Written by Kyle Edwards
In 1957, a German pharmaceutical company discovered that a drug it had developed to treat respiratory infections also significantly reduced morning sickness in pregnant women. Thalidomide hit the German market that year as a sedative and anti-nausea treatment and reached Britain in 1958, where it became a popular over-the-counter drug amongst pregnant women. It was not until 1961 that doctors connected a large uptick in serious birth deformities to the use of the drug. Though the British manufacturer withdrew it from the market later that year, the action came too late for thousands of children and their families. It has been estimated that the drug caused 20,000 children to be born with deformities worldwide—the vast majority in Europe—and 10,000 miscarriages and infant deaths in the United Kingdom alone.
The thalidomide tragedy served as the catalyst for harmonized European pharmaceutical regulation. In 1965, the Council of the European Economic Community approved Directive 65/65, requiring for the first time that “[n]o proprietary medicinal product may be placed on the market in a Member State unless an authorisation has been issued by the competent authority of that Member State.” Each Member State’s competent authority—a pharmaceutical licensing body—was instructed to deny the authorization of a drug that “is harmful in the normal conditions of use” or if “therapeutic efficacy is lacking or is insufficiently substantiated.”
At the 50th anniversary of EU pharmaceutical legislation in 2015, the European Commission remembered the thalidomide tragedy as the “impetus” for a half century of “progressive harmonization of requirements for the granting of marketing authorisations and post-marketing monitoring implemented across the entire European Union.”
The harmonized scheme in place today offers both a safer and more innovation-friendly market for drugs than the pre-thalidomide era. The ease with which medical products, like consumer products more generally, can cross European borders means that the safety of patients in any Member State is only as strong as the weakest national regulatory system. By moving from national to supranational standards for drugs and medical devices in the wake of the thalidomide disaster, the European Union has ensured that drugs sold on the single market are safe and effective for use regardless of their origin. Furthermore, the single market and its single set of regulations drive innovation: it is much less costly for drug companies to seek approval and authorization for the single market than to seek individual approval in 28 member states. This translates to faster access for patients to new and improved treatments.
Now, with UK Prime Minister Theresa May planning to invoke Article 50 of the European Union’s Lisbon Treaty by the end of March 2017, the future of this fifty-year endeavor is in jeopardy. The United Kingdom plays a disproportionately large and important role in driving the development of EU medicines regulation. The European Medicines Agency (EMA) is currently headquartered in London and the United Kingdom’s licensing authority—the Medicines and Healthcare Products Regulatory Agency (MHRA)—performs by contract over a third of the EMA’s drug evaluation and post-marketing monitoring. The European Union, then, relies heavily on UK medical and scientific expertise on pharmaceutical regulation and would suffer at least in the short term from losing it. But the United Kingdom faces an even greater threat. As the head of the Association of the British Pharmaceutical Industry observed, “If we were to split into a UK process and a European process of drugs regulation, it would result in global companies making the rational decision to prioritize patients in a market where they would get access to 500 million patients compared to 60 million. So the question is how we can work together to find a creative way where we can participate in the European Medicines Agency and deliver benefits to British patients.” Industry leaders worry in particular that the creation of a separate UK regulatory system will lead pharmaceutical companies to launch new drugs in the larger EU market and only later, in a second wave of submissions, seek approval in the United Kingdom, which would delay access to new medicines for UK patients.
It is vital to UK public health and patient safety, as well as to the £60 billion British pharmaceutical industry, that May’s government preserve the United Kingdom’s inclusion and active participation in the existing supranational regulatory scheme. Important in its own right, the future of drug regulation in the United Kingdom also provides a lens through which to understand the incomplete solution of the so-called Great Repeal Bill, which May hopes to use to transfer existing EU law into UK law, and the uncertain—rather than “orderly”—exit it spells for patients and industry.
The Current Regulatory System: Why the Great Repeal Bill Won’t Work for Medicines
Currently, manufacturers can seek marketing authorization for new drugs in the European Union by one of two pathways. First, they can apply to the EMA’s centralized authorization procedure, the process by which most new drugs are approved for EU distribution today. If the EMA approves the application, the drug can be marketed in all EU Member States and European Economic Area (EEA) countries. Certain new drugs—by and large the most innovative ones—must be approved through this pathway: drugs containing new active substances that treat HIV or AIDS, cancer, diabetes, neurodegenerative diseases, auto-immune disorders, and viral disease, as well as medicines derived from genetic engineering, those for rare diseases, and those that incorporate modified genes, cells, or tissues.
