Amid the bustling skyscrapers of London’s Canary Wharf, one building stands silent and shuttered — a concrete symbol of the cost of Brexit.
A lone security guard still sits behind the reception desk beneath the logo of the European Medicines Agency, but the revolving doors through which scientists from around the world once streamed to discuss transformative new medicines are firmly locked.
The EMA decamped to new premises in Amsterdam at the beginning of March, a shift that became inevitable from the moment the EU referendum result was announced in the small hours of June 24 2016.
For the pharma industry, substantial uncertainties remain about supply chains and regulation in the event of a no-deal Brexit. But there is no uncertainty about the loss of the EMA: even if Brexit were to be abandoned, the agency’s move is irreversible, noted David Jefferys, senior vice-president for Eisai, a Japanese pharmaceuticals company with a big presence in the UK.
London was chosen as the first home of the agency, which was established in 1995 to harmonise drugs regulation across all 28 member states, in part because of the significance of the UK pharma industry, which currently secures about 3.5 per cent of global life sciences investment, the highest share in Europe if exchange rate effects are excluded.
Lamenting the loss of the agency’s gravitational pull to the UK capital, Mr Jefferys, who chairs regulatory affairs committees for the Association of the British Pharmaceutical Industry and its European counterpart EFPIA, said: “The loss of the EMA is . . . significant for the UK, both in terms of prestige and in terms of jobs and impact to the London economy. But beyond that, it needs to be carefully managed [to ensure] that this isn’t the start of a wider damage to the UK science space.”
London’s loss has been Amsterdam’s potential gain. Udo Kock, the city’s deputy mayor, is revelling in his city’s new status as the home of the EMA. “Obviously in Amsterdam we’re trying to leverage this new situation as much as we can,” he said.
Brexit and the end to frictionless trade with the EU have left the Amsterdam region facing the permanent loss of €1bn in economic activity, according to Mr Kock. “This is bad for the Amsterdam economy, bad for the Dutch economy, bad for the UK economy, bad for London, it’s bad for everybody . . . But given that it’s a fact we try to make the best out of it.”
The deputy mayor is leading a push to market Amsterdam as an international centre for health and life sciences, partly due to the arrival of the agency. Guido Rasi, who heads the EMA, has estimated that between 1,000 and 2,000 companies had been based in the vicinity of its London headquarters out of a desire to be connected to the agency. “We are identifying these companies and . . . which one of them would be most likely to move to Amsterdam and we’re approaching them.” said Mr Kock.
He is “right now in discussions with roughly 30 companies in the life science and health industry that are considering [moving] to Amsterdam because of Brexit and EMA”. Not all were currently based in London, he added. “It’s also companies from elsewhere that have extension plans in Europe and for which London is no longer an option and that are now actively looking at Amsterdam.”
Mr Kock said the active discussions were “just the beginning . . . because so far a lot of companies have been sitting on the fence because of this uncertainty regarding Brexit . . . but once Brexit is a fact I think more and more companies will move, or at least seriously consider [moving]”.
Two of the largest global pharma companies, Sanofi and Novartis, have both recently opened offices in Amsterdam, shifting staff from other parts of the Netherlands. Both companies have said that proximity to the EMA is an advantage.
However, fears of a mass exodus of companies from London to Amsterdam may be overdone, according to Hilary Thomas, chief medical adviser at KPMG, the professional services firm. Even without the EMA’s presence catalysing scientific and technological activity in the UK, she believes Britain’s academic institutions “will continue to punch above their weight”.
It is “hard to imagine that companies which are currently headquartered in the UK would go through the cost and disruption of moving to a country with a smaller population,” she said.
But she acknowledged that as the European focus of regulation changed, “so might the UK’s influence” and cautioned that the wider implications of Brexit “may undermine our position — uncertainty, the ability to recruit from Europe [and] access international grants”, for example.
Mark Dayan, policy analyst for the Nuffield Trust think-tank, and an authority on the impact of Brexit on health and life sciences, said that the physical departure of the EMA was “hardly going to help make the UK an attractive destination for pharmaceutical investment”, but it was the legal departure of the UK from the pan-European regulatory system that would cause the real problems.
The market easily available to the NHS and British pharmaceutical companies would “shrink to a sixth or less of what it is today”, he added, because approvals granted in the UK would no longer be recognised by the remaining member states.
Mr Dayan pointed out that this would disincentivise investment in the UK, “because the process of bringing medicines to the European market will require an extra layer of regulatory burden across approvals, notifications and monitoring, and potentially manufacturing”.
He conceded that the UK could use more streamlined regulation and approvals to tempt some investment back and reduce delays in new medicines being introduced, and said that clubbing together with other medium-sized countries to try to create a new large market “was an interesting idea worth considering in the long term”. But he warned of “a risk that this ends up with a race to the bottom in tax and regulation”, or that the NHS could be under pressure to pay for inefficient drugs in return for pharma company funding and investment.
Mr Kock, meanwhile, forecast “a permanent shift of interest from London to Amsterdam . . . For life science and health companies the EMA is a key decision factor,” he said.
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