Wednesday

22nd May 2019

Column / Health Matters

Is Brexit a risk to our health?

  • People seem more worried in the Brexit debate about the relocation of the European Medicines Agency building, than the more important issue of risks to European public health. (Photo: Rob Bye)

The most prominent concern raised in the Brexit debate on healthcare, so far, has been the relocation of the European Medicines Agency (EMA) from London to another keen host city.

This issue is relatively trivial, given that the UK and EU faces a greater problem - critical health products could be stuck at the borders in under two years, when the Article 50 timeline ends.

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  • If products developed and manufactured in the UK cannot be freely sold to the EU single market, inward investment by non-EU countries may be at risk. (Photo: PressReleaseFinder)

There is a risk that health policy will be a neglected concern for policymakers on both sides, considering that Brussels has never held true competence to legislate on the area.

In October 2016, the then president of the European Parliament, Martin Schulz, asked parliamentary committees to sketch out the main challenges posed by Brexit to support the EU’s preparations for the negotiations.

The Committee on Environment, Public Health and Food Safety (Envi) responded in January of this year and raised apprehension regarding the EU’s primary responsibility in health – setting the process by which medicines and medical technologies are approved for sale on the single market.

Access to health products

Health is one of the most highly regulated sectors, because of the high potential impact on people’s health and well-being.

The EU legislation that enacts these systems is highly complex, actively applied (including, for example, regular in-person inspections) and changes regularly to try and find a balance between allowing patients access to exciting new treatments quickly, and ensuring that they are safe.

All aspects involved in the development of medicines – including clinical trials – must be conducted in line with specific EU legislation.

Manufacturers must prove the safety and efficacy of their medicine to the EMA before it can be sold.

Medical devices and diagnostics are approved for sale in the EU in a different manner towards the same end – by the awarding of CE marks by notified bodies under the watch of national governments and the European Commission. CE marks indicate indicate that the products conform with relevant EU directives regarding health and safety,

The UK’s departure from this system, especially as a prominent player in the life sciences sector, poses challenges, which was highlighted by the parliament’s Envi committee.

As neither a full EU member nor a member of the EU single market, the most likely future for the UK, as it looks today, will be based on a decision on whether to adopt its own sovereign system to ensure safety and efficacy of health products, or rather to write the current EU legislation into national law books.

The EU would likely only accept a mutual recognition of this kind if the UK commits to implementing all future changes to its national laws, too, but without the power that the country has today to influence those laws.

An agreement must be reached before the exit for the continued availability of products across both UK and EU territories, otherwise patients on both sides may not have access to products when they need them.

From the UK perspective, there are no persuasive arguments in favour of developing a new and different system of regulating health products, as it would complicate the situation for manufacturers who import and export products from the UK.

Frictionless borders

The UK has been a popular destination for inward investment from the US in the health sector. The EU’s economy and public health have benefited from this dynamic.

There is a tension now that threatens to impact the status quo on healthcare investment, especially in the UK.

There are two types of overseas investment. Firstly, infrastructure to make existing products available overseas (sales, marketing, business) and, secondly, infrastructure to develop and make new products (R&D and manufacturing).

Both types of investment are valuable, but the development of new and breakthrough products is especially prized. The value generated is considered to be higher, particularly due to its potential to create more high-level scientific and engineering jobs.

If products developed and manufactured in the UK cannot be freely sold to the EU single market, and without any trade agreements in place with the rest of the world, the UK risks its favourable position for inward investment by non-EU countries.

Company supply chains for delivering products to healthcare professionals and patients are as complex as the legislation, and based on the long-established status quo that a product manufactured in London yesterday can be packaged and sterilised in Berlin today and used on a patient in London again tomorrow.

This process heavily relies on frictionless borders.

While tariffs are not a major concern in health products given WTO humanitarian agreements, customs checks and paperwork caused by leaving the EU Customs Union would impact the ability to supply products in a timely fashion.

Given the acerbic early exchanges on Brexit, a scenario of restricted trade must not be discounted.

What about Ireland?

This also impacts Ireland, another favourite investment destination for US healthcare firms, considering that it would will be “cut off” from the rest of the EU geographically.

Today, transporting products by sea and by road through the UK to the EU from Ireland is commonplace.

In health, as in other sectors, there has been speculation about other business capitals vying to take business from Britain.

Some companies have already made symbolic announcements including Morgan Stanley. This is an overly simplistic view – the EU doesn’t just have to compete with the UK, it must vie with the world for investment.

While there is more business optimism around the eurozone economy than any time since 2008, it is not generally an exciting investment proposition for high returns.

A CEO of a healthcare company could be forgiven for thinking that redirecting investment from the UK to India is a more forward-thinking move than taking it to France. A CEO of a US company may be well advised to invest at home, given that they could be chided by president Donald Trump for not being seen to put “America First”.

Horizon 2020

Horizon 2020 research funding is closely related to the UK’s “divorce bill”. There is a total of €7.5 billion available for health research under the program.

The UK is considered a world leader in life sciences research, and one of the largest contributors to the EU budget. More Horizon 2020 projects are coordinated by UK-based scientists than any other country.

Horizon 2020 will end 20 months after Brexit, assuming that no extensions to the exit are agreed.

A failure to agree on the financial exit agreement, which the European Council and Commission insist must be done first, would mean that the UK would not fully finance Horizon 2020 until its conclusion. This is because member state contributions to the program are due to be made until the mid-2020s.

Subsequent disagreements about the ownership of valuable intellectual property derived from Horizon 2020 research could be foreseen, and may spell the end for the possibility of a partner arrangement for the UK in future.

FP9, the EU programme to follow Horizon at the end of 2020, will therefore see both EU and UK citizens lose out, given the knock to both the prestige of the current program and the total budget. This highlights the value of collective governmental funding of research, and the benefit of collaboration with peers.

The free movement of people within the EU has seen UK public health benefit by being able to attract high-level talent in academia, private research and filling crucial National Health Service (NHS) healthcare professional roles.

Statistics on net migration, however, suggest unease among those who are resident in the UK by EU citizenship, and roles in the NHS are going unfulfilled due to lack of qualified candidates.

The attraction and retention of skilled healthcare workers will be a critical factor to address in the UK government’s new system for immigration, whether it is “Australian points-based” or otherwise, when the country takes back control.

Tusk's warning

In the immediate aftermath of the UK referendum, EU council president Donald Tusk, asserted that Brexit would be bad for everybody: the UK, the EU, and for the wider world. He meant this both economically and politically.

As the clock continues to tick down to March 2019, the Brexit deadline, the issues to be resolved in health are many and complex, and likely to be overlooked in favour of more political or “big ticket” issues, such as financial services.

The sour tone of initial discussions suggests stormy seas ahead in the negotiations, but it must be remembered that health is a high-stakes game.

Special agreements with respect of health would be more politically justifiable where public health is at risk. This option should be explored to ensure that public health is not set back on both sides of the negotiating table.

Steve Bridges is an independent health policy adviser in Brussels. His Health Matters column takes a closer look at health-related policies, issues and trends in the EU.

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