All other drugs may either go through the centralized procedure or through a second pathway, via one of the Member States’ national authorization procedures. Each Member State has its own “competent authority,” or licensing body. In the United Kingdom, that body is the MHRA. If one Member State’s competent authority has already approved a drug, the manufacturer can apply to one or more other Member States for “mutual recognition” of that approval. Alternatively, for drugs that have not yet been approved anywhere in the European Union, the manufacturer may opt for a “decentralized procedure” over the EMA’s centralized option by submitting an identical application to multiple Member States, one of which it may request to serve as the primary assessor of the application.
The substantive framework for these approvals has emerged from a medley of EU directives and regulations. The Community Code Directive set out provisions for the authorization, manufacture, and distribution of drugs across the European Union. The EMA Regulation established the EMA and its centralized authorization procedure. A set of regulations and directives enacted in 2010 greatly advanced harmonized post-marketing pharamacovigilance to ensure only safe and authentic medicines make it into patients’ hands. More specific standards for meeting the legal requirements of quality, safety, and efficacy are set out in constantly evolving scientific guidelines created by the EMA’s Committee for Medicinal Products for Human Use. While EU directives require Member States to enact domestic legislation to give effect to the law, regulations are self-implementing and don’t require action on the part of national legislatures. As such, UK law currently reflects some but not all of this legal framework for pharmaceutical regulation.
In October, May announced plans for a Great Repeal Bill, which will repeal the European Communities Act of 1972 and “convert the ‘acquis’—that is, the body of existing EU law—into British law.” This, May suggested, would allow Parliament to reform, repeal, or leave in place various parts of EU law in a piecemeal, orderly fashion: “[W]e will give businesses and workers maximum certainty as we leave the European Union. The same rules and laws will apply to them after Brexit as they did before.”
That is perhaps feasible for what I’ll call static legislation. For example, May has promised to preserve workers’ rights that have been enshrined in EU legislation. These substantive standards, like paid annual leave, may be transferred fairly easily into UK law. But for dynamic legislation—that which creates and relies upon EU-level regulatory authorities and continually developing supranational standards—transferring provisions won’t just be ineffective, it also doesn’t make sense. For instance, the mutual recognition procedure provides a pathway for drug manufacturers that have a drug approved in one Member State to market it in other Member States. Before Brexit, this means that a drug the MHRA approves can be sold in France or Germany. But once the United Kingdom is no longer a Member State, simply transferring those provisions into UK law won’t maintain the ability of drug manufacturers to seek EU approval based on an MHRA decision. Similarly, the vast majority of novel treatments introduced in Europe are legally marketed based on the centralized approval of the EMA. The promise of the Great Repeal Bill doesn’t make clear whether the MHRA will have to conduct its own set of approvals duplicative of the EMA’s work or whether future EMA approvals will be automatically recognized in the UK. Announcement of the Bill also doesn’t explain whether—after Brexit but before the transferred EU pharmaceutical law has been examined and revised by Parliament—the UK will accept new regulations and guidelines that transform the EU approach to drug approvals, like the 2010 pharamacovigilance package.
At least for medicines, then, May’s Great Repeal Bill offers the false promise of continuity while actually leaving drug companies and UK patients with more questions than answers. Determining a true plan for medicines regulation post-Brexit requires an appreciation of the important role that EU regulation and the EMA centralized authorization procedure currently play for the United Kingdom.
The Importance of United Kingdom Participation in the EU Regulation of Medicines
While the United Kingdom was preparing to vote on the Brexit referendum, the House of Commons Science and Technology Select Committee was conducting an inquiry into “EU Regulation of the Life Sciences.” Their report on the inquiry makes clear the mutually beneficial relationship that has developed between the EMA and the United Kingdom. Having a harmonized system allows drug developers to apply just once, rather than 28 times, for marketing authorization in Europe, significantly reducing costs for British drug companies as well as allowing patients to access new medicines that a developer might not otherwise affirmatively seek to market in the UK. As the Bioindustry Association (BIA), the trade association for UK bioscience, explained, “You can see the benefits from working in a harmonized scheme that gives you access to a very large market—27% of the global market rather than 3% of the market if it was the UK alone.” BIA, the Academy of Medical Sciences, and the UK Department of Business, Innovation, and Skills (BIS) all stressed the importance of the EU-level regulation of medicines for attracting investment in the life sciences in the United Kingdom and getting new products to patients. High, evidence-based standards also ensure that British patients are only exposed to safe and effective drugs.
