Britain's departure from the EU could mess with the way drugs are approved

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A person holds pharmaceutical tablets and capsules in this picture illustration taken in Ljubljana September 18, 2013.  REUTERS/Srdjan Zivulovic

Thomson Reuters

A person holds pharmaceutical tablets and capsules in illustration picture in Ljubljana

Europe's version of the FDA is up for grabs.

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The biggest impact of Britain's vote to leave the European Union is how regulation of drug companies will shake out. The European Medicines Agency (EMA), which approves treatments for all EU countries the same way the FDA does in the US, is based in London and is expected to relocate now that Britain is out.

The association of Germany's pharmaceuticals industry said on Friday that the EMA would need to move to a city within the EU, bringing administrative headaches for companies.

Drug companies and healthcare officials in Sweden, Denmark, Italy and Germany have all expressed interest in hosting the EMA instead of London.

Industry executives fear upheaval at the EMA could snarl the EU's drug approval process. Britain may have to develop its own domestic regulatory system, leading to further confusion, possibly delaying new approvals.

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Although Britain could continue to take part in the EMA system if it remains in the European Economic Area, like Norway, many of those supporting its exit from the EU oppose that option.

As a result, British patients could move to the back of the queue for new medicines as companies prioritize the larger EU market, and some medicines could be left in regulatory limbo.

The EMA, with a full-time staff of more than 600, is the largest EU body in Britain and has overseen pan-European drug approvals since 1995 from its headquarters tucked away among global banks in London's Canary Wharf.

An EMA spokeswoman said it was premature to comment on its future. "It is too early to foresee the implications of this decision and at this stage we are waiting for further guidance from the European Commission," she said.

What the Brexit means for pharma companies

The pharmaceuticals industry employs more than 70,000 people in the UK and accounts for 25 percent of all business research and development spending in the country.

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Britain's biggest drugmaker, GlaxoSmithKline, said the exit vote "creates uncertainty and potentially complexity for us in the future", though the impact on its global business would be small, while the UK pharma trade association warned of challenges to future investment, research and jobs. GSK was up 2.6% on the London Stock Exchange on Friday.

Many scientists are concerned that funding for academic research, which has been well supported by the EU in recent decades, will now be jeopardized, along with important UK-European research collaborations.

"Now that the direction has been set to leave the EU, it is crucial that the government develops clear plans to safeguard the future of science and research in the UK," said Robert Lechler, president of the Academy of Medical Sciences.

(Reuters reporting by Ben Hirschler, additional reporting by Ludwig Burger in Frankfurt)

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