Medicines sector responds to Government 'no-deal' stockpiling plea

... but papers 'not a reality as we still don't know what's going to happen'

Pragmatic advice meshed with the ongoing sense of concern in Cambridge’s medicines sector as the government published its no-deal Brexit papers today.

The government has published 24 out of 80 papers outlining arrangements for sectors including financial services and medicines were the UK to leave the EU with no withdrawl agreement next March.

The treatise on medicines says the government will ensure the UK “has an additional six weeks’ supply of medicines in case imports from the EU through certain routes are affected”.

Cambridgeshire Euro MP Alex Mayer said of today’s ‘no deal’ Brexit risk assessments: “So now we have it in black and white, a plea from the Government for drug companies to stockpile medicines. No one who voted for Brexit voted for that!

“Each industry will face their own Brexit problems. From organic farmers who will have to wait nine months for new organic certification recognised by the EU, to having to change the health warning photos on cigarette packages because the EU own the copyright.

“There’s mountains more red tape with instructions for businesses about extra paperwork at borders.

“Meanwhile the cost of credit card payments between the UK and EU will go up.

“These papers confirm that a no-deal Brexit is not a credible option for Britain and must be opposed.”

At Diamond Pharma Services the papers invoked an immediate response.

“We all spent lunchtime reading them,” said technical director Antony Appleyard. “Everyone is still hoping that there is a deal as there is so much interconnectivity in medicines regulations. The hope is that we can find some mutual recognition and pragmatic middle ground.

“The EMA [the European Medicines Agency, which relocated from London to Amsterdam post-referendum] has already set out its no-deal terms. Firms will have to have all their approvals within the EU after Brexit, but this is the first time the government has responded to that no-deal scenario and in reality there’s nothing as far as I can see that is entirely a shock, it’s a logical response.

“It’s just that they’re not a reality as we don’t know what’s going to happen.”

Diamond has broken the issues raised in the papers into two parts.

“The first is the actual supply issue,” said Antony. “There have been several reports in the media stating that some major pharmaceutical companies are taking the need for regional stockpiling seriously. In addition the needs for duplicating batch release testing and certification has also been taken into consideration by large pharmaceutical firms. Although these steps might not be needed if a sector deal is reached, the risk of drug shortages is still very real in a no-deal scenario.

“The second part addresses the flow of regulatory submissions which would be carried out in the event of a no deal. The shared portals which we use at the moment we would no longer have access to, so firms will be seeking equivalence. In terms of a regulatory pathway a number of approvals for major drugs are approved centrally, through the EMA, and we won’t be part of the EMA so we have to have our own registration process. We have some mechanism for that for some drugs but not all, so we would be converting centrally authorised products (CAP) to UK marketing authorisations. It is possible to do that as we’re working to the same standards, but it’s a lot of procedural work.

“The steps suggested are reasonable and could have been predicted, but they still require much more practical detail to enable companies to be ready for all scenarios.”

The timescale of the procedural work is an unknown: how long would this process take? It could be weeks or months, varying on a drug-by-drug basis.

Mats Persson, EY’s UK Brexit strategy leader and former adviser to 10 Downing Street, said of the ‘no-deal’ Brexit guidance: “The steps announced today will help reduce some friction in the event of a ‘no-deal’ scenario, mostly for companies that import to the UK. In particular, the pharmaceutical sector will be relieved to see a unilateral recognition of EU testing and authorisation, reducing the need for costly duplications in the short-term, which could have cost some companies millions of pounds. Allowing for VAT to be dealt with in VAT returns rather than to be paid at the border will reduce cash flow impacts, particularly for smaller firms; and a selective approach to customs checks will help reduce the risk of delays and costs at the border.

“While welcome, these notes can only cover some of the impact businesses face in a ‘No-deal’ scenario and of course only cover the UK side. UK customs waving through a shipment will have limited effect if that shipment is stopped on the EU side and there are delays on that side. The Government is right to challenge the EU to reciprocate some of these arrangements to avoid the most damaging friction, not least for EU-based firms, should a deal not happen.”

“Fundamentally, no amount of ‘no-deal’ planning can fully mitigate the effects of falling back on WTO rules in March next year.”

Darren Bear, from Grant Thornton’s Cambridge office, said: “There is increasing talk of ‘no-deal’ as a likely outcome. This scenario would have the biggest impact and provide businesses with the least time to prepare. There would be no transition period and the UK would start trading on World Trade Organisation terms straight away. The uncertainty and complexity of Brexit can make it difficult for businesses to plan ahead but they must narrow uncertainty and prepare for the future, whatever that holds.”