said:

“Companies are working in a constant state of emergency, preparing for all possible Brexit outcomes. We have been very clear about the need for a comprehensive FTA for four years and yet we now find ourselves in the final hours requesting the bare minimum in order to safeguard patients.

“Why would you add complexity, confusion, duplication and disruption at this crucial time? The UK and the EU can choose to end the uncertainty now.”

His remarks follow a joint appeal by the ABPI and EFPIA – the European pharma trade body this week. The trade bodies asked negotiators to prioritise medicines in trade talks – which is well within their gift as wider trade talks progress.

Not reaching an agreement risks avoidable, short-term medicines supply delays as well as long-term economic damage to the UK and EU economies. But with just 15 weeks to go until the end of the transition period – and with the focus rightly on Covid-19 - companies are still working in the dark on some critical issues.

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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 €2.5 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.

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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.

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.”