Real concerns for life sciences post-Brexit
The uncertainty surrounding Brexit is creating significant issues for many business areas but the implications for the life sciences sector are potentially far-reaching and fundamental. Ireland is the seventh-largest exporter of medicine and pharmaceutical products in the world and the sector employs more than 50,000 people directly.
The principal concern is the regulatory environment post-Brexit. The sector is already facing increasingly onerous compliance requirements (for example, new EU regulations for medical devices) but these are known challenges. But the uncertainty around Brexit is driving the current unease for businesses in this sector.
First, there are likely to be implications for Irish pharmaceutical firms' ability to market medicines in the UK post-Brexit. The UK is currently subject to the regulatory framework of the European Medicines Agency (EMA). If this ceases post-Brexit, then Irish-based pharmaceutical firms will have to apply to the UK's Medicines and Healthcare Products Regulatory Agency for a separate UK marketing authorisation. Firms will be burdened with a dual process requiring applications for both EU and UK authorisation. This will mean increased costs for firms and potential delays in getting new medicines to market in the UK.
There is a real immediacy to this issue for at present the EMA is proceeding on the assumption the UK will no longer be subject to its jurisdiction post-Brexit.
Even if the UK wishes to remain with the EMA, will it be bound by decisions of the Court of Justice of the European Union (CJEU)? The court interprets the law which governs the EMA and the regulations it applies. The UK government White Paper stated Brexit would "bring an end to the jurisdiction of the European court of justice in Britain". In January, UK Health Secretary Jeremy Hunt said he did not expect the UK to remain subject to the EMA framework and this was a "matter of sovereignty" as the UK could not agree to anything that would make it subject to its jurisdiction. While he referred to "regulatory equivalence" and "mutual recognition" between the two regimes, it is likely to be a challenge to achieve this unless relevant decisions of the CJEU are to have a meaningful significance in the UK.
The UK government policy paper, published last month, 'Enforcement and Dispute Resolution - A Future Partnership Paper', has created further uncertainty. The paper offers a more nuanced position on the status of the CJEU, saying the direct jurisdiction of the CJEU in the UK must end with Brexit and pointing to international agreements (in particular the European Economic Area Agreement) to show agreements between the EU and third parties need not be interpreted and enforced by the CJEU - at least not directly. It remains to be seen whether the type of arrangement seemingly envisioned by the UK is achievable.
The future of the free movement of persons is another issue of huge importance to a number of Irish business sectors, and life sciences is no different. It is common for researchers from Irish pharmaceutical firms to travel back and forth to the UK. From the UK perspective, in 2016, it was reckoned more than 6,000 life science researchers from other European countries contributed substantially to the UK's ability to innovate and grow its economy, in areas as diverse as drug discovery and health services research. The free movement of persons under EU law and under the EEA Agreement does not appear to be politically acceptable at present in the UK. Thus, Irish, UK and EU research and development is threatened - at the very least by uncertainty, but more likely and more worryingly by the ultimate outcome - with adverse implications for Irish pharmaceutical firms and EU patients.
The loss of a pan-European and consistent system of regulation is likely to significantly affect the ability for the Irish life sciences industry to develop and progress and the ongoing uncertainty is causing real worry.
John Cronin is partner and head of Brexit group at McCann FitzGerald. Shane O'Brien is senior associate at McCann FitzGerald