In addition to these benefits of the single market and harmonization, the United Kingdom has also been able to wield an extraordinary amount of power in shaping EU drug development and approval to date. The Committee heard repeatedly that “UK scientists have considerable influence on EU groups and decision-making bodies, and therefore play a considerable role in shaping EU policy for science,” resulting in “a firm UK imprint on EU policy.” Ian Hudson, the Chief Executive of the MHRA, commented, “The MHRA is one of the bigger agencies across the European Union and puts a lot of resources into the EMA . . . . [W]e take a lead in the greatest number of assessment works, whether new assessments, pharmacovigilance or scientific advice.”
Beyond the UK’s disproportionately large amount of work on the day-to-day aspects of approval, it has also been very successful in guiding international pharmaceutical standards in a way advantageous to British patients and drug companies. For example, the Clinical Trials Directive passed in 2001 has been widely criticized for raising the costs of—and thus reducing—new drug trials. The MHRA played a leading role in successfully lobbying for and designing a new Clinical Trials Regulation, passed in 2014 and set to take effect in 2018, which is expected to greatly improve the clinical trials process. More generally, BIA offered high praise to the MHRA during the parliamentary inquiry for being “able to exploit its reputation, leadership and expertise to positively influence the EU medicines regulatory regime.”
But the Committee’s report raised other areas of EU medicines policy that the United Kingdom hopes to change in the future. For instance, the MHRA and UK generally take a more innovation-friendly approach to cost-benefit analysis in the life sciences, while the EU regulatory framework is “generally considered to have been heavily informed by the precautionary principle.” The precautionary principle instructs against taking actions that may lead to unacceptable but uncertain harm. When applied too stringently in the life sciences sector without due regard for the balance between costs and benefits, it can stymie medical innovation. As a result of its inquiry, the Committee recommended that the government work to “engender in the European Commission and other member states a far more robust scientific application of the precautionary principle,” a change in course that would require the MHRA to retain some negotiation powers after Brexit.
The evidence received by Parliament makes clear the importance of retaining not only access to the single market and its harmonized regulatory framework, but also participation in the process of setting substantive standards. As the Royal Academy of Engineering told the House of Lords Science and Technology Select Committee during a parallel inquiry, “In emerging fields of strategic importance to the UK it is vital to ensure first mover advantage in the creation of standards. For UK companies to not lose out against international competitors the UK needs to play a leadership role in developing international standards.”
The Insufficiency of Proposed Post-Brexit Options
In September, a UK EU Life Sciences Steering Committee representing the interests of the life sciences sector presented a report to May’s government on the potential impacts of Brexit. Recognizing the importance of the harmonized system, the report “recommends maintaining alignment with the EU regulatory system . . . through a regulatory cooperation agreement, under which the UK would benefit from being able to be an active participant in European regulatory procedures and decisions, ideally continuing to influence future policy, guidance, and legislation.” However, neither of the post-Brexit models that are often floated—the Norway model and the Swiss model—would sufficiently preserve the symbiotic relationship between the MHRA and the EMA.
Some have recommended that the United Kingdom join the European Economic Area (EEA)—the so-called Norway model. The EEA comprises all EU Member States in addition to Iceland, Lichtenstein, and Norway. EEA membership is attractive in that it would provide access to the single market after Brexit. For drug approval, that would allow the United Kingdom to retain the EMA centralized approval system rather than requiring MHRA to approve each and every new drug itself. Lichtenstein automatically approves all drugs that the EMA signs off on, and Norway and Iceland both maintain streamlined processes for drugs that have been granted EMA approval. However, this is an unlikely path forward because EEA members must commit to the free movement of persons, an unpopular requirement in the United Kingdom that contributed significantly to the leave vote. Furthermore, even if the Norway model were politically feasible, EEA members are only granted observer status in deliberation and decision-making on EU policies. That would significantly limit the MHRA’s influence over new regulations and guidance. Thus, while this path would preserve UK access to the single market, it would not preserve the United Kingdom’s ability to influence the laws and standards that it would be required to follow, standards that the UK public relies upon every day in taking medicines. Given the MHRA’s expertise and important role to date in driving forward EU pharmaceutical regulation, this would not be ideal for patients, who may bear the opportunity cost of the United Kingdom’s diminished influence on the regulatory scheme.
