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Brexit shows no signs of mercy to drugmakers

Brexit uncertainty is threatening drugmakers all over the world to invest hundreds of millions of dollars to maintain a steady supply of medicines to patients, wringing money that could have gone to developing new treatments.

Britain’s departure from the EU has forced companies including AstraZeneca Plc, GlaxoSmithKline Plc and Merck & Co. to build stockpiles of their medicines in preparation for potential shipping delays. Much of the industry can’t raise inventories because their production facilities are already at full capacity.

Brexit also threatens supplies of safe and secure medical isotopes that cannot be stockpiled because they decay quickly. According to an article in the British Medical Journal, medical isotopes are used to diagnose and treat about 1 million people in the U.K. each year. This complicates things further and eventually weaken UK’s position.

Drugmakers large and small have their hand's full counting expenditures from Britain’s exit from the EU. GlaxoSmithKline has estimated as much as about $100 million in costs.

Pfizer said in an email that its costs stem from transferring product testing and licenses, changing clinical trial management procedures, and other preventive measures to other countries will reach $100 million.

The company is working “to meet EU legal requirements after the U.S. is no longer a member state, especially in the regulatory, manufacturing and supply chain areas,” according to a filing last month where it cited the cost estimate.

Dechra Pharmaceuticals Plc said it needs to spend $2.6 million in the event of a hard Brexit, in order to duplicate testing and move product registrations to the EU to avoid trade barriers.

Pfizer referred to Brexit as part of a challenging global economic environment in filings last year. It is pushing Britain and the EU to work out an agreement to keep their regulatory systems coordinated after the Brexit.

In addition to supply and regulatory concerns, drugmakers also face the challenge of clinical trials. Human testing of new drugs and devices in the EU must be sponsored by an entity based in the bloc, and pharmaceutical companies would need to establish new representatives in the EU for their studies.

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