A UK newspaper, The Guardian, has reported that EU officials will shortly be scheduling the transfer of EU agencies out of the UK as part of the Brexit divorce proceedings. In a report on April 15th, the paper identified two agencies in particular, the European Banking Authority (EBA) and the European Medicines Agency (EMA), indicating that their new locations could be identified as early as June of this year. The development is in sharp contrast to previous guidance on the transfer of the EMA and may lead to significant knock-on effects for drug sponsors and regulators both within and outside of the EU.
In an official statement in July 2016, shortly after the UK Brexit referendum, the EMA commented that the agency “[w]ould like to underline that its procedures and work streams are not affected by the outcome of the referendum. The Agency will continue its operations as usual, in accordance with the timelines set by its rules and regulations.” However, there has been considerable developments since this announcement, not least of all clarity from the EU in respect of how Brexit negotiations might proceed vis-à-vis discussions on divorce first and trade later. Such a position adopted by the remaining 27 EU states may in part arise from an apparent drift towards a “hard exit” by the ruling UK conservative party.
In a separate article, reported in January in the Financial Times (FT), an interview with the Executive Director of the EMA, Prof. Guido Rasi, provided additional information beyond the Agency’s July 2016 statement. The FT reported Prof. Rasi as having significant concerns on the logistics of any transition of the EMA to a new jurisdiction, indicating that a minimum of 2 years would be required to avoid delays in drug approval timelines. If they were to occur, such delays could have significant impact on the global pharmaceutical and biotech sectors, and on other global regulators including the US FDA and Japanese PMDA. Compounding the challenge, Prof. Rasi reported that seven senior executives had resigned from the EMA since the Brexit vote and that such a departure of senior expertise was considerably more than had been seen in the previous 10 years put together. In addition, a staff survey within the EMA showed that approximately 50% of staff would leave the Agency if the new proposed location was to an undesirable city. Replacing staff in times of such uncertainty has also become difficult according to the FT report. The net effect of the current uncertainties, coupled with the prospect of increasingly hardened negotiating positions on both sides, may create major concerns for the pharma industry. As such, the consequences of Brexit are appearing to become increasingly definitive and irreversible for the UK, with near-term economic impacts coming into focus within the coming months.