“Be Prepared” – Robert Baden Powell’s now famous motto for the Scouting movement seems to be an apt aphorism when considering the possibility of a ‘no deal’ Brexit. Events and machinations within the UK Government now make the likelihood of such an outcome a distinct possibility. Therefore companies must ensure that they are prepared for such an outcome. In short, companies must prepare for the possibility that their supply chains and commercial operations will face barriers to trading similar to those that were last experienced almost thirty years ago.
Both negotiating parties have spoken to industry stakeholders about the potential impact of a ‘no deal’ exit and how it might affect the life sciences sector. Quite rightly, the impact to the sector that plays a pivotal role in patient health has been at the forefront of conversations on the issue. The UK’s House of Commons Business, Energy and Industrial Strategy Committee’s enquiry on the implications of Brexit for the UK’s pharmaceutical sector recently (May 2018) published a report (available here). The report featured a wealth of submissions from interested parties including one from the Chief Executive of the Association for the British Pharmaceutical Industry, Mike Thompson. he said “We do absolutely everything we can to get medicines to patients; I have seen us charter planes and people work through weekends. We do whatever we need to do to get a medicine to a patient. If we legally cannot get through borders or we are delayed in getting through, there is nothing we can do about it. We have been imploring people to understand that medicines are different.”
The fear that supply chains will grind to a halt and that delivery times will be elongated because of the need to check documentation at border controls is weighing heavily on the minds of many in the pharmaceutical sector. the overarching fear is; that patients will not be able to access medicines when and where they need them has caused many companies to take measures that might previously have been seen as excessive.
Suzi Ring, writing on Bloomberg.com, wrote that one company, Merck, are making plans for a ‘Brexit Supply Blackout’. The article states that Merck “is planning for the possibility of a temporary supply blackout when the U.K. leaves the European Union and may stockpile as much as six months worth of goods and revise trade routes in preparation, according to a person familiar with the matter”. There are few companies with the readily available infrastructure to do this, however it is something that many might have to consider. Companies might have to lease additional storage facilities and that will bring with it the need for a Wholesalers Distribution Authorisation and the services of a Responsible Person if the site is not already in use as a facility for storing medicinal products.
The task of preparing for a ‘no deal’ scenario brings with it significant costs. In having to prepare for such an eventuality companies are being forced to commit resources that could otherwise be used to develop new treatments or to place new products on to the market.
Media reports from May and June 2018 highlighted how GSK and Astra Zeneca stated that they might seek to increase their use of testing laboratories outside of the UK as a result of Brexit. Furthermore, GSK has stated publicly that it foresees their Brexit related costs being in the region of GBP£70 million within the next two to three years.
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