EMA’s Future Location Remains in Doubt After Brexit Vote

The intense uncertainty surrounding the future location of the European Medicines Agency (EMA) and its 890-member staff looks set to continue for months, if not years, following the U.K.’s decision in June to leave the European Union.

According to an EMA statement issued in early July in response to the “Brexit” vote, “The implications for the seat and operations of EMA depend on the future relationship between the U.K. and the EU. This is unknown at present and, therefore, we will not engage in any speculation.”

The agency acknowledged that it has already received interest from countries that are keen to host the organization in the future. EMA said it welcomes this interest, but the decision will be agreed upon by representatives of EU nations, not the agency itself. 

“We are confident that the member states will take the most appropriate decision on EMA’s location and arrangements in due course, taking also into account the complex political and legal environment generated by the outcome of the U.K. referendum,” continued the statement.

EMA stressed that its procedures and activities would not be affected by the outcome of the referendum, and it will continue its operations as usual, in accordance with the timelines set by its rules and regulations. No country has ever decided to leave the EU, so there is no precedent for this situation, but the European regulatory framework is a very strong and flexible system that can adapt to changes without jeopardizing the quality and effectiveness of its work, the agency stated.

EMA said it is in close contact with EU institutions, and as soon as concrete information becomes available, it will share it with its stakeholders.

The BBC view

In the event of Brexit, “It seems certain that the EMA would move its headquarters out of London to an EU country,” wrote BBC health editor Hugh Pym in an opinion article posted just before the voting took place on June 23. “Some in the pharma world argue that this will in itself reduce the importance of this country (U.K.) in the eyes of the global drug companies.”

If Britain decides to negotiate to stay in the European Economic Area (EEA), there would not, in practice, be much difference between the regulations in force. However, if the U.K. stays out of the EEA, drug companies would need to go through a separate process with British regulators for new products because the centralized European route would not be applicable to the U.K.

“It could take years rather than months for the implications to become clear,” said Pym.

There will be a two-year period before any relocation decision for EMA is taken, but representatives in Italy, Sweden and Denmark have all expressed interest in taking over as the host country, according to the Politico website.

“Austere times may not have been on the EMA’s mind when it signed a long lease in 2014 on its newly built office in the financial district, at an annual cost of €19.4 million,” noted the Politico report.

“It houses as many as 840 of the world’s most respected regulatory and scientific experts, including those working full and part-time. But only 7% of the workforce comes from the U.K.”

A French medicines evaluation official reportedly said that given the high volume of committee meetings requiring experts’ input from throughout the EU, it is vital to choose a city with excellent inter-EU connections, such as Paris and Amsterdam, whereas Berlin is surprisingly poorly connected.

According to David Shaw, GlobalData’s chief operating officer, Brexit would have significant consequences for the pharmaceutical and medical device industries in five key areas: regulatory impacts, R&D, access to talent, intellectual property rights and market access. For manufacturers, the most immediate impact would be on the area of drug and device regulation, as a Brexit vote would be followed by a series of negotiations lasting two years.

“Given the time scales that life sciences operate, to suddenly enter a two-year negotiation process doesn’t sound like a long time, and that uncertainty makes the monetizing of investments appear more risky,” Shaw said in a release by the healthcare business information provider.

There also may be immediate disruption of the regulation of existing medicines, let alone drugs in development.

“If the U.K. exits the EU, pharma companies could even exclude the U.K. when assessing commercial potential of drugs due to the much higher access hurdle,” noted Sean Hu, GlobalData’s senior VP and head of consulting. “Instead, they might choose to focus more on the remaining EU, and treat the UK as an isolated country.”

Despite the possible drawbacks of a Brexit vote, Shaw and Hu believe the biopharma industry could still thrive, but the U.K. would need to follow a different path from the likes of Switzerland, Canada and Israel, and establish a uniquely British solution.