You have asked some great and very well-informed questions. On the first front, you are quite right to say that there is a distinction in medicines between final produced medicines and intermediates such as active pharmaceutical ingredients. Although there would be no tariffs under WTO rules for final medicines, there would be tariffs for active pharmaceutical ingredients. Where there is a manufacturing industry—there are at least two major plants in Scotland—there would be a direct cost impact on those businesses that import active pharmaceutical ingredients from abroad and export final products or further intermediate products.
On non-tariff barriers, the situation gets more complicated. There are many non-tariff barriers. Those that relate to supply would include things such as the duplication of testing, the duplication of inspections and so on. That sort of thing adds time, complexity and delay in supply.
Beyond that, there are many other aspects of trade agreements that are very important for an industry like ours. Some of them relate to people—for example, the extent to which we can move highly qualified people around the world and the extent to which we can participate in collaborative research programmes, which are usually of a global nature. I would characterise those sorts of things as non-tariff barriers that ultimately affect the long-term competitiveness situation. That sort of scenario of the Australia model is definitely not a scenario that is attractive to us. We are very clearly asking for global co-operation, global high standards with respect to a regulatory regime and, fundamentally, collaboration.
Your second question was about the supply of medicines. You are quite right to point to the particular difficulty of short-life medicines, which is an example of an area where stockpiling cannot be the only answer. It is simply not possible to stockpile a medicine for six weeks if the shelf life is a matter of hours or days. That is the case for only a small number of medicines, but those medicines are of a very critical nature. That is why we need to have a multilayered approach to managing risk in supply. That means diversifying away from the short straits as much as possible and taking advantage of the Government-secured freight, on which a question was put to the previous panel. There is a Government-secured freight facility specifically for medicines, which companies will be able to book in the coming weeks, that will allow for a route in under those circumstances.
11:00
Fundamentally, our answer is to have a multilayered approach. It is the best answer that we have come up with. To the best of our ability, we are working at all those layers to make sure that we are as prepared as possible. However, of course, not everything is within our control.
That is linked to your third question, which was about the implications of moving away from the EMA. The EMA works as a network. There are national regulators in every member state and a centralised procedure for licensing. A lot of the regulatory work in the European model has been done by national regulators. In fact, the UK’s regulator, the MHRA, did a large chunk of work—it is one of the most highly respected regulators in Europe—as part of that European system.
The first implication is for Europe, of course, because if the EMA is not drawing on the expertise of the MHRA, that is, from our perspective, unfortunate. On the other hand, given the political reality of where we are, we have an opportunity to think carefully about what the future of the MHRA needs to look like. Interesting conversations are going on right now with the MHRA and with the Office for Life Sciences at Westminster to talk through how to get the balance right between ensuring that the MHRA is working to international standards but that it is also trying to be as smart as possible and identifying those areas where it can be at the cutting edge. At the end of the day, a regulator being at the cutting edge helps the industry to be at the cutting edge, too. If we want to have a world-class industry in Scotland and the rest of the UK, having a world-class regulator is very helpful to us.
We do not have the full picture yet, but I am optimistic that we will find a mixed model that will allow some level of alignment or adoption of EU approaches, but which will also allow some flexibility for the MHRA to compete in areas where that might be in the UK’s interest. I hope that that good compromise will be something that we can all live with.