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Sweden, Denmark and Italy offer to host EMA headquarters in the event relocation is necessary
The UK vote by a 51.9% to 48.1% majority in favour of leaving the European Union (EU) casts a grave shadow on the future of the European Medicines Agency (EMA) headquarters in London. The leave vote bestows a mandate on the UK government to trigger Article 50 of the Lisbon treaty, which in turn will pave the way for a two year negotiation to withdraw from the European bloc. It is however possible that the UK could also defer an EU exit strategy to coincide with planned parliamentary elections due in 2020. Nevertheless, along either timeline, major economic and political uncertainty across both UK and EU markets is likely to hamper the EMAs relocation and complicate the decision.
Italy, Denmark and Sweden have emerged as early frontrunners vying to be the new home of the EMA. Each of these locations has respective merits. In particular, Italy has emerged as a strong challenger given that EMA executive director, Guido Rasi, as well as a high proportion of the agency's fulltime staff (12.43%), are Italian nationals. Indeed, Italy ranks second after France (12.77%) and ahead of Spain (10.51%) with the highest proportion of fulltime EMA staff.
Alternatively, support could swing to Sweden. Migrating the EMA headquarters to Sweden would have a number of advantages, not least of which is that the Nordic country would largely be seen as a politically neutral choice. Another reason why Sweden may be preferred over the Mediterranean country as a possible location is the risk that political pressure in Italy is building to follow the UKs and hold its own in-out referendum. There may also be lingering uncertainty about Italy's eligibility as a destination for the EMA, given concerns over its political stability. Finally, Italy's bid could be undermined owing to ongoing issues surrounding the future of the Italian banking system.
Despite its small size Sweden is potentially well placed to become the home for the EMA. On a political level, it has relatively strong pro-EU credentials compared to neighbouring Denmark and, unlike Italy, Sweden is not vulnerable to a possible referendum on its relationship with the EU. Given that the question of the EUs political and economic volatility is likely to be at stake in the years ahead, Sweden may be regarded as a safe harbour for the pan-European medicines regulator.
As early as February of this year, several months ahead of the UK referendum vote, Sweden's pharmaceutical trade association (LIF) launched a well-publicised campaign to promote Stockholm as the preferred location for the EMA headquarters. Furthermore, it appears that the Swedish government has been actively preparing contingency plans for this eventuality.
Relocating the EMA to another EU country would result in the loss of about 600 full time jobs from the current EMA London headquarters. In addition, there is a risk that companies with pharmacovigilance/regulatory operations based in the UK may opt to switch some of these operations to an EU member state, probably in the same city or region, as the EMA headquarters. It is therefore likely that the next base for the EMA headquarters will receive a boost in terms of its attractiveness as a location for clinical trials. In that context the prospect of hosting the EMA should act as a magnet for pharmaceutical investment and boost the domestic manufacturing sector.
Companies wanting to be located close to the EU pharmaceutical regulator will also prioritise practical considerations such as choosing a city with strong inter-European transport connections (such as Milan) and relatively affordable cost of living standards (such as Stockholm). Alternatively, the Danish capital Copenhagen offers a mix of pull-factors and has the added incentive that the country is already home to large export-orientated pharmaceutical players (such as Novo Nordisk).
The decision on where to base the EMA will be largely a political decision between EU powerbrokers. The manoeuvring to be the seat of the EMA headquarters will be as much about EU politics as it is about national level regulatory expertise at a national level or infrastructure.
The move to discontinue operations in London and re-establish a base in an EU state is liable to be a costly undertaking. The re-location will also pose a significant administrative burden on the EMA. However, if handled properly, the disruption can be minimised to some extent, at least in terms of any negative impact on the regulatory process for approving new medicines throughout the EU. Furthermore, the relocation of the EMA is not on the cards until beyond the next two year outlook. The move should be part of a gradual transfer, and will probably be accomplished in stages.
Eóin Ryan is a senior life sciences analyst at the IHS
Posted 11 July 2016
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