UK's looming exit from EU sees drugmakers diverting funds to prepare for uncertain regulatory environment

Mike Thompson, chief executive of the Association of the British Pharmaceutical Industry (ABPI), warned that drugmakers are being forced to divert funds to ensure the continued supply of medicines once the UK leaves the EU, Bloomberg reported Friday. "People will look back and say this money has been wasted," Thompson said, adding "every pound and euro, we want to invest into science and research."

While the UK may still remain part of the EU's drug-approval system following Brexit, negotiations between the parties involved are uncertain, leading drugmakers to prepare for the worst. Thompson said that investment to duplicate efforts and facilities is frustrating, "but we've got to live with it. You've got to grit your teeth and spend the money because you need to be able to deliver medicines to patients."

A source recently suggested that Merck & Co. is preparing for a possible supply blackout following the UK's exit from the EU, with the company considering stockpiling as much as six months' worth of goods and looking at alternative trade routes. Meanwhile, AstraZeneca and GlaxoSmithKline have indicated that they may have to increase their use of testing facilities in the EU, with Sanofi boosting warehouse capacity.

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Thompson's comments come as sources familiar with the matter suggested that pharmaceutical industry executives are seeking an interim deal to help maintain the supply of medicines once the UK leaves the EU, the Financial Times reported. The people indicated that the calls for a "mutual recognition agreement" were made at a meeting between senior industry representatives and ministers in May at the first gathering of the Life Sciences Council.

Under the mutual recognition agreement, safety inspections and certifications of individual drug batches in the UK would continue to apply in Europe, and vice versa. One of the sources said that while drugmakers' hopes were to maintain regulatory alignment and frictionless trade with the EU, "with 296 days to go we are going to need some very basic things to keep an integrated supply chain going."

"The benefit is that this [mutual recognition agreement] could be done speedily as a first step," the person remarked, citing similar deals already in place with countries such as Australia and Canada. The UK Department of Health said "the UK's position on medicines regulation remains clear: we want to retain a close working partnership with the EU to ensure patients continue to have timely access to safe medicines and medical innovation."

Meanwhile, AstraZeneca CEO Pascal Soriot, who is also co-chair of the Life Sciences Council, commented "what value is there in building a bureaucracy to do your own assessment of a medicine when, basically, you could say it's approved in Europe, so we will accept it, and vice versa?" The executive noted that AstraZeneca is already duplicating all its quality control processes in Sweden "so we can release medicines in Europe, under European standards."

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