A New Location for EMA?

BioPharm International spoke with Tommy Fanning, head of biopharmaceuticals for IDA Ireland, to get a perspective on how Brexit may affect the pharmaceutical industry.

Brexit's affect on biopharma

BioPharm: How does Brexit specifically affect the biopharmaceutical industry?

Fanning: I think how it’s affecting it today is they’re all probably in a huddle trying to decide what footprint they need in Europe in the future. So, if you think about the biopharma industry, they will already have a strong footprint across Europe, but some of those mid-sized companies may only be in the United Kingdom in the European context. And they’re obviously going to have to look at what they need to do to be sure their products are licensed, approved, and sold in all markets in the same way they’ve always been done.

If we look at the broader sense as well around Brexit and in the context of Britain itself, Britain has always prided itself in terms of its research and development ability around medicines. If you look at areas like Oxford or Cambridge, there are very strong clusters of discovery work going on and development work in small early-stage companies. Those companies themselves will be looking to the future and seeing where they need to do that.

And the other piece in all of that, when Britain decides to invoke Brexit, what will happen to the funding that was coming from European funds for medicinal or scientific research and how will that be replaced? So, I think there are a lot of questions in there. If we talk about the idea of business decisions, it’s around the passporting of and approval of products for sale in Europe. If you think of innovation, it’s around research and research funding.

And if we think about global expansion, and this is something we here in Ireland look at very closely, global expansion can take a number of forms,  particularly in relation to manufacturing. As it turns out, Ireland has a much stronger base in manufacturing across sectors if we go outside life sciences for a minute. Twenty percent of value added to GDP in Ireland is from manufacturing. That figure is a lot less in the UK today. And then when we look more specifically, and I’ve seen some figures recently from the Financial Times on this front, quite a number of foreign direct investment (FDI) projects that go into the UK [are often] for the UK market. Where as if you look at Ireland, Switzerland, or outside Europe at places like Singapore we’re looking at much larger investments, capital investments, and much larger plants serving global markets. So, as a first in the context of Brexit, yes there will be some things for the companies in the biopharmaceutical industry to look at. But on the same basis, I think companies just need to clean house in the context of products for Europe. 

BioPharm: What is the possible long-term impact of Brexit on the pharma industry?

Fanning: I think the long-term impact on the pharma industry will be quite large. I would suspect, rather than know for a fact, that the companies will reduce the number of serious capital investments that they might make in the UK. I don’t know where those investments might go otherwise. There is another fly in the ointment in all of this, of course, which is in America, Donald Trump, and the current conversation there about bringing back manufacturing to the US. So, I could also see companies looking at having a stronger manufacturing base in the US and perhaps a smaller footprint very specifically for the European market. Because if we think about many of the plants today that are in Europe, they are not just manufacturing for Europe but they are also FDA approved, sending back API or sending back drug substance for the biologics side for final manufacture in the US. And that might change, but it’s too early to say.

BioPharm: Will Brexit have a negative impact on the UK?

Fanning: In a broad sense, I think so. The British prime minister, Theresa May, and her team, has a working team around Brexit from the pharmaceutical industry, which includes GSK and AstraZeneca, the two major drug companies with strong footprints in the UK today. But I think there are too many things that will require global drug companies to look elsewhere. I don’t think overnight, there’s going to be a big reduction in employment, but I think over time, the commercial reality will require these companies to have another location. 

Moving EMA

BioPharm: Are there specific countries that are well suited to the relocation of European Medicines Agency (EMA)?

Fanning: EMA, if Brexit is invoked, will move out of the UK. If there are other agencies, they will, likewise, move outside of the UK, because the UK will no longer be part of Europe. So, we just have to take that as a fact.

In the context of  EMA, quite a number of European countries have put a hand up and said: we will be bidding for this; we have the right location for this. We likewise in Ireland feel we have a strong case to be made. We have a very strong industry here. We have a very strong regulator in the Health Products Regulatory Agency (HPRA), which is a mirror of what the Medicines and Healthcare products Regulatory Agency (MHRA) is in the UK.

Our HPRA is already doing a lot of work with EMA; it is already doing training for EMA; and sitting on management committees within EMA. So, they understand the needs of EMA very well. But if you bring that out a bit and look again at Ireland as a location, I think the most important thing is to look at EMA itself and how important it is to Europe, how important it is to European citizens that it continues to work and operate in a professional manner.

EMA is a very highly respected agency today with some very good people based in Canary Warf in London. Those people need to come with the agency. The work they do needs to continue with no hiatus. It has to be in some way seamless. And, we do think that Dublin can provide that venue. We’re building quite a lot of new high class A buildings, office buildings, in the city of Dublin, a number of which could be suitable to house EMA. We’ve got a multicultural, multilingual environment in Dublin today, and that’s just not in the life-sciences community, it’s also from the digital media community. All of the top 10 born on the web companies have bases in Ireland with multilingual workforces: LinkedIn, Google, Facebook, Twitter, they’re all here and in large numbers.

And EMA won’t just require scientifically qualified staff. EMA will also require IT staff, data analytic staff, administrative staff, and financial staff. We do feel that Dublin will be a very good location. Ryanair [offers] low-cost flights from Dublin to almost all locations in Europe today. Something we couldn’t have said a decade ago. And that continues to expand. So, I think Dublin is also very well connected in terms of the industry.

Another little piece that maybe is not so clear right now is the fact that today EMA looks after and regulates the medicines products industry, but I would expect, and this is just something from my own experience, that they will also in the future, because of the advent of combination products, want to be looking at regulating devices as well. And besides Ireland having very strong global biopharma industry here, we also have a very strong medical technologies industry, so we have experience on both sides of that fence.

BioPharm: Has any country done anything specific to throw their hat in to move EMA there? Has a process started yet?

Fanning: No. Any country that has put their hand up has done so in a vacuum, because there is no process today. There is no timeline today. So, it’s a question of saying, well look, we want to be ready when that time goes. So, in an Irish context, there is a working group across all stakeholders within government and then consultation with those outside of government to make sure that Ireland’s bid will be the best it possibly can be. The same would apply for any other country. The one exception in terms of has any country done anything, I believe Italy are offering a building, as in they had an expo in Milan a number of years ago and they have a building or set of structures that could be suitable, but that is the only specific proposition that I’ve seen put forward.

BioPharm: Have you seen any action at pharmaceutical companies in response to Brexit (e.g., plans to move locations, changes in regulatory submissions, etc.)?

Fanning: Well if you look at the importance of EMA again, it is an attractor in itself. And you will find there is quite a large number of European headquarters or large European footprints of all of the drug companies in London. Most specifically, the Japanese have come out with an open public letter to say please don’t move the EMA out of London because the majority of their European headquarters are there. I don’t believe that’s a possibility. So, on that basis, the question arises, will these companies then move their bases somewhere else? And this would include teams that would have the commercial responsibilities for Europe, the management of clinical trials for Europe, regulatory affairs, pharmacovigilance, pharmacoeconomics, those type of activities, and then backing those up, more recently, data platforms and data analytics specifically for the commercial or business development people. So, I think there’s quite a lot of questions to be asked and no answers right now.

What we’re seeing in a broader sense, one of the big areas is obviously financial services and financial products being passportable in Europe. I think the same analogy holds true for drugs and the approval of those drugs. And on that basis, I think right now, the companies are looking at what they need to do to continue to do business in Europe. And that doesn’t mean in any way closing down operations they already have in the UK. What I can see, and some companies are doing this already, is the idea that they might have a satellite group. They might build up another team that complements what’s in London because there’s a talent pool and there’s a skill pool there already that the companies will not want to lose.