Mark Samuels, Chief Executive, British Generic Manufacturers Association (BGMA), sets out the regulatory challenges facing generic medicine manufacturers post-Brexit, arguing that improvements to the policy environment are needed.
The UK’s medicines supply situation has become like swimming the English Channel: it only works one way. You can swim from England to France, but you can’t swim from France to England. The French authorities outlawed it in 1993.
Brexit’s Trade and Cooperation Agreement is now a one-way swim for manufacturers. Generic medicine regulations work one way: we accept EU regulations, but they don’t accept ours, sinking the UK’s manufacturing competitiveness and international influence on pharmaceutical regulation. The upshot is that generic medicine manufacturers have invested around £4bn (Medicines for Europe) in EU manufacturing since Brexit, compared to almost no investment in the UK.
Generic medicines represent four out of five drugs prescribed by the NHS. For the uninitiated, generics are precise equivalents of existing original medicines which are allowed to be supplied to the NHS when a period of patent protection expires. The sudden injection of competition means prices paid by the NHS sharply tumble – often by as much as 90% – and this provides annual savings in the region of £15bn (BGMA). This also increases the number of patients who can access treatments because they are more affordable.
Every day, more than 2.2 (BGMA) million generic products make their way to patients. Around a quarter of generic medicines used in the UK are manufactured here. Yet the post-Brexit policy environment for generic medicines does not reflect their importance.
There is strong evidence we are fast becoming a rule-taker from the EU when it comes to medicines regulation. It’s a far cry from a few years ago: London was the driving force, writing the medicine regulations for the rest of the continent. Now the European Medicines Agency has moved from London to Amsterdam and the picture is very different.
Two top examples of where the UK needs to get on the right tack are batch testing of medicines and marketing approvals. Batch testing is the critical process of confirming every medicine has the correct quality standards through laboratory tests by the manufacturer. Post Brexit, the government has agreed to maintain a list of approved countries for which no import testing is required when bringing medicines into the country. A similar agreement used to exist as part of our EU membership.
However, the key difference now is that these agreements are not reciprocated, and UK test results are not recognised going the other way. Predictably, most batch testing labs shut down in the UK and moved to the EU.
The same situation applies to marketing approvals of medicines where UK regulators accept EU decisions, but the European Medicines Agency does not accept approvals from the UK Medicines and Healthcare Productive Regulatory Agency (MHRA).
There is a more in the weeds, but no less pertinent example shortly due to emerge connected to something called International Recognition. In this new process, from January 2024, the MHRA will offer a faster route for medicines already approved in the EU, plus several other countries, including the US, Canada, and Australia.
These measures significantly impact the flow of medicines between the UK and the continent and, in turn, where they are produced.
Mutual Recognition Agreements (MRA) have regularly been touted as evidence of newfound freedoms available to the UK outside the EU. In essence, MRAs are trade agreements that aim to facilitate market access and encourage greater international harmonisation of compliance standards while protecting consumer safety. In the case of drugs, particularly generic medicines, they would avoid replication, which ultimately adds cost to the NHS.
However, from a medicines perspective, the UK has so far failed to negotiate one with any major economic power. MRAs could help alleviate the regulatory issues mentioned above.
The results of these issues are far-reaching and are already plain to see. A failure to rebalance these one-way agreements means the UK will face an increasingly less resilient supply chain, and the shortages we have already seen for products such as hormone replacement therapy and antibiotics will become more common. It could also reduce the competitiveness of the UK market, and this means the prices the NHS pays for medicines will increase.
In the long term, we can already see that manufacturers are making clear investment decisions influenced by the policy environment. Investment in new facilities to serve the UK and wider markets is overwhelmingly going abroad. Over the past six years, work has started on almost 40 new or expanded generic pharmaceutical plants across the European continent, representing up to £4 billion in investment. Unfortunately, it includes virtually no expansion in UK manufacturing capacity. Across life sciences manufacturing, government figures show UK production volume has keeled over, falling by 29% between 2009 and 2021 and shedding 7,000 well-paid jobs (BGMA).
A lack of investment coupled with a regulatory regime which follows others means the UK is increasingly cast as a lower-priority market, and allocations of medicines from global providers cannot be guaranteed.
Moreover, the UK can’t be a life sciences superpower without medicine manufacturing – it’s essential for converting R&D potential into GDP. And generic manufacturing is one of the UK’s secret superpowers: annually, around two hundred million packs of generic medicines are made in Britain. The government must not let this strength fade through a lack of supportive policy.
We look certain to have a general election next year. Labour leader Keir Starmer has already stated he would seek a closer trading relationship with Brussels and re-negotiate some of the existing Brexit deal. Prime Minister Rishi Sunak showed with the Windsor Framework that he can negotiate effectively with the EU.
Whoever is in power needs to recognise the importance of an improved policy environment for off-patent medicines, which form the vast majority of prescriptions used in the NHS. A good place to start would be progress on mutual recognition agreements.
Generics are high volume and low cost. They operate on razor-thin margins, so any unnecessary red tape, duplication and delay means the viability of products can come into question. If that is the case, then the bedrock of competition is reduced, meaning crucial savings for the NHS are diminished while fewer patients will have access to treatments.
By Mark Samuels, Chief Executive, British Generic Manufacturers Association.