One of the few certainties about Brexit would appear to be just how much uncertainty it is causing. However while many businesses are adopting a ‘wait-and-see’ stance, Japanese pharmaceutical companies are taking a much more proactive approach, demanding evidence that the UK will remain the best place for science and innovation in Europe.
Following the surprise vote, the Japanese government was very blunt in its response. In a memo posted on the ministry of foreign affairs website, it said that “in light of the fact that a number of Japanese businesses, invited by the government in some cases, have invested actively to the UK, which was seen to be a gateway to Europe… we strongly request that the UK… respond in a responsible manner to minimise any harmful effects on these businesses”.
The level of investment on the pharmaceutical side is considerable. The Japanese Pharmaceutical Group (JPG), an association of nine drugmakers – Astellas, Chugai, Daiichi-Sankyo, Eisai, Kowa, Mitsubishi Tanabe, Otsuka, Shionogi and Takeda – notes that all its members conduct R&D in the UK and over £60m was invested by them directly in the country last year.
For example, in October, Takeda announced a cancer collaboration with Crescendo Biologics, which could be worth nearly $800m to the Cambridge-based biotech. It also recently launched neuroscience company Cerevance in Cambridge, Massachusetts in partnership with Lightstone Ventures, with the 25-person research team coming from Takeda’s Cambridge UK site.
Harmonised regulatory systems vital
Adam Zaeske, Takeda’s managing director, UK & Ireland, told PME that the decision to leave the European Union “may create challenges for the life sciences industry, such as reduced access to EU research funding, the need to establish a separate regulatory system and barriers to attracting and retaining talented workers”. Given that the UK represents only 3% of the global pharmaceutical market, he added that “it will be important to ensure that it retains a strong relationship with the EU (which represents over 20% of the global market) and seeks to maintain harmonised and mutually recognised regulatory systems”.
The regulatory concerns are considerable. In its memo, the Japanese government expressed its worries about the relocation of EU agencies currently located in the UK and made specific reference to the London-based European Medicines Agency (EMA).
The Japanese government stated that if the EMA were to transfer to another EU member state, “the appeal of London as an environment for the development of pharmaceuticals would be lost, which could possibly lead to a shift in the flow of R&D funds and personnel to continental Europe. This could force Japanese companies to reconsider their business activities”.
Pretty strong stuff and a big worry given that it seems inevitable that the EMA will indeed be relocated, with almost every member state throwing its hat into the ring to become the agency’s new home.
Concerns over EMA location
Mr Zaeske said that in the event that this does happen, both the UK’s Medicines and Healthcare products Regulatory Agency (MHRA) and the EMA “may lose vital expertise and the benefits that years of close collaboration have brought to the pan-European medicine licensing process”. For example, the MHRA approves around 20% of medicines on behalf of the EMA, providing much-needed capacity.
He added: “There is also the possibility that the MHRA will potentially have to undertake the other 80% of approvals that the EMA currently processes, which will require additional capacity and resource. In addition, there is a risk that the regulatory processes of the UK and EU become separate and distinct, affecting clinical trials, licensing and intellectual property protections.”
Mr Zaeske also noted that “from a practical perspective, Takeda may need to develop additional expertise to navigate two different regulatory systems as well as allocating resource to engage with multiple regulatory bodies, which may have differing requirements and standards”.
Yasuo Sakae, vice president of corporate strategy and planning at Astellas Pharma Europe, told PME that the company’s regulatory team for the Europe, Middle East and Africa (EMEA) region is actually located in the Netherlands. “It is therefore no major issue if the location of the EMA office moves to another member state as long as the travel connections remain convenient.”
However, he acknowledged that “we are concerned that the EMA regulatory system will struggle, at least temporarily, if the MHRA is no longer able to carry out EMA medicines reviews”. Mr Sakae said the company would prefer it if the UK could continue to be part of the EMA regulatory regime but “any decision to set up a completely independent regulatory system in the UK means that Astellas may not be able to include the UK in the first wave of regulatory filings resulting in delays to patients accessing important new medicines”.
While the future location of the EMA is an issue, there are a whole host of other concerns that Japan’s pharmaceutical players want clarity on from Prime Minister Theresa May.
Mr Zaeske says Mrs May has been clear that science and innovation are priorities both in the Brexit negotiations and as her government develops a new life sciences industrial strategy. As well as seeking to maintain an aligned regulatory process with Europe, he told PME that “it should ensure access to EU research funding is retained and that the sector can attract the brightest and most talented workers”.
Attracting external talent is priority
Mr Sakae echoes this last point, saying that “as a global business, we are keen to see a future migration system that allows us to move around our most talented people whether through relocations or secondments as well as attracting external talent to work for us in the UK”. Because the UK is English-speaking and has a large pharmaceutical sector it has always been an attractive location, he notes, adding that “access to talent from across the EU and globally, as well as the presence of world-class universities conducting research in the life sciences were main reasons why Astellas chose to establish its EMEA HQ in the UK. We would therefore like to see minimal restrictions in this area”.
As for life beyond Brexit, Mr Zaeske stressed that there are other opportunities for both industry and government to improve the attractiveness of the life science commercial environment. “We would like to see the government adopt a holistic approach to life sciences which delivers improvements across the whole medicines development and delivery pathway,” he says, claiming that “the UK would benefit from a review of NICE processes, so that patients are able to continue accessing new, life-changing medicines”.
Access is biggest bugbear
It is a point taken up by Mr Sakae who says Astellas plans for investment “are more dependent on the reimbursement environment for our in-market products than the UK’s membership of the EU”. He added that in addition to Brexit, “the ongoing discussions in the UK about the affordability of branded medicines create uncertainty that make it difficult for Astellas to identify expansion opportunities in the UK at this time”.
So while Brexit is creating uncertainty on the regulatory front and concerns swirl around its effects on the UK’s science base, fears about access and uptake are foremost in the minds of drugmakers. The JPG has no problem in voicing these either.
It says that uptake in the UK is “unacceptable” and additional investments by its members are unlikely (outside the early discovery stage) until the situation changes. As for NICE, the JPG says that reform is essential – “it must keep pace with changes and be seen to support innovation and life sciences”.
Calling for quality-adjusted life year (QALY) thresholds to be “set to realistic levels”, the JPG believes there is a need for a “mindset change” at NICE that leads to “more rapid adoption of proven innovation”. This requires a shift from seeing the latter as a cost “to an investment for the future” and it also wants to see “more money for medicines within the total NHS budget”.
These may be uncertain times but Japanese drugmakers are certainly not sitting on the fence in demanding that the UK continues to be an attractive place for innovative pharma… or else.