One of the most radical and potentially life-changing announcements in yesterday’s Budget has attracted the least attention.
Instead of going through costly and time-consuming approval processes, Britain will now adopt the best drug and medical device regulatory practices from around the world. Think tanks like the Adam Smith Institute and the Government’s Chief Scientific advisor Sir Patrick Vallance have long been calling for this. Yesterday the Chancellor announced that the Medicines and Healthcare products Regulatory Agency (MHRA) will now explore: ‘partnerships with trusted international agencies […] to provide simple, rapid approvals for medicines and technologies that have received their approval from 2024.’
This could include the Food and Drug Administration (FDA) of the USA, and Japan’s Pharmaceutical and Medical Devices Agency. If Japan or the US approve a drug, it will be automatically approved for prescription here in the UK.
Drug reform of this kind means that countries can streamline the process of getting new medications approved, saving time and resources, and lowering the transaction costs of bringing new potential life-saving drugs to market. Money once earmarked for burdensome regulatory processes can be unlocked for direct life sciences research and development (one would hope). It could also incentivise further innovation, by encouraging collaboration between the pharmaceutical companies of each country within the reciprocity web.
It’s such an easy win that one can only wonder: why has it taken the UK so long post-Brexit to implement? This piece of low-hanging fruit has been hitting us in the face everytime we walk into the Garden of Potential Policies for years until yesterday we finally decided to pick it off its branch! Why didn’t we do this pre-Brexit? Because we couldn’t.
Before Brexit, the UK’s membership to the European Union meant that we were a part of a centralised system for the approval and regulation of medical drugs through the European Medicines Agency (EMA). We were required to follow the EU’s regulatory framework and could not unilaterally reciprocate drugs with countries outside the EU without adhering to the EMA’s standards and processes.
Even outside of its own state-lined walls, the EU has its own set of agreements with third countries (like the US and Japan) for the mutual recognition of drug approvals and regulatory standards. These agreements are negotiated at the EU level, and individual member states, including the UK before Brexit, still did not have the authority to establish separate agreements with non-EU countries. This centralisation of regulatory processes within the EU was designed to maintain consistency and quality control for drug approvals across all member states, but could nevertheless prove sclerotic.
By recognizing each other’s regulatory processes and sharing information, the UK can follow the lead of trusted international partners and expedite the availability of new treatments, promote innovation, and ultimately improve patient outcomes. As the world continues to face new healthcare challenges, the importance of international collaboration and reciprocity in the pharmaceutical industry cannot be understated.
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Connor Axiotes is Director of Communications at the Adam Smith Institute.
Columns are the author’s own opinion and do not necessarily reflect the views of CapX.