Illicit drugs? How Brexit risks legal limbo for medicines

LONDON A British vote to leave the European Union would threaten some prescription medicines with regulatory limbo, posing a legal headache for drugmakers, according to lawyers and industry officials.

The highly regulated pharmaceutical sector has more at stake than most from a so-called Brexit, prompting top manufacturers GlaxoSmithKline and AstraZeneca, both of which oppose exit, to draw up detailed contingency plans.

Smaller UK biotech companies, represented by the BioIndustry Association, also fear a decision to leave would disrupt the market and could affect patient access to medicines.

Currently, under EU rules, drugmakers launching a medicine get a single marketing approval that allows them to tap the entire European market of 500 million potential patients.

But European marketing authorizations, or product licences, can only be held by entities established within the European Economic Area (EEA), comprising the EU’s 28 members plus Iceland, Liechtenstein and Norway.

In the event of a British exit, UK firms could no longer apply for or hold EU marketing authorizations, unless or until the UK negotiated to be part of the EEA. Licences would have to be transferred to businesses inside remaining member states.

At the same time, new medicines approved by the EU would not be automatically placed on the British market.

To be sure, Britain would not leave the EU immediately, since there is expected to be a two-year hiatus while London agrees a departure date with its former EU partners.

But the ramifications for the drug industry could still be profound as companies prepare to transfer licences out of Britain, according to Elisabethann Wright, a Brussels-based partner at law firm Hogan Lovells, who specializes in pharmaceuticals.

There would also be uncertainty about the granting of new drug licences or the renewal of existing ones, she believes, since the default period for initial licensing is five years, followed by an open-ended renewal.

EU authorities would therefore face a dilemma on whether to approve a drug from a UK company that would not be in the bloc for the lifetime of the licence.

“There is nothing in the European code that permits the European Commission to limit the marketing authorization. The regulation is clear that an initial marketing authorization is for five years and then it is open-ended,” she said.

The European pharmaceutical industry trade body EFPIA warned last month that Brexit would create problems for drug regulation, in part because the European Medicines Agency is based in London.

“If the UK were to leave the EU, then there is a risk that this could affect patient access to medicines,” Christiane Abouzeid, regulatory head at Britain’s Bioindustry Association, said.

Brexit could also push international drugmakers headquartered in Britain to relocate, she added.

AstraZeneca said it was assessing various scenarios.

“The potential complexities around such issues as marketing authorization simply highlight the problems that could be faced by companies and patients alike in the event of exiting the EU,” a spokesman said.

GlaxoSmithKline said leaving the EU would create uncertainty, add complexity and making some short-term disruption likely, although the adverse impact on the group at the global level would probably not be material.

(Editing by Jane Merriman)

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