John Whelan: UK vote a bitter pill for Irish pharma

John Whelan: UK vote a bitter pill for Irish pharma

With three weeks to go, the December 12 UK general election is being billed as the most important in a generation.

Yesterday, Boris Johnson finally launched the Conservative Party manifesto, the last of the political parties to do so, but beyond “Let’s get Brexit done”, it was very thin on economic policies, relying on promises not to increase income tax, corporation tax or VAT for five years.

The Labour Party has taken a much more radical approach in its manifesto, with promises to raise corporation tax from 20% up to 26% and push up income tax on those earning more than £80,000.

However, both parties made references to radical changes to how Britain’s the UK health service — the NHS — procures its pharmaceuticals, with damaging consequences for Ireland’s largest manufacturing sector.

At the party’s annual conference some weeks ago, Labour leader Jeremy Corbyn pledged to create a new, publicly-owned generic drug manufacturer to provide cheaper medicines to the NHS. The manifesto reiterated the Labour Party’s pledge to establish a state-owned generic drugs company and to use the Patents Act provisions and compulsory licence acquisition to secure access to generic versions.

Compulsory acquisition of the licenses for patented medicines by a Labour government, or any government party, would create havoc not alone within the industry in the UK, but also for countries such as Ireland, where global manufacturers have registered their licences for use across Europe.

There was more bad news for the pharmaceutical industry in further recommendations in the Labour papers, describing “fundamental problems” with the current model for the development of new medicines. The paper referenced a lack of alignment between pharmaceutical companies’research & development (R&D) activities and public health needs.

Many in the industry are already grappling with the anticipated fragmentation of research funds after Brexit, when access to EU funding and research people and facilities will be curbed. Finding the funds to go it alone in developing new drugs exclusively for the NHS could devastate the industry and open the floodgates to low-cost generic drugs.

The Conservative Party, on the other hand, has set out the legislative reforms it intends to implement in the proposed Medicines and Medical Devices Bill which it states “will capitalise on opportunities to ensure that our NHS and patients can have faster access to innovative medicines, while supporting the growth of our domestic sector”.

The new Conservative manifesto, very much in the style of Boris Johnson, gave little detail on what exactly will be provided for in the Bill, but the party states the “main elements” of the legislation will include “powers to make it possible for a wider range of healthcare professionals to prescribe low-risk medicines”, and enable UK medicines regulators to “develop innovative regulation to enable early access to cutting-edge technologies and break new ground in complex clinical trials”.

Again, the implication beingis that the UK will open the gates to low-cost generic drug makers and that the UK medicines regulatory body (MHRA) will diverge from the European Medicines Agency.

This latter possibility flies in the face of prior announcements by the Theresa May government that EU Community Marketing Authorisations will be converted to UK Marketing Authorisations following the UK’s departure from the EU, effectively offering full regulatory alignment to the British and European industries.

Policy pledges from both Labour and Conservatives give early insight into what the industry could face under a new UK government, regardless of Brexit issues. Labour leader Jeremy Corbyn’s plans to create a publicly-owned generic drug manufacturer and apply compulsory licensing to secure generic versions of patented medicines are two huge challenges for Ireland’s pharmaceutical industry.

Both the export of patented medicines and the income associated with the use of manufacturing licences are multi-billion earners for Ireland’s pharmaceutical industry. The early Conservative Party re-election promises seem equally unpalatable to the industry here.

The pharmaceutical industry is integrated internationally, and has the largest R&D spend of any industry globally. As well as driving medical progress by researching, developing, and bringing new medicines that improve health and quality of life for patients around the world, the research-based pharmaceutical industry works on the basis of patent protection to ensure ongoing development.

Governments and industry — whether it be in the US, Asia, or Europe — will not take kindly to any post-Brexit free-trade proposals to compulsorily purchase licences or inducements to break away from patent-developed drugs and produce or import copy generic drugs.

John Whelan is managing partner of international trade consultancy The Linkage-Partnership

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