This article was first published on Medium with the title 'What Brexit means for life science startups'.
The UK will leave the European Union in March 2019, after the now infamous 2016 Brexit referendum in which Brits voted to split from Europe. While many people are still holding on to hope that Brexit won’t happen (the Remain-backers), all signs from the British government point to Brexit being an unavoidable reality.
Theresa May, UK’s Prime Minister, has repeatedly said, ‘Brexit means Brexit.’ Just this week Boris Johnson, UK’s Foreign Secretary and one of the original proponents of Brexit, said that a new referendum to reverse the Brexit vote would be ‘disastrous’.
Large government agencies, including the European Medicines Agency (EMA) and the European Banking Authority have already announced they are relocating from London to European cities.
Assuming Brexit will happen in 2019, what does that mean for life science startups?
No more help from the SME Office
One big change is that UK startups will no longer be able to access help from the EMA’s Small and Medium-sized Enterprise (SME) Office. The SME Office supports small and medium-sized enterprises by providing regulatory, financial and administrative help, including fee exemptions and reductions for pre- and post-authorisation regulatory procedures, workshops and training sessions and access to advice on regulatory strategy and product development.
After Brexit, UK-based SMEs will no longer be eligible for financial and administrative assistance from the SME Office. To be eligible for assistance, life science startups must establish a legal entity in the EU/EEA and provide a certificate of incorporation to the SME Office or go through an SME regulatory consultancy located in Europe.
The UK receives a large chunk of the EU’s research funding budget. Between 2007 and 2013, UK organisations bagged €8.8 billion out of the EU’s €107 billion purse for research, development and innovation in EU Member States. That money will no longer be one the table post-Brexit.
Two regulatory agencies
The EMA has stated that once the UK leaves the EU, it will become a ‘third country’, which means that the EMA will no longer regulate any life science products developed and marketed in the UK. Post-Brexit these products will be regulated by Britain’s Medicines and Healthcare products Regulatory Agency (MHRA).
This isn’t necessarily all bad. The MHRA currently does 15–20% of the regulatory work required to oversee marketing authorisation applications. After Brexit, the agency will only be responsible for regulating the UK’s clinical research and marketing authorisations. However with less work will also come less money as the MHRA will no longer be funded by the EU budget.
New regulatory laws
Post-Brexit the UK will no longer be governed by EU law. Boris Johnson has said that it would be ‘intolerable and undemocratic’ if the UK were forced to abide by EU laws after Brexit.
The legal change-over has already started. In January 2018, the UK parliament passed the EU Withdrawal Bill which starts the process of amending and re-writing UK laws.
This means that regulatory laws may change. We don’t yet know whether the MHRA will choose to keep the same regulatory pathway in place. We do know that startups who want to market their products in the EU and in the UK will most likely need to apply for two separate marketing authorisations — one from the MHRA and one from the EMA.
After Brexit, any medicines or active substances manufactured in the UK will have to be imported into Europe and vice versa.
If the finished medicine is manufactured in the UK, it will be considered an imported medicinal product by the EU. These medicines can only be imported by an authorised importer in the EU/EEA. If companies already have marketing authorisation for a particular medicine, they will need to find an authorised importer and submit a variation to the EU accounting for these changes. Each batch of imported medicines must comply with EU Good Manufacturing Practice(GMP) guidelines and with specific marketing authorisation requirements. Exporters must also specify an EU/EEA site of batch control where each production batch will be tested to ensure it complies with requirements of the marketing authorisation.
Imported active substances must also have been manufactured in accordance with GMP for all starting materials. Active substances must have a written confirmation from the competent authority of the exporting country stating that the product has been manufactured using the same standards of GMP as the EU.
Companies often run clinical trials in multiple countries. In 2019, the EU Clinical Trials Regulation (Regulation 536/2014) will come into effect. The new regulation means that clinical trial sponsors will be able to submit a single application for a multi-country trial rather than having to apply for authorisations from regulatory bodies in each separate country.
This new regulation will no longer apply to the UK after Brexit. That means that British companies will need to apply for clinical trial authorisations from the MHRA in the UK and for separate authorisations from the EU. It isn’t yet clear whether that will mean separate authorisations from each country in which the trial will take place.
Also any medicines used in clinical trials will have to be imported into Europe if they were manufactured in the UK.
Again, the changes may not be all bad. Since the UK is now free to re-write its own laws, it could choose to streamline the British regulatory pathway and make it quicker and easier to conduct clinical trials.
Only marketing authorisation holders established in the EU/EEA can market medicines in the EU/EEA. This means that post-Brexit, British companies must have an office or facility registered and licensed in the EU/EEA if they want to market their products there.
The other option is for companies to transfer their marketing authorisation/s to a company based in the EU/EEA. This means companies based in the UK will have to submit transfer or variation requests to the EMA to keep their marketing authorisations valid. The same rules apply for UK companies holding Orphan Medicinal Product (OMP) designations. These companies must apply for a variation to this designation that states they have either opened a registered and licensed facility in the EU or they have transferred the designation to a EU-based company.
All post-marketing safety monitoring or pharmacovigilance of medicines marketed in the EU/EEA must occur in the EU/EEA. That means that any companies who market medicinal products in the EU must appoint a qualified Person for Pharmacovigilance (QPPV) who resides and carries out the pharmacovigilance tasks in the EU/EEA. If that person resides in the UK, they must either change residence and perform their pharmacovigilance tasks in the EU/EEA or the company will have to appoint a new Qualified Person.
Nothing is set in stone
Post-Brexit trade negotiations are still ongoing between the UK and the EU. Therefore none of these changes are set in stone. This makes it difficult for companies who are now in the process of running clinical trials, applying for a marketing authorisation or marketing their products.
The EMA recognises the challenges that life science companies face during the Brexit transition period. In 2017, the EMA called an industry stakeholder meeting to talk about those challenges. Stakeholders asked for the EU and UK governments to reach regulatory decisions as early as possible so companies know what to do. They also asked for a long transition period to help companies accomodate any changes.
For now we have to wait and watch for any new announcements from the EMA, the EU and the UK government.
Are you a life science entrepreneur in Britain? I would love to hear how you are planning on dealing with Brexit.
About the author
I am a freelance science writer, startup marketer and author of the book ‘How to Start a Life Science Company’ now available on Amazon as an eBook, Kindle-friendly eBook and paperback.#Biotechnology#Startup#Regulatory