Another option is to join the European Free Trade Association (EFTA), a choice known as the Swiss model. EFTA members—Switzerland plus the three EEA countries—can engage in free trade with the European Union in all non-agricultural goods. Like the Norway model, this would allow drug companies in the United Kingdom to sell on the single market. However, unlike the EEA countries, Switzerland maintains its own medicines regulatory authority, called Swissmedic. All drugs marketed in Switzerland must be approved by Swissmedic, even if they have already been approved by the EMA. This would be a costly undertaking for the MHRA, and especially worrisome given that any kind of Brexit will likely see the MHRA lose its contracts for performing EMA evaluations, which currently make up a third of the agency’s income. It would also likely result in patients waiting longer for new drugs: though the UK is currently the third-ranked country for the number of new drug launches, 52 percent of industry respondents predict that this kind of disjuncture from the harmonized EU scheme would diminish the United Kingdom’s attraction for launches.
It is vital that the United Kingdom retain both its access to the single market for drugs and medical devices and a seat at the table in shaping the regulations that drive medical innovation and protect patient safety. This will be difficult given the European Union’s promise that the single market and free movement of people will come or go hand in hand. However, even if the United Kingdom were able to negotiate for access to the single market, that would not permit MHRA to continue influencing EU regulations as it currently does. In negotiations with the European Union, May’s government should emphasize the leadership role that MHRA has played in EMA policymaking and authorization to date in seeking a special regulatory agreement. That agreement must preserve the United Kingdom’s important role in maintaining the five-decade-old endeavor of ensuring safe and effective drugs in Europe through harmonized regulation. Failure to do so may delay patient access to new, potentially life-saving treatments or allow the next thalidomide post-Brexit to slip through weakened regulatory cracks.
 Laurence Cawley, Living and Aging with Birth Defects Caused by the Drug Thalidomide, BBC News, July 30, 2013, http://www.bbc.com/news/uk-england-23500853.
 Daniel Carpenter, Reputation and Power: Organizational Image and Pharmaceutical Regulation at the FDA 240 (2014).
 Harold Evans, Thalidomide: How Men Who Blighted Lives of Thousands Evaded Justice, Guardian, Nov. 14, 2014 (2:11 P.M. EST), https://www.theguardian.com/society/2014/nov/14/-sp-thalidomide-pill-how-evaded-justice.
 James Meikle, Thalidomide “caused up to 10,000 miscarriages and infant deaths in the UK,” Guardian, Mar. 6, 2016 at 12:00 P.M. EST, https://www.theguardian.com/society/2016/mar/06/thalidomide-caused-up-to-10000-miscarriages-infant-deaths-uk.
 John S. Gardner, The European Agency for the Evaluation of Medicines and European Regulation of Pharmaceuticals, 2 European L.J. 48, 52 (1996) (“[T]he Europe-wide experience with thalidomide was an impetus for the Community to replace national standards on the authorisation and marketing of drugs with European standards.”).
 Council Directive 65/65, art. 3, 1965 O.J. (L 22), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31965L0065:EN:HTML.
 Council Directive 65/65, art. 5, 1965 O.J. (L 22), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:31965L0065:EN:HTML.
 European Commission Directorate-General for Health and Food Safety, 50 Years of EU Pharmaceutical Legislation, European Commission, http://ec.europa.eu/health/human-use/50years_en.
 Andrew Jack, Brexit Briefing: Bitter Medicine, Financial Times, Aug. 4, 2016, https://www.ft.com/content/bad38c64-5a34-11e6-9f70-badea1b336d4.
 Katie Osborne, Brexit Implications for British Pharma…a Month on, Pharma Letter, July 23, 2016, http://www.thepharmaletter.com/article/brexit-implications-for-british-pharma-a-month-on.
 Authorisation of Medicines, European Medicines Agency, http://www.ema.europa.eu/ema/index.jsp?curl=pages/about_us/general/general_content_000109.jsp.
