How Brexit could affect the health care industry

Topics: Biotech, Medical Devices, Prescription Drugs, Research and Development, Politics and Policy

By Josh Zeitlin, contributing editor

United Kingdom voters' decision to exit the European Union (EU), known as "Brexit," will likely mean changes for FDA, drugmakers, medical device makers and researchers, although the extent of the upheaval remains an open question.

Fifty-two percent of U.K. voters on Thursday chose to leave the EU, the economic and political union that currently binds 28 European countries across the continent. While the referendum results are not legally binding, the U.K. in the coming months is expected to start the formal legal process of withdrawing from the EU, which will give the country two years to negotiate the terms of its exit.

What it could mean for FDA

A senior FDA official told Politico's "Prescription Pulse" that Brexit likely won't affect the agreements in place between the U.S. agency and the European Medicines Agency (EMA). "Everyone will figure out a way to ensure that agreements in place will remain valid," the official said.

However, "that may be the optimistic view," Sarah Karlin-Smith and Brett Norman write in "Prescription Pulse." EMA allows drugmakers to have their medications approved for use across the EU and has been aligning its policies with FDA to make it easier for companies to submit applications to both the European and U.S. markets. EMA and FDA also have been conducting joint inspections to reduce regulatory duplication.

Now, FDA will need to establish a broader separate relationship with the U.K., and it's unclear to what extent FDA and EMA will "pursue separate arrangements with the U.K.," according to Karlin-Smith and Norman.

'Shock and fear' among pharma companies

It remains an open question whether the U.K. will establish a process to review and approve medical devices and drugs on its own or will establish a comprehensive agreement with EMA, Karlin-Smith and Norman write.

The U.K's Medicines & Healthcare products Regulatory Agency (MHRA) currently conducts about one third of the regulatory work for EMA reviews, BioIndustry Association CEO Steve Bates told STAT News, and both agencies will have to learn to navigate a post-Brexit regulatory environment.

In a statement, the association said, "Key questions about the regulation of medicine, access to the single market and talent, intellectual property and the precise nature of the future relationship of the U.K. are now upon us."

Some experts predict that Brexit won't have much of an effect on drug regulation. Former Deputy FDA Commissioner Scott Gottlieb writes in Forbes that the U.K. likely will not "exit the EMA scheme and cause drugmakers to pursue two separate and costly regulatory processes to launch products." He adds, "Both the EU member countries and their British counterparts will be invested in seeing the U.K. remain part of that joint regulatory scheme ... This is the sort of tertiary issue that will be resolved through the negotiations over the contours of Britain’s eventual exit."

However, the uncertainty has "left many in the European health sector in 'shock and fear,'" Karlin-Smith and Norman write for "Prescription Pulse."

Analysts tell STAT News that Brexit appears "likely to cause major disruptions for the drug approval process in the U.K. and across the channel in mainland Europe."

Before the vote, several global pharmaceutical companies urged voters to keep the U.K. in the EU and warned that an exit could harm drug innovation.

GlaxoSmithKline CEO Andrew Witty in a letter to The Guardian wrote that keeping the U.K. in the EU "would enable the sector to continue to operate within an established and harmonized regulatory approval system, ensuring that U.K. patients benefit from medicines more quickly, and that medicines researched and manufactured in the U.K. are available across the EU sooner."

The letter, which was signed by more than 90 life science stakeholders, added that "leaving the EU would bring added complexity and uncertainty, which is bad for business and research."

According to STAT News' Meghana Keshavan and Rebecca Robbins, the industry fears that some of the more than 222,000 people employed in the U.K. pharma industry, many of whom are from other EU countries, may leave.

In addition, about 16 percent of the funds that U.K. life science companies spend annually on research comes from EU grants, and industry officials worry there will be less funding for R&D going forward.

Broader research concerns

Researchers in other industries have expressed concern about Brexit, too, Brian Resnick and Julia Belluz report for Vox. The U.K. receives about 3 billion euros more in research grants from the EU than it provides for EU research. Pro-Brexit politicians have promised to make up lost research funds, but some officials still anticipate negative effects.

University of Edinburgh professor of clinical neurology Rustam Al-Shahi Salman told Vox that it "will immediately destabilize our ongoing European Union-funded multi-center studies," particularly -- given the regulatory uncertainty -- projects that just launched or are seeking funding.    

Other researchers told Vox that they worry Brexit could make it harder to recruit top talent due to potential restrictions on immigration.

Nobel Prize winning physicist Peter Higgs said Brexit is a "disaster" for U.K. science given the loss of EU funding and how EU membership "results in the flow of people between the different countries."

Meanwhile, Brexit proponents counter that after the U.K. leaves the EU, it will no longer be subject to its rules governing clinical trials, which "have been widely blamed for hindering U.K. medical research," Daniel Cressey writes for Nature.