 European Commission Directorate-General for Health and Food Safety, EudraLex – Volume 1 – Pharmaceutical Legislation for Medicinal Products for Human Use, European Commission, http://ec.europa.eu/health/documents/eudralex/vol-1_en; European Parliamentary Research Service, Medicinal Products in the European Union: The Legal Framework for Medicines for Human Use, European Parliament (2015), http://www.europarl.europa.eu/RegData/etudes/IDAN/2015/554174/EPRS_IDA(2015)554174_EN.pdf.
 Council Directive 2001/83, 2001 O.J. (L 311), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2001:311:0067:0128:en:PDF.
 Council Regulation 726/2004, 2004 O.J. (L 136), http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:L:2004:136:0001:0033:en:PDF
 Council Directive 2010/84 2010 O.J. (L 348), http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32010L0084&from=EN; Council Regulation 1235/2010, 2010 O.J. (L 348), http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32010R1235&from=EN.
 Theresa May, Theresa May – Her Full Brexit Speech to Conservative Conference, Independent, Oct. 2, 2016, http://www.independent.co.uk/news/uk/politics/theresa-may-conference-speech-article-50-brexit-eu-a7341926.html.
 Jack Simson Caird, Legislating for Brexit: The Great Repeal Bill, House of Commons Library 25, Briefing Paper No. 77793 (2016) (“An example of where transposition may give rise to difficulties is when the laws in question make reference to, and depend upon, European institutions or agencies.”).
 House of Commons Science and Technology Select Committee, EU Regulation of the Life Sciences (2016), http://www.publications.parliament.uk/pa/cm201617/cmselect/cmsctech/158/15806.htm.
 Id. at ¶14.
 Id. at ¶31.
 Id. at ¶33.
 Xavier Bosch, Europe’s Restrictive Rules Strangling Clinical Research, 11 Nature Medicine 1260 (2005), http://www.nature.com/nm/journal/v11/n12/pdf/nm1205-1260b.pdf?origin=publication_detail.
 EU Regulation of the Life Sciences, supra note 21, at ¶30.
 Id. at ¶59.
 House of Lords Science and Technology Select Committee, EU Membership and UK Science (2016), at ¶34, http://www.publications.parliament.uk/pa/ld201516/ldselect/ldsctech/127/12702.htm.
 UK EU Life Sciences Steering Group, Maintaining and Growing the UK’s World Leading Life Sciences Sector in the Context of Leaving the EU (2016), http://www.abpi.org.uk/our-work/library/industry/Documents/UK-EU-Steering-Group-Report.pdf.
 Id. at 12.
 See, e.g., Liz Alderman, After ‘Brexit,’ Britain Could Look to Norway as a Model, N.Y. Times, July 13, 2016, http://www.nytimes.com/2016/07/14/business/international/after-brexit-britain-could-look-to-norway-as-a-model.html?_r=0.
 Yulia Privolnev, Brexit’s Impact on the Global Pharmaceutical Industry: Authorization and Pricing, Pharmaceutical Online, July 12, 2016, http://www.pharmaceuticalonline.com/doc/brexit-s-impact-on-the-global-pharmaceutical-industry-market-authorization-pricing-0001.
 Joe Watts, Theresa May Indicates ‘Hard Brexit’ and Dismisses Free Movement Deal to Keep Single Market Access, Independent, Oct. 2, 2016, http://www.independent.co.uk/news/uk/politics/theresa-may-hard-brexit-soft-article-free-movement-deal-single-market-access-a7341886.html.
 Yulia Privolnev, Brexit’s Impact on the Global Pharmaceutical Industry: Future Access to the EU Common Market, Pharmaceutical Online, July 6, 2016, http://www.pharmaceuticalonline.com/doc/brexit-s-impact-on-the-global-pharmaceutical-industry-future-access-to-the-eu-common-market-0001.
 See, e.g., Five Models for Post-Brexit UK Trade, BBC News, June 27, 2016, http://www.bbc.com/news/uk-politics-eu-referendum-36639261.
 Jack, supra note 10.
 Luke Tryl, Finding a Cure: Getting the Best Brexit Deal for Britain’s Life Sciences 9, 22, http://www.publicpolicyprojects.com/wp-content/uploads/sites/4/2016/11/PPP-QuintilesIMS-Finding-a-cure-report.